McCormick & Company (MKC) Q2 2026 earnings summary

Executive summary

• Net sales grew 16.7% year-over-year in Q2 2026, driven by the McCormick de Mexico acquisition (12% contribution), favorable pricing, and positive currency impacts; organic sales up 1.7%.

• Adjusted operating income increased 30% to $336 million, and adjusted EPS rose 16% to $0.80, with a $0.07 per share benefit from a tariff refund; reported EPS was $0.56, impacted by special charges.

• Flavor Solutions segment showed robust organic growth and momentum, offsetting softer Consumer trends in the Americas, while Consumer segment saw share gains in EMEA and Asia Pacific.

• Integration planning for the Unilever Foods transaction is progressing, with synergy and accretion targets reaffirmed and operational milestones on track.

• The company reaffirmed its 2026 outlook, expecting continued growth, margin expansion, and strong free cash flow, supported by acquisitions and the proposed Unilever Foods combination.

Financial highlights

• Q2 2026 net sales: $1,936.6M (+16.7% YoY); gross profit margin expanded 270 bps to 40.2%, aided by acquisition, pricing, and a $28M tariff refund.

• Adjusted operating income reached $336M (up 30.1%), with a 17.4% margin; adjusted EPS was $0.80, up from $0.69.

• Cash flow from operations for the first half was $431M, up from $161M last year, driven by higher profitability and improved working capital.

• Consumer segment Q2 net sales up 23% to $1,143M, with 20% from McCormick de Mexico; Flavor Solutions segment Q2 net sales up 9% to $794M.

• Consumer segment adjusted operating income up 33% to $217M; Flavor Solutions up 26% to $120M.

Outlook and guidance

• Fiscal 2026 net sales growth projected at 13–17%, with 12–16% from McCormick de Mexico and 1–3% organic growth; foreign currency expected to add 1%.

• Adjusted operating income expected to grow 16–20%; adjusted EPS guidance is $3.05–$3.13, up 2–5% year-over-year.

• Gross margin expansion of 100–120 bps anticipated, offset by inflation and increased SG&A from growth investments.

• Expect Consumer volume improvement in H2, driven by revenue management, innovation, and expanded distribution; Flavor Solutions momentum anticipated to continue.

• $1.5–$2.0B targeted for debt paydown within two years post-Unilever Foods close.