Oct 1, 2026, 7:31 AM ETConsumer Defensive

McCormick & Company — Third Quarter 2026 Earnings Summary

MKCMCCORMICK & CO INC

Financial Performance

Net sales increased 17.4% year-over-year to $2,024.8 million, including a 0.9% favorable impact from currency; organic sales growth was 1.9%.
Gross profit margin expanded 190 basis points to 39.3% versus the prior year; adjusted gross profit margin expanded 180 basis points.
Operating income was $217.0 million compared to $288.7 million in the prior year; adjusted operating income was $358.5 million, up 22.1% year-over-year.
Diluted earnings per share (EPS) was $0.36 compared to $0.84 in the prior year; special charges lowered diluted EPS by $0.50.
Adjusted diluted EPS was $0.86 compared to $0.85 in the prior year.
Net income attributable to McCormick was $97.6 million compared to $225.5 million in the prior year.
Cash and cash equivalents increased to $331.1 million as of August 31, 2026, from $95.9 million as of November 30, 2025.
Short-term borrowings and current portion of long-term debt increased to $2,112.1 million from $890.5 million in the prior period.
Net cash flow provided by operating activities for the nine months ended August 31, 2026, was $598.8 million compared to $420.2 million in the prior year.
Net cash flow used in investing activities was $861.1 million, primarily driven by the acquisition of McCormick de Mexico ($729.9 million).
Net cash flow provided by financing activities was $490.3 million, driven by debt borrowings of $498.3 million and short-term borrowings of $958.8 million.

McCormick reaffirmed its fiscal 2026 outlook for net sales growth, adjusted operating income, and adjusted earnings per share.
Fiscal 2026 net sales growth is projected at 13% to 17% (12% to 16% in constant currency), with 11% to 13% contribution from the McCormick de Mexico acquisition.
Fiscal 2026 organic sales growth is projected at 1% to 3%.
Fiscal 2026 adjusted operating income is projected to grow 16% to 20% (15% to 19% in constant currency).
Fiscal 2026 adjusted EPS is projected to grow 2% to 5% (1% to 4% in constant currency).
Adjusted gross margin is expected to expand by 100 to 120 basis points from 2025.
The company expects foreign currency rates to favorably impact net sales by 1%, adjusted operating income by 1%, and adjusted EPS by 1%.
The company anticipates returning a significant portion of cash flow to shareholders through dividends.

Consumer segment net sales increased 24.9% to $1,215 million, driven by a 23% contribution from McCormick de Mexico and 1% favorable currency impact; organic sales grew 1%.
Flavor Solutions segment net sales increased 7.7% to $809 million, including a 4% contribution from McCormick de Mexico and 1% favorable currency impact; organic sales grew 3%.
Americas Consumer sales increased 31.7%, while EMEA Consumer sales increased 5.2% and APAC Consumer sales increased 10.7%.
Americas Flavor Solutions sales increased 8.4%, EMEA Flavor Solutions sales increased 1.6%, and APAC Flavor Solutions sales increased 14.2%.
The acquisition of McCormick de Mexico closed on January 2, 2026, and integration is substantially complete.
The Comprehensive Continuous Improvement (CCI) program drove cost savings and margin expansion, partially offset by higher commodity and freight costs.

The company operates in two segments: Consumer and Flavor Solutions, serving retailers, food manufacturers, and foodservice businesses across 150 countries.
The proposed combination with Unilever Foods is expected to create a global flavor-focused company with approximately $20 billion in fiscal 2025 revenue and a 21% operating margin.
The combined entity expects to realize approximately $600 million in annual run-rate cost synergies, with two-thirds achieved by Year 2 post-close.
The transaction is expected to be accretive to adjusted EPS, with mid-to-high-single-digit accretion anticipated within the first 12 months post-close and mid-to-high-teens accretion in Year 3.

Special charges of $141.5 million in the third quarter, including transaction/integration costs and a $43.1 million non-cash impairment charge related to a pepper sourcing project in Malaysia, impacted reported earnings.
Rising input and freight costs, inflationary pressures, and the conflict in the Middle East pose challenges to cost structures.
Global trade policies, tariffs, and foreign currency exchange rate volatility remain significant risks.
The pending transaction with Unilever Foods carries risks related to regulatory approvals, financing, integration execution, and potential disruption to business relationships.
Risks include the ability to drive revenue growth, offset cost pressures, and successfully integrate new businesses.

Chairman, President, and CEO Brendan M. Foley stated that results demonstrate the resilience of the flavor-focused business model and delivered strong sales growth with margin expansion.
Management expressed confidence in delivering the 2026 outlook due to an enhanced margin profile, operational discipline, and robust cash flow.
Foley noted that disciplined productivity initiatives helped offset rising costs, enabling continued investment in brands and innovation.
Management remains confident in the strategic benefits of the Unilever Foods combination and has established a future leadership team and operating model.
The tone reflects optimism regarding the "Power of People" culture and the successful execution of standalone priorities alongside integration planning.

McCormick acquired an additional 25% ownership interest in McCormick de Mexico on January 2, 2026, increasing its stake to a 75% controlling interest and consolidating its financial results.
A gain on the remeasurement of the previously held 50% equity interest was recorded, impacting the nine-month net income but excluded from adjusted net income.
The proposed merger with Unilever Foods excludes Unilever's food business in India, Nepal, Portugal, Lifestyle & Nutrition, Buavita, and Lipton Ready-to-Drink.
The transaction is expected to close by mid-2027, subject to customary closing conditions and regulatory approvals.
The company expects a tax rate of approximately 24.0% for fiscal 2026, compared to 21.5% in 2025.
Higher net interest expense is expected due to the McCormick de Mexico transaction.
Income from unconsolidated operations no longer reflects ownership in McCormick de Mexico subsequent to the acquisition.
Cash dividends paid per share for the nine months ended August 31, 2026, were $1.44, compared to $1.35 in the prior year.