McCormick & Company (MKC) Reports Mixed Q4 2025 Results

McCormick & Company, a leader in flavor, reported its financial results for the fourth quarter and fiscal year 2025. The results showed a revenue beat but a slight miss on earnings per share, with the company providing a cautiously optimistic outlook for 2026.

Q4 Sales Rise, But Higher Costs Pressure Profitability

In the fourth quarter of 2025, McCormick & Company (NYSE: MKC) reported a revenue of $1.85 billion, surpassing the anticipated $1.84 billion. This 3% increase from the previous year was bolstered by a 1% favorable impact from currency fluctuations. However, the company’s earnings per share (EPS) came in at $0.86, slightly below the expected $0.87, despite showing growth from the previous year’s $0.80.

The company’s consumer segment saw a notable 4% increase in net sales, reaching $1.127 billion. This growth was driven by a 2% increase in pricing and a 1% rise in volume and product mix. Meanwhile, the flavor solutions segment experienced a 2% increase in sales, totaling $723 million, with a 1% impact from currency.

Despite the revenue beat, McCormick’s gross profit for the quarter saw a slight decline, attributed to higher commodity costs and tariffs. The adjusted gross profit margin contracted by 120 basis points, reflecting the challenges faced in maintaining profitability amidst rising costs. Operating income improved to $311 million from $306 million in the previous year, with adjusted figures showing a 3% increase.

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2026 Outlook Calls for Steady Growth and Higher Investment

Looking ahead to 2026, McCormick’s outlook suggests continued investment in core categories to sustain growth. The company anticipates a net sales increase of 13% to 17%, driven by the acquisition of McCormick de Mexico and organic sales growth of 1% to 3%. Adjusted operating income is expected to grow between 16% and 20%, supported by margin expansion and contributions from recent acquisitions.

The company plans to leverage its Comprehensive Continuous Improvement program to fuel growth investments and drive operating margin expansion. However, McCormick acknowledges the challenges posed by global trade dynamics and elevated costs, which it plans to mitigate through competitive advantages and cost management strategies.

McCormick’s guidance for adjusted earnings per share in 2026 ranges from $3.05 to $3.13, reflecting growth of 2% to 5%. The company expects foreign currency rates to have a favorable impact on net sales, operating income, and earnings per share by approximately 1%. Despite the challenges, McCormick remains committed to delivering long-term value creation and maintaining strong cash flow, which will support shareholder returns through dividends.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.