McCormick Posts Solid Q3, Reaffirms 2026 Outlook
MKC is trading near its 52-week low of $44.82 (6.0% above the low) on elevated volume (1.8× avg).
Summary
McCormick reported solid third quarter performance and reaffirmed its 2026 outlook. Q3 adjusted EPS was $0.86, adjusted operating income $359 million, and net sales rose 17.4% to $2,024.8 million, with organic sales growth of 1.9% and a 0.9% favorable currency impact. Gross margin expanded 190 basis points to 39.3%, and the company beat quarterly sales estimates, with consumer segment sales jumping on Mexico unit accretion. McCormick still sees fiscal 2026 sales up 13%-17% (12%-16% in constant currency) and backs its fiscal 2026 view of adjusted EPS of $3.05-$3.13. The company is on track with integration planning for the proposed Unilever Foods combination, which is pending at $15.7 billion, amid a UK competition investigation and an auditor change. The reaffirmation provides stability amid these uncertainties, and investors will look for details on the earnings call regarding the merger timeline and any impact from the regulatory review.
Updated with an SEC 8-K filing · What changed
Updates
· SEC 10-Q — The 10-Q reports Q3 net income of $97.6 million, special charges of $141.5 million, and a $866.8 million gain from remeasuring its McCormick de Mexico stake.
· SEC 8-K — McCormick's Q3 adjusted EPS increased 1.2%, with organic sales growth of 1.9% and a 190 basis point gross margin expansion.
- Q3 Results
- Q3 organic sales growth was 1.9%.
- Q3 net sales included a 0.9% favorable currency impact.
- Q3 gross profit margin expanded 190 basis points versus prior year.
- Q3 adjusted gross profit margin expanded 180 basis points versus prior year.
- Q3 operating income was $217 million.
- Q3 earnings per share was $0.36.
- Q3 special charges lowered diluted EPS by $0.50.
- Q3 adjusted EPS increased 1.2%.
- Q3 sales from McCormick de Mexico contributed 14% to the sales increase.
- Q3 Consumer segment net sales increased 25% to $1,215 million.
- Q3 Flavor Solutions segment net sales increased 8% to $809 million.
- Q3 Consumer segment adjusted operating income increased 24% to $241 million.
- Q3 Flavor Solutions segment adjusted operating income increased 18% to $117 million.
- Q3 2026 gross profit increased by $150 million from Q3 2025.
- Q3 2026 adjusted operating income increased 21% in constant currency.
- Q3 2026 Flavor Solutions segment adjusted operating income increased 16% in constant currency.
- Q3 2026 Consumer segment sales from McCormick de Mexico contributed 23%.
- Q3 2026 Flavor Solutions segment sales from McCormick de Mexico contributed 4%.
- Q3 2026 Consumer segment organic sales growth was 1% (2% price, 1% volume/mix decline).
- Q3 2026 Flavor Solutions segment organic sales growth was 3% (2% price, 1% volume/mix increase).
- Special charges included a $43.1 million non-cash impairment charge and $1.8 million exit costs.
- Impairment charge and exit costs related to ceasing a pepper sourcing project in Malaysia.
- Q3 2026 adjusted income tax rate was 22.6% (vs 16.1% in 2025).
- Q3 2026 net sales were $2,024.8 million; Q3 2025 were $1,724.9 million.
- Q3 2026 cost of goods sold was $1,229.9 million; Q3 2025 was $1,079.8 million.
- Q3 2026 selling, general and administrative expense was $436.4 million; Q3 2025 was $352.5 million.
- Q3 2026 special charges were $141.5 million; Q3 2025 were $3.9 million.
- Q3 2026 operating income decreased 24.8% to $217.0 million.
- Q3 2026 operating income margin was 10.7%, a 600 basis point decline.
- Q3 2026 interest expense was $68.4 million; Q3 2025 was $50.2 million.
- Q3 2026 income from consolidated operations before taxes was $154.5 million; Q3 2025 was $247.9 million.
- Q3 2026 income tax expense was $49.9 million; Q3 2025 was $39.3 million.
- Q3 2026 net income from consolidated operations was $104.6 million; Q3 2025 was $208.6 million.
- Q3 2026 income from unconsolidated operations was $3.0 million; Q3 2025 was $19.1 million.
- Q3 2026 net income was $107.6 million; Q3 2025 was $227.7 million.
- Q3 2026 net income attributable to noncontrolling interests was $10.0 million; Q3 2025 was $2.2 million.
- Q3 2026 net income attributable to McCormick was $97.6 million, a 56.7% decrease.
- Q3 2025 net income attributable to McCormick was $225.5 million.
- Q3 2026 diluted EPS decreased 57.1%.
- Q3 2026 basic EPS was $0.36; Q3 2025 basic EPS was $0.84.
- Q3 2026 average basic shares outstanding were 269.3 million; Q3 2025 were 268.6 million.
- Q3 2026 average diluted shares outstanding were 269.4 million; Q3 2025 were 269.3 million.
- Q3 2026 cash dividends paid per share were $0.48; Q3 2025 were $0.45.
- Q3 2026 gross profit increased 23.2%; adjusted gross profit increased 23.0%.
- Q3 2026 adjusted operating income was $358.5 million, a 22.1% increase.
- Q3 2026 adjusted operating income margin was 17.7%, a 70 basis point expansion.
- Q3 2025 gross profit was $645.1 million; adjusted gross profit was $646.1 million.
- Q3 2025 gross profit margin was 37.4%; adjusted gross profit margin was 37.5%.
- Q3 2025 adjusted operating income was $293.6 million; operating income margin was 16.7%.
- Q3 2025 adjusted operating income margin was 17.0%.
- Q3 2026 income tax rate was 32.3%; Q3 2025 income tax rate was 15.9%.
- Q3 2026 adjusted net income was $231.7 million; Q3 2025 was $229.1 million.
- Q3 2026 Consumer segment net sales had 0.6% favorable currency impact, 24.3% constant currency growth.
- Q3 2026 Consumer segment organic sales growth was 1.1% (-1.1% volume/mix, 2.2% price).
- Q3 2026 Consumer Americas net sales increased 31.7% (reported), 31.8% (constant currency), -0.3% (organic).
- Q3 2026 Consumer EMEA net sales increased 5.2% (reported), 5.0% (constant currency), 5.0% (organic).
- Q3 2026 Consumer APAC net sales increased 10.7% (reported), 4.4% (constant currency), 4.4% (organic).
- Q3 2026 Flavor Solutions net sales had 1.3% favorable currency impact, 6.4% constant currency growth.
- Q3 2026 Flavor Solutions organic sales growth was 3.0% (0.8% volume/mix, 2.2% price).
- Q3 2026 Flavor Solutions Americas net sales increased 8.4% (reported), 7.6% (constant currency), 2.7% (organic).
- Q3 2026 Flavor Solutions EMEA net sales increased 1.6% (reported), 1.2% (constant currency), 1.2% (organic).
- Q3 2026 Flavor Solutions APAC net sales increased 14.2% (reported), 8.3% (constant currency), 8.3% (organic).
- Q3 2026 Consumer segment adjusted operating income increased 24.4% (reported), 0.6% (currency).
- Q3 2026 Flavor Solutions adjusted operating income increased 17.6% (reported), 2.2% (currency).
- Q3 2026 total adjusted operating income increased 22.1% (reported), 1.2% (currency).
- Q3 2026 special charges for income tax rate calculation were $308.4 million; Q3 2025 were $252.8 million.
- Q3 2026 special charges included $12.4 million net income impact from transaction expenses in interest expense.
- Fiscal 2026 Outlook
- Fiscal 2026 net sales growth in constant currency is 12% to 16%.
- Fiscal 2026 contribution from McCormick de Mexico acquisition is 11% to 13%.
- Fiscal 2026 organic sales growth is 1% to 3%.
- Fiscal 2026 adjusted operating income growth is 16% to 20%.
- Fiscal 2026 adjusted operating income growth in constant currency is 15% to 19%.
- Fiscal 2026 adjusted EPS percentage change is 2% to 5%.
- Fiscal 2026 adjusted EPS percentage change in constant currency is 1% to 4%.
- Fiscal 2026 adjusted gross margin expected to expand 100 to 120 basis points.
- Fiscal 2026 expected tax rate is approximately 24.0% (vs 21.5% in 2025).
- Fiscal 2026 higher net interest expense is primarily due to McCormick de Mexico transaction.
- Fiscal 2026 financial results consolidate McCormick de Mexico from January 2026.
- Fiscal 2026 net sales outlook expects total volumes to be stable with increased pricing benefits.
- Fiscal 2026 adjusted operating income outlook includes IEEPA tariff refund benefit offset by inflationary costs and Middle East conflict costs.
- Fiscal 2026 adjusted operating income outlook includes increased SG&A for brand marketing, technology, growth initiatives, and incentive compensation build-back.
- Income from unconsolidated operations no longer reflects McCormick de Mexico ownership interest after January 2026 acquisition.
- Income attributable to noncontrolling interest reflects elimination of 25% minority interest in McCormick de Mexico Net Income attributable to Grupo Herdez.
- Fiscal 2026 outlook expects foreign currency rates to favorably impact net sales by 1%, adjusted operating income by 1%, and adjusted EPS by 1%.
- Unilever Foods Combination
- Unilever Foods transaction excludes India and other excluded businesses.
- Combined company expected $20 billion in fiscal 2025 revenue.
- Combined company expected 21% operating margin and strong cash flow.
- Expected mid- to high-single-digit adjusted EPS accretion within 12 months post-close.
- Expected mid-to high-teens adjusted EPS accretion in Year 3.
- Combined company expected $600 million annual run-rate cost synergies, net of reinvestments.
- Approximately two-thirds of the $600 million annual run-rate cost synergies expected to be achieved by Year 2 post-close.
- Company expects to identify approximately $100 million of incremental cost and revenue synergies that will be reinvested to further support growth.
- Cost synergies expected to be driven primarily by SG&A, procurement, and manufacturing and logistics efficiencies.
- McCormick has announced the planned future operating model and leadership team for the combined company.
- Companies have established global transition service agreements designed to support business continuity from Day 1 and facilitate a phased exit over approximately two years following close.
- Unilever Foods transaction expected to close by mid-2027, subject to customary closing conditions and regulatory approvals.
- Unilever Foods transaction was announced in March 2026.
- Combined company's $20 billion fiscal 2025 revenue includes McCormick's FY ended Nov 30, 2025, and Unilever Foods' FY ended Dec 31, 2025.
- Unilever Foods' financials for combined revenue are based on 2025 IFRS, adjusted for separated business, translated at 2025 average EUR/USD rate of 1.124.
- Unilever Foods transaction is expected to be accretive to net sales growth rate and operating margin.
- Integration planning for Unilever Foods includes a dedicated Integration Management Office and 20 cross-functional teams with over 200 employees.
- Detailed bottom-up Day 1 planning identified a clear pipeline of quantified initiatives for Unilever Foods integration.
- Unilever Foods transaction excludes Unilever's food business in Nepal and Portugal, its Lifestyle & Nutrition business, Buavita business, Lipton Ready-to-Drink business, and other businesses.
- McCormick de Mexico Integration — McCormick de Mexico integration is substantially completed. Gain on remeasurement of previously held equity interest resulted from acquiring an additional 25% of McCormick de Mexico on January 2, 2026, increasing ownership to 75%.
- 9-Month Results
- 9-month 2026 net sales were $5,835.3 million; 9-month 2025 were $4,989.9 million.
- 9-month 2026 total adjusted operating income increased 23.8% (reported), 21.6% (constant currency).
- 9-month 2026 diluted EPS was $4.69; 9-month 2025 was $2.09.
- 9-month 2026 adjusted diluted EPS was $2.32; 9-month 2025 was $2.14.
- Net cash flow from operating activities for 9 months 2026 was $598.8 million.
- Net cash flow used in investing activities for 9 months 2026 was ($861.1 million).
- Net cash flow from financing activities for 9 months 2026 was $490.3 million.
- 9-month 2026 special charges for income tax rate calculation were $820.5 million; 9-month 2025 were $656.7 million.
- 9-month 2026 special charges included $19.2 million net income impact from transaction expenses in interest expense.
All 114 details
- Q3 organic sales growth was 1.9%.
- Q3 net sales included a 0.9% favorable currency impact.
- Q3 gross profit margin expanded 190 basis points versus prior year.
- Q3 adjusted gross profit margin expanded 180 basis points versus prior year.
- Q3 operating income was $217 million.
- Q3 earnings per share was $0.36.
- Q3 special charges lowered diluted EPS by $0.50.
- Q3 adjusted EPS increased 1.2%.
- Q3 sales from McCormick de Mexico contributed 14% to the sales increase.
- Q3 Consumer segment net sales increased 25% to $1,215 million.
- Q3 Flavor Solutions segment net sales increased 8% to $809 million.
- Q3 Consumer segment adjusted operating income increased 24% to $241 million.
- Q3 Flavor Solutions segment adjusted operating income increased 18% to $117 million.
- Fiscal 2026 net sales growth in constant currency is 12% to 16%.
- Fiscal 2026 contribution from McCormick de Mexico acquisition is 11% to 13%.
- Fiscal 2026 organic sales growth is 1% to 3%.
- Fiscal 2026 adjusted operating income growth is 16% to 20%.
- Fiscal 2026 adjusted operating income growth in constant currency is 15% to 19%.
- Fiscal 2026 adjusted EPS percentage change is 2% to 5%.
- Fiscal 2026 adjusted EPS percentage change in constant currency is 1% to 4%.
- Fiscal 2026 adjusted gross margin expected to expand 100 to 120 basis points.
- Fiscal 2026 expected tax rate is approximately 24.0% (vs 21.5% in 2025).
- Fiscal 2026 higher net interest expense is primarily due to McCormick de Mexico transaction.
- Fiscal 2026 financial results consolidate McCormick de Mexico from January 2026.
- Unilever Foods transaction excludes India and other excluded businesses.
- Combined company expected $20 billion in fiscal 2025 revenue.
- Combined company expected 21% operating margin and strong cash flow.
- Expected mid- to high-single-digit adjusted EPS accretion within 12 months post-close.
- Expected mid-to high-teens adjusted EPS accretion in Year 3.
- Combined company expected $600 million annual run-rate cost synergies, net of reinvestments.
- Approximately two-thirds of the $600 million annual run-rate cost synergies expected to be achieved by Year 2 post-close.
- Company expects to identify approximately $100 million of incremental cost and revenue synergies that will be reinvested to further support growth.
- Cost synergies expected to be driven primarily by SG&A, procurement, and manufacturing and logistics efficiencies.
- McCormick has announced the planned future operating model and leadership team for the combined company.
- Companies have established global transition service agreements designed to support business continuity from Day 1 and facilitate a phased exit over approximately two years following close.
- Unilever Foods transaction expected to close by mid-2027, subject to customary closing conditions and regulatory approvals.
- McCormick de Mexico integration is substantially completed.
- Q3 2026 gross profit increased by $150 million from Q3 2025.
- Q3 2026 adjusted operating income increased 21% in constant currency.
- Q3 2026 Flavor Solutions segment adjusted operating income increased 16% in constant currency.
- Q3 2026 Consumer segment sales from McCormick de Mexico contributed 23%.
- Q3 2026 Flavor Solutions segment sales from McCormick de Mexico contributed 4%.
- Q3 2026 Consumer segment organic sales growth was 1% (2% price, 1% volume/mix decline).
- Q3 2026 Flavor Solutions segment organic sales growth was 3% (2% price, 1% volume/mix increase).
- Special charges included a $43.1 million non-cash impairment charge and $1.8 million exit costs.
- Impairment charge and exit costs related to ceasing a pepper sourcing project in Malaysia.
- Q3 2026 adjusted income tax rate was 22.6% (vs 16.1% in 2025).
- Fiscal 2026 net sales outlook expects total volumes to be stable with increased pricing benefits.
- Fiscal 2026 adjusted operating income outlook includes IEEPA tariff refund benefit offset by inflationary costs and Middle East conflict costs.
- Fiscal 2026 adjusted operating income outlook includes increased SG&A for brand marketing, technology, growth initiatives, and incentive compensation build-back.
- Income from unconsolidated operations no longer reflects McCormick de Mexico ownership interest after January 2026 acquisition.
- Income attributable to noncontrolling interest reflects elimination of 25% minority interest in McCormick de Mexico Net Income attributable to Grupo Herdez.
- Fiscal 2026 outlook expects foreign currency rates to favorably impact net sales by 1%, adjusted operating income by 1%, and adjusted EPS by 1%.
- Unilever Foods transaction was announced in March 2026.
- Combined company's $20 billion fiscal 2025 revenue includes McCormick's FY ended Nov 30, 2025, and Unilever Foods' FY ended Dec 31, 2025.
- Unilever Foods' financials for combined revenue are based on 2025 IFRS, adjusted for separated business, translated at 2025 average EUR/USD rate of 1.124.
- Unilever Foods transaction is expected to be accretive to net sales growth rate and operating margin.
- Integration planning for Unilever Foods includes a dedicated Integration Management Office and 20 cross-functional teams with over 200 employees.
- Detailed bottom-up Day 1 planning identified a clear pipeline of quantified initiatives for Unilever Foods integration.
- Unilever Foods transaction excludes Unilever's food business in Nepal and Portugal, its Lifestyle & Nutrition business, Buavita business, Lipton Ready-to-Drink business, and other businesses.
- Gain on remeasurement of previously held equity interest resulted from acquiring an additional 25% of McCormick de Mexico on January 2, 2026, increasing ownership to 75%.
- Q3 2026 net sales were $2,024.8 million; Q3 2025 were $1,724.9 million.
- Q3 2026 cost of goods sold was $1,229.9 million; Q3 2025 was $1,079.8 million.
- Q3 2026 selling, general and administrative expense was $436.4 million; Q3 2025 was $352.5 million.
- Q3 2026 special charges were $141.5 million; Q3 2025 were $3.9 million.
- Q3 2026 operating income decreased 24.8% to $217.0 million.
- Q3 2026 operating income margin was 10.7%, a 600 basis point decline.
- Q3 2026 interest expense was $68.4 million; Q3 2025 was $50.2 million.
- Q3 2026 income from consolidated operations before taxes was $154.5 million; Q3 2025 was $247.9 million.
- Q3 2026 income tax expense was $49.9 million; Q3 2025 was $39.3 million.
- Q3 2026 net income from consolidated operations was $104.6 million; Q3 2025 was $208.6 million.
- Q3 2026 income from unconsolidated operations was $3.0 million; Q3 2025 was $19.1 million.
- Q3 2026 net income was $107.6 million; Q3 2025 was $227.7 million.
- Q3 2026 net income attributable to noncontrolling interests was $10.0 million; Q3 2025 was $2.2 million.
- Q3 2026 net income attributable to McCormick was $97.6 million, a 56.7% decrease.
- Q3 2025 net income attributable to McCormick was $225.5 million.
- Q3 2026 diluted EPS decreased 57.1%.
- Q3 2026 basic EPS was $0.36; Q3 2025 basic EPS was $0.84.
- Q3 2026 average basic shares outstanding were 269.3 million; Q3 2025 were 268.6 million.
- Q3 2026 average diluted shares outstanding were 269.4 million; Q3 2025 were 269.3 million.
- Q3 2026 cash dividends paid per share were $0.48; Q3 2025 were $0.45.
- Q3 2026 gross profit increased 23.2%; adjusted gross profit increased 23.0%.
- Q3 2026 adjusted operating income was $358.5 million, a 22.1% increase.
- Q3 2026 adjusted operating income margin was 17.7%, a 70 basis point expansion.
- Q3 2025 gross profit was $645.1 million; adjusted gross profit was $646.1 million.
- Q3 2025 gross profit margin was 37.4%; adjusted gross profit margin was 37.5%.
- Q3 2025 adjusted operating income was $293.6 million; operating income margin was 16.7%.
- Q3 2025 adjusted operating income margin was 17.0%.
- Q3 2026 income tax rate was 32.3%; Q3 2025 income tax rate was 15.9%.
- Q3 2026 adjusted net income was $231.7 million; Q3 2025 was $229.1 million.
- Q3 2026 Consumer segment net sales had 0.6% favorable currency impact, 24.3% constant currency growth.
- Q3 2026 Consumer segment organic sales growth was 1.1% (-1.1% volume/mix, 2.2% price).
- Q3 2026 Consumer Americas net sales increased 31.7% (reported), 31.8% (constant currency), -0.3% (organic).
- Q3 2026 Consumer EMEA net sales increased 5.2% (reported), 5.0% (constant currency), 5.0% (organic).
- Q3 2026 Consumer APAC net sales increased 10.7% (reported), 4.4% (constant currency), 4.4% (organic).
- Q3 2026 Flavor Solutions net sales had 1.3% favorable currency impact, 6.4% constant currency growth.
- Q3 2026 Flavor Solutions organic sales growth was 3.0% (0.8% volume/mix, 2.2% price).
- Q3 2026 Flavor Solutions Americas net sales increased 8.4% (reported), 7.6% (constant currency), 2.7% (organic).
- Q3 2026 Flavor Solutions EMEA net sales increased 1.6% (reported), 1.2% (constant currency), 1.2% (organic).
- Q3 2026 Flavor Solutions APAC net sales increased 14.2% (reported), 8.3% (constant currency), 8.3% (organic).
- Q3 2026 Consumer segment adjusted operating income increased 24.4% (reported), 0.6% (currency).
- Q3 2026 Flavor Solutions adjusted operating income increased 17.6% (reported), 2.2% (currency).
- Q3 2026 total adjusted operating income increased 22.1% (reported), 1.2% (currency).
- 9-month 2026 net sales were $5,835.3 million; 9-month 2025 were $4,989.9 million.
- 9-month 2026 total adjusted operating income increased 23.8% (reported), 21.6% (constant currency).
- 9-month 2026 diluted EPS was $4.69; 9-month 2025 was $2.09.
- 9-month 2026 adjusted diluted EPS was $2.32; 9-month 2025 was $2.14.
- Net cash flow from operating activities for 9 months 2026 was $598.8 million.
- Net cash flow used in investing activities for 9 months 2026 was ($861.1 million).
- Net cash flow from financing activities for 9 months 2026 was $490.3 million.
- Q3 2026 special charges for income tax rate calculation were $308.4 million; Q3 2025 were $252.8 million.
- 9-month 2026 special charges for income tax rate calculation were $820.5 million; 9-month 2025 were $656.7 million.
- Q3 2026 special charges included $12.4 million net income impact from transaction expenses in interest expense.
- 9-month 2026 special charges included $19.2 million net income impact from transaction expenses in interest expense.
- Q3 Results
At the time of this announcement, MKC was trading at $47.50 on NYSE in the Trade & Services sector, with a market capitalization of approximately $12.5B. The 52-week trading range was $44.82 to $72.41. This news item was assessed with positive market sentiment and an importance score of 7 out of 10. Source: PR Newswire.