McCormick & Company (MKC) Q1 2026 earnings summary

Executive summary

• Announced a strategic combination between McCormick and Unilever Foods to form a global flavor-focused leader, leveraging complementary strengths and iconic brands across categories and geographies.

• Net sales grew 16.7% year-over-year in Q1 2026, driven by the McCormick de Mexico acquisition, favorable pricing, and positive currency impacts.

• Adjusted operating income increased 19% to $268 million, and adjusted EPS grew 10% to $0.66, excluding a significant non-cash gain from the acquisition.

• Profitability benefited from acquisition accretion and inflation mitigation strategies.

• Remain on track to achieve full-year 2026 outlook, with strong performance in both Consumer and Flavor Solutions segments.

Financial highlights

• Q1 2026 net sales: $1,873.9 million, up 16.7% year-over-year; adjusted gross profit: $723.9 million (38.6% of net sales), up 19.9%.

• Adjusted operating income: $267.6 million (14.3% margin), up from $225.2 million year-over-year.

• Adjusted EPS: $0.66, up from $0.60; reported EPS: $3.77, including a $3.22 gain from the McCormick de Mexico acquisition.

• Transaction values Unilever Foods at $44.8 billion and McCormick at $21 billion, both at a 13.8x 2025 EBITDA multiple.

• $600 million in annual run-rate cost synergies expected by year three, with two-thirds realized by year two.

Outlook and guidance

• Fiscal 2026 net sales growth projected at 13% to 17%, with 11% to 13% from the McCormick de Mexico acquisition and 1% to 3% organic growth.

• Adjusted operating income expected to grow 16% to 20%; adjusted EPS forecasted at $3.05 to $3.13.

• The combination is expected to be accretive to growth, adjusted operating margin, and adjusted EPS in the first full year post-close.

• Continued reinvestment of $100 million in incremental revenue and cost synergies into brand marketing and innovation.

• Net leverage expected at or below 4x at closing, with a plan to reduce to 3x within two years.