HUNT VALLEY, Md., Oct. 7, 2025 /PRNewswire/ — McCormick & Company, Incorporated (NYSE:MKC), a global leader in flavor, today reported financial results for the third quarter ended August 31, 2025 and reaffirmed sales growth outlook and updated operating income and earnings per share outlook for fiscal 2025.
- Net Sales increased 3% in the third quarter and included a 1% favorable impact from currency. Organic sales growth of 2% was volume-led.
- Operating income was $289 million in the third quarter compared to $287 million in the year-ago period. Adjusted operating income was $294 million compared to $288 million in the year-ago period.
- Earnings per share was $0.84 in the third quarter as compared to $0.83 in the year-ago period. Adjusted earnings per share was $0.85 as compared to $0.83 in the year-ago period.
- For fiscal year 2025, McCormick reaffirmed its sales growth outlook and updated operating income and earnings per share outlook to reflect rising commodity costs and incremental tariffs.
Chairman, President, and CEO’s Remarks
Brendan M. Foley, Chairman, President, and CEO, stated, “Our third quarter results marked our fifth consecutive quarter of volume-led growth, reflecting our differentiation and the benefit of continued investments in our brands, expanded distribution, and innovation. As a result of the dynamic global trade environment, our gross margin was further pressured by rising costs; however, we continued to drive operating profit growth through the effective execution of our cost savings initiatives. We remain disciplined on actions within our control and agile in adapting to external dynamics, positioning McCormick for sustained long-term growth.”
“As consumer trends evolve, demand for flavor remains strong. Our speed and agility in executing proven growth strategies enable us to capture the demand for flavor and value across all occasions and channels. Amid rising inflation from higher commodity costs and tariffs, we continue to invest in our growth plans, supported by our cost savings initiatives, which strengthen our resilience and differentiated fundamentals. Our year-to-date performance combined with our growth plans reinforce our confidence in achieving our updated outlook for 2025. We remain confident in the sustained momentum of our business and in our ability to drive shareholder value.”
“Finally, I’d like to recognize McCormick employees worldwide. Their talent, dedication, and contributions are the driving force behind our momentum and success. We remain committed to advancing our power of people culture and cultivating the next generation of leaders and capabilities that will fuel our future success.”
Third Quarter 2025 Results
Sales Metrics
|
Third Quarter 2025 |
|||||
|
As Reported |
Organic(1) |
||||
|
% Change |
Volume/ |
Price |
% Change |
||
|
Total Net Sales |
2.7 % |
1.2 % |
0.6 % |
1.8 % |
|
|
Total Consumer |
3.8 % |
2.2 % |
0.4 % |
2.6 % |
|
|
Americas |
2.7 % |
2.7 % |
0.0 % |
2.7 % |
|
|
EMEA |
11.4 % |
1.6 % |
2.8 % |
4.4 % |
|
|
APAC |
0.0 % |
(0.6) % |
(0.2) % |
(0.8) % |
|
|
Total Flavor Solutions |
1.2 % |
(0.3) % |
0.9 % |
0.6 % |
|
|
Americas |
0.1 % |
(1.3) % |
2.2 % |
0.9 % |
|
|
EMEA |
2.1 % |
(1.0) % |
(2.1) % |
(3.1) % |
|
|
APAC |
7.7 % |
9.0 % |
(2.7) % |
6.3 % |
|
|
(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 third quarter of 2025, organic sales are equal to constant currency sales. |
Profitability Metrics
($ in millions except per share data)
|
Third Quarter 2025 |
|||||||||
|
As Reported |
Adjusted |
||||||||
|
Q3 2025 |
vs. 2024 |
Q3 2025 |
vs. 2024 |
||||||
|
Gross profit |
$ 645.1 |
(0.7) % |
$ 646.1 |
(0.6) % |
|||||
|
Gross profit margin |
37.4 % |
(130) bps |
37.5 % |
(120) bps |
|||||
|
Operating income |
$ 288.7 |
0.8 % |
$ 293.6 |
1.8 % |
|||||
|
Operating income margin |
16.7 % |
(40) bps |
17.0 % |
(20) bps |
|||||
|
Net income |
$ 225.5 |
1.1 % |
$ 229.1 |
2.1 % |
|||||
|
Earnings per share – diluted |
$ 0.84 |
1.2 % |
$ 0.85 |
2.4 % |
|||||
Third Quarter 2025 Results
Net sales increased 3% in the third quarter compared to the year-ago period and included a 1% favorable impact from currency. Organic sales increased 2%, driven by volume of more than 1%, with a 1% contribution from price.
- Consumer segment net sales increased 4% from the third quarter of 2024 to $973 million, including a 1% favorable impact from currency. Organic sales increased 3%, driven by volume and product mix.
- Flavor Solutions segment net sales increased 1% from the third quarter of 2024 to $752 million, with minimal impact from currency. Organic sales increased 1%, driven by price.
Gross profit for the third quarter decreased by $5 million from the comparable period in 2024. Gross profit margin contracted 130 basis points versus the third quarter of last year. Excluding special charges, adjusted gross profit contracted 120 basis points versus the year-ago period. The contraction was driven by higher commodity costs, tariffs, and costs to support increased capacity for future growth, partially offset by cost savings led by the Company’s Comprehensive Continuous Improvement (CCI) program.
Operating income was $289 million in the third quarter of 2025 compared to $287 million in the third quarter of 2024. Excluding special charges, adjusted operating income was $294 million compared to $288 million in the year-ago period. Adjusted operating income increased 2% from the year-ago period, with minimal impact from currency. In constant currency, adjusted operating income increased 2%, driven by decreased selling, general and administrative (SG&A) expenses, due to lower employee-related benefit expense 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 4% in the third quarter of 2025 compared to the year-ago period to $194 million, or 3% in constant currency. The increase was driven by higher sales and decreased SG&A expenses, partially offset by increased commodity costs and tariffs.
- Flavor Solutions segment operating income, excluding special charges, decreased 2% in the third quarter of 2025 compared to the year-ago period to $100 million, with minimal impact from currency. The 2% decrease in constant currency was driven by higher commodity costs and tariffs, partially offset by pricing and decreased SG&A expenses.
Earnings per share was $0.84 in the third quarter of 2025 compared to $0.83 in the third quarter of 2024. Special charges lowered earnings per share by $0.01 per share in the third quarter of 2025. Excluding the impact of special charges, adjusted earnings per share was $0.85 in the third quarter of 2025 compared to $0.83 in the third quarter of 2024. The increase was primarily attributable to the impact of higher operating income.
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 profit growth.
The Company’s fiscal 2025 outlook reflects mitigation plans related to tariffs which are currently in place and have increased since August 1, 2025. 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.
|
Current Guide October 2025 |
Prior Guide June 2025 |
||||
|
Reported |
Constant |
Reported |
Constant |
||
|
Net sales growth |
0% to 2% |
1% to 3%(1) |
0% to 2% |
1% to 3%(1) |
|
|
Operating income |
1% to 3% |
2% to 4% |
|||
|
Adjusted operating income |
2% to 4% |
3% to 5% |
3% to 5% |
4% to 6% |
|
|
Earnings per share (EPS) |
$2.95 to $3.00 1% to 3% |
$2.98 to $3.03 2% to 4% |
|||
|
Adjusted EPS |
$3.00 to $3.05 2% to 4% |
4% to 6% |
$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. |
Current Guide – Expectations:
Net Sales:
- Total volume-led growth
- Gradual improvement in China Consumer
Operating Income:
- Gross margin expansion impacted by increased commodity costs due to global trade uncertainty and tariffs currently in place.
- SG&A benefits from the Company’s CCI program, inclusive of streamlining initiatives, partially offset by growth investments, including brand marketing and digital.
- Anticipate $20 million in special charges primarily related to organizational and streamlining actions.
Earnings per Share:
- Operating income growth partially offset by:
- Tax rate of approximately 22% vs. 20.5% in 2024.
- High-single digit year-over-year decline in income from unconsolidated operations due to U.S. dollar strengthening vs. Mexican peso partially offset by continued strength in McCormick de Mexico’s underlying performance.
- Special charges expected to impact EPS by $0.05 in 2025.
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 gross profit, adjusted gross profit margin, 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 |
Nine Months Ended |
|||||
|
8/31/2025 |
8/31/2024 |
8/31/2025 |
8/31/2024 |
||||
|
Gross profit |
$ 645.1 |
$ 649.9 |
$ 1,871.9 |
$ 1,868.8 |
|||
|
Impact of special charges included in |
1.0 |
0.0 |
1.0 |
0.0 |
|||
|
Adjusted gross profit |
$ 646.1 |
$ 649.9 |
$ 1,872.9 |
$ 1,868.8 |
|||
|
Gross profit margin (1) |
37.4 % |
38.7 % |
37.5 % |
37.9 % |
|||
|
Impact of special charges |
0.1 % |
0.0 % |
0.0 % |
0.0 % |
|||
|
Adjusted gross profit margin (1) |
37.5 % |
38.7 % |
37.5 % |
37.9 % |
|||
|
Operating income |
$ 288.7 |
$ 286.5 |
$ 759.7 |
$ 754.1 |
|||
|
Impact of special charges |
4.9 |
1.9 |
17.7 |
7.9 |
|||
|
Adjusted operating income |
$ 293.6 |
$ 288.4 |
$ 777.4 |
$ 762.0 |
|||
|
% change versus year-ago period |
1.8 % |
2.0 % |
|||||
|
Operating income margin (2) |
16.7 % |
17.1 % |
15.2 % |
15.3 % |
|||
|
Impact of special charges |
|
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