McCormick & Company (MKC) Q4 2025 earnings summary

Executive summary

• Achieved 2% organic sales growth in Q4 2025, with both Consumer and Flavor Solutions segments contributing and the seventh consecutive quarter of Consumer segment volume growth.

• Profitability was pressured by higher-than-expected inflation, commodity costs, and tariffs, but offset by pricing actions, cost management, and productivity initiatives.

• Continued investment in supply chain, digital transformation, and brand marketing to drive future growth.

• Acquisition of McCormick de Mexico strengthens global flavor leadership and is accretive to earnings, supporting the 2026 outlook.

• Board authorized a 7% increase in quarterly dividend, marking 40 consecutive years of increases.

Financial highlights

• Q4 2025 net sales were $1,850.4M, up 2.9% year-over-year (2.1% in constant currency); FY 2025 net sales were $6,840.3M, up 1.7% (1.9% in constant currency).

• Adjusted operating income for Q4 2025 was $316.6M (up 2.9%); FY 2025 was $1,094.0M (up 2.3%).

• Adjusted EPS for Q4 2025 was $0.86 (up 7.5%); FY 2025 was $3.00 (up 1.7%).

• Cash flow from operations in 2025 was $962M; $483M returned to shareholders via dividends; $222M in capital expenditures.

• Leverage ratio reduced, maintaining a strong and flexible balance sheet.

Outlook and guidance

• 2026 reported net sales growth expected at 12%–17%, with 11%–13% from the McCormick de Mexico acquisition and 1%–3% organic growth.

• Adjusted operating income expected to grow 15%–20% in constant currency; adjusted EPS guidance of $3.05–$3.13, up 2%–5% year-over-year.

• Gross margin expansion anticipated, with productivity savings and pricing actions to offset mid-single-digit cost inflation.

• Brand marketing spend to increase low to mid-teens; ERP implementation and digital transformation investments to continue.

• Tariff cost exposure for 2026 estimated at $70M, with mitigation through sourcing, productivity, and pricing.