HUNT VALLEY, Md., June 26, 2025 /PRNewswire/ — McCormick & Company, Incorporated (NYSE:MKC), a global leader in flavor, today reported financial results for the second quarter ended May 31, 2025 and reaffirmed fiscal 2025 outlook.
- Net Sales increased 1% in the second quarter, driven by volume growth, and included a 1% unfavorable impact from currency. Organic sales growth of 2% was driven by volume.
- Operating income was $246 million in the second quarter compared to $234 million in the year-ago period. Adjusted operating income was $259 million compared to $236 million in the year-ago period.
- Earnings per share was $0.65 in the second quarter as compared to $0.68 in the year-ago period. Adjusted earnings per share was $0.69 and comparable to the year-ago period.
- For fiscal year 2025, McCormick reaffirmed its net sales, adjusted operating profit, and adjusted earnings per share outlook, which reflects plans to mitigate current tariff impact.
Chairman, President, and CEO’s Remarks
Brendan M. Foley, Chairman, President, and CEO, stated, “We are pleased with our strong results for the first half of the year, as we are managing in a dynamic environment. Our continued volume-driven performance and share gains across core categories reflect the success of our prioritized investments in the areas that are driving the greatest value and will sustain our momentum for the remainder of 2025 and beyond.
“As consumer preferences evolve, we continue to execute on our proven strategies that are in alignment with consumer trends, with speed and agility to capture demand for flavor and value across all occasions and channels. Additionally, for this fiscal year, we are well positioned with our robust plans to mitigate current tariff related costs, fuel growth investments, and expand operating margins. We remain confident in the sustained trajectory of our business and in our ability to achieve our 2025 outlook as well as our long-term objectives, and to drive shareholder value.”
“Lastly, I want to extend my gratitude to McCormick employees around the globe; they continue to be the cornerstone of our success and achievements. I am constantly inspired and energized by their commitment and contributions. Importantly, we continue to prioritize elevating our power of people culture and building the next generation of leaders and capabilities to drive our continued success.”
Second Quarter 2025 Results
Sales Metrics
|
Second Quarter 2025 |
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|
As |
Organic(1) |
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|
% Change |
Volume/ |
Price |
% Change |
||
|
Total Net Sales |
1.0 % |
1.3 % |
0.3 % |
1.6 % |
|
|
Total Consumer |
2.9 % |
3.3 % |
(0.3) % |
3.0 % |
|
|
Americas |
2.4 % |
3.5 % |
(0.7) % |
2.8 % |
|
|
EMEA |
4.9 % |
2.2 % |
1.1 % |
3.3 % |
|
|
APAC |
2.9 % |
3.6 % |
0.1 % |
3.7 % |
|
|
Total Flavor Solutions |
(1.3) % |
(1.0) % |
1.0 % |
0.0 % |
|
|
Americas |
(1.0) % |
(1.0) % |
2.4 % |
1.4 % |
|
|
EMEA |
(4.7) % |
(4.7) % |
(2.3) % |
(7.0) % |
|
|
APAC |
3.1 % |
5.7 % |
(2.3) % |
3.4 % |
|
|
(1) Organic sales growth is defined as the impact of volume/mix and price and excludes the impact of acquisitions or divestitures, as applicable, and foreign currency. For the second quarter of 2025, organic sales are equal to constant currency sales. |
Profitability Metrics
($ in millions except per share data)
|
Second Quarter 2025 |
|||||||||
|
As Reported |
Adjusted |
||||||||
|
Q2 2025 |
vs. 2024 |
Q2 2025 |
vs. 2024 |
||||||
|
Gross profit |
$ 622.8 |
0.5 % |
$ 622.8 |
0.5 % |
|||||
|
Gross profit margin |
37.5 % |
(20) bps |
37.5 % |
(20) bps |
|||||
|
Operating income |
$ 245.8 |
5.0 % |
$ 258.6 |
9.7 % |
|||||
|
Operating income margin |
14.8 % |
60 bps |
15.6 % |
120 bps |
|||||
|
Net income |
$ 175.0 |
(5.0) % |
$ 184.8 |
(0.4) % |
|||||
|
Earnings per share – diluted |
$ 0.65 |
(4.4) % |
$ 0.69 |
0.0 % |
|||||
Second Quarter 2025 Results
Net sales increased 1% in the second quarter compared to the year-ago period and included a 1% unfavorable impact from currency. Organic sales increased 2%, driven by volume and product mix.
- Consumer segment net sales increased 3% from the second quarter of 2024 to $931 million, with minimal impact from currency. Organic sales increased 3%, driven by volume and product mix.
- Flavor Solutions segment net sales decreased 1% from the second quarter of 2024 to $729 million, including a 1% unfavorable impact from currency. Organic sales were flat year-over-year, driven by a 1% increase from price offset by a 1% decrease in volume and product mix.
Gross profit for the second quarter increased by $3 million from the comparable period in 2024. Gross profit margin contracted 20 basis points versus the second quarter of last year. This contraction was driven by costs to support increased capacity for future growth and higher commodity costs, partially offset by cost savings led by the Company’s Comprehensive Continuous Improvement (CCI) program.
Operating income was $246 million in the second quarter of 2025 compared to $234 million in the second quarter of 2024. Excluding special charges, adjusted operating income was $259 million compared to $236 million in the year-ago period. Adjusted operating income increased 10% from the year-ago period and included a 1% unfavorable impact from currency. In constant currency, adjusted operating income increased 11% from the year-ago period, due to decreased selling, general and administrative (SG&A) expenses driven by a shift in timing of stock-based compensation expense from the second quarter into the first quarter of 2025 and cost savings led by the CCI program, including SG&A streamlining initiatives, partially offset by lower gross margin, sustained brand marketing investments, and increased technology investments.
- Consumer segment operating income, excluding special charges, increased 10% in the second quarter of 2025 compared to the year-ago period to $164 million, with minimal impact from currency. The increase was primarily driven by decreased SG&A expenses.
- Flavor Solutions segment operating income, excluding special charges, grew 10% in the second quarter of 2025 compared to the year-ago period to $95 million, or 13% in constant currency, driven by product mix, pricing, and decreased SG&A expenses.
Earnings per share was $0.65 in the second quarter of 2025 compared to $0.68 in the second quarter of 2024. Special charges lowered earnings per share by $0.04 per share and $0.01 per share in the second quarter of 2025 and 2024, respectively. Excluding the impact of special charges, adjusted earnings per share was $0.69 in the second quarter of 2025 and 2024. The comparable result was attributable to the impact of higher operating income and higher income from unconsolidated operations, offset primarily by a less favorable tax rate due to discrete tax items.
Fiscal Year 2025 Financial Outlook
McCormick’s fiscal 2025 outlook continues to reflect the Company’s prioritized investments in key categories to sustain strong volume trends and drive long-term profitable growth while appreciating the current uncertainty of the consumer and macro environment. The Company’s CCI program is continuing to fuel growth investments while also driving operating margin expansion.
The Company’s fiscal 2025 outlook reflects plans to offset costs related to tariffs, which are currently in place and include a 10% tariff on all U.S. imported goods, an incremental 30% tariff on goods imported from China into the U.S. as well as reciprocal tariffs from other countries. Most of our U.S. imports from Mexico and Canada are currently compliant with the United States-Mexico-Canada Agreement. The Company’s mitigating actions include: sourcing plans supported by advanced analytics, cost savings initiatives, and revenue growth management. Due to the ongoing uncertainty around potential new U.S. or retaliatory tariffs, the Company’s outlook is based on tariffs currently in place and does not factor in any potential actions that may arise during the remainder of 2025.
|
As Reported |
Constant |
Expectations: |
|||
|
Net sales growth |
0% to 2% |
1% to 3%(1) |
Drivers: • Total volume-led growth • Gradual improvement in China Consumer |
||
|
Operating income |
2% to 4% |
Gross margin expansion impacted by increased
SG&A benefits from CCI, inclusive of streamlining
Anticipate $20 million in special charges primarily
|
|||
|
Adjusted |
3% to 5% |
4% to 6% |
|||
|
Earnings per |
$2.98 to $3.03 2% to 4% |
Operating income growth, partially offset by: • Tax rate of 22% to 23% vs. 20.5% in 2024 • High-single digit year-over-year decline in
Special charges expected to impact EPS by $0.05 in |
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|
Adjusted EPS |
$3.03 to $3.08 3% to 5% |
5% to 7% |
|
(1) |
Organic sales growth is defined as the impact of volume/mix and price and excludes the impact of acquisitions or divestitures, as applicable, and foreign currency, and is expected to be a 1% to 3% increase over the 2024 level. |
The Company expects foreign currency rates to unfavorably impact net sales by 1%, adjusted operating income by 1%, and adjusted earnings per share by 2%.
For fiscal 2025, the Company expects strong cash flow driven by profit and working capital initiatives and anticipates returning a significant portion of cash flow to shareholders through dividends.
Non-GAAP Financial Measures
The following tables include financial measures of organic net sales, adjusted operating income, adjusted operating income margin, adjusted income tax expense, adjusted income tax rate, adjusted net income, and adjusted diluted earnings per share. These represent non-GAAP financial measures which are prepared as a complement to our financial results prepared in accordance with United States generally accepted accounting principles. These financial measures exclude the impact, as applicable, of the following:
Special charges – Special charges consist of expenses and income associated with certain actions undertaken by us to reduce fixed costs, simplify or improve processes, and improve our competitiveness. Included in special charges are transaction and integration costs.
We believe that these non-GAAP financial measures are important. The exclusion of the items noted above provides additional information that enables enhanced comparisons to prior periods and, accordingly, facilitates the development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of our ongoing operations and analyze our business performance and trends.
These non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP; however, they should not be viewed as a substitute for, or superior to, GAAP results. Furthermore, these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, as they may calculate them differently than we do. We intend to continue providing these non-GAAP financial measures as part of our future earnings discussions, ensuring consistency in our financial reporting. A reconciliation of these non-GAAP financial measures to the related GAAP financial measures follows:
|
(in millions except per share data) |
Three Months Ended |
Six Months Ended |
|||||
|
5/31/2025 |
5/31/2024 |
5/31/2025 |
5/31/2024 |
||||
|
Operating income |
$ 245.8 |
$ 234.1 |
$ 471.0 |
$ 467.6 |
|||
|
Impact of special charges |
12.8 |
1.8 |
12.8 |
6.0 |
|||
|
Adjusted operating income |
$ 258.6 |
$ 235.9 |
$ 483.8 |
$ 473.6 |
|||
|
% increase versus year-ago period |
9.7 % |
2.2 % |
|||||
|
Operating income margin (1) |
14.8 % |
14.2 % |
14.4 % |
14.4 % |
|||
|
Impact of special charges |
0.8 % |
0.2 % |
0.4 % |
0.2 % |
|||
|
Adjusted operating income margin (1) |
15.6 % |
14.4 % |
14.8 % |
14.6 % |
|||
|
Income tax expense |
$ 49.3 |
$ 26.2 |
$ 90.9 |
$ 75.8 |
|||
|
Impact of special charges |
3.0 |
0.4 |
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