Third Quarter 2026
Filed Oct 1, 2026McCormick Reports Solid Third Quarter Performance and Reaffirms 2026 Outlook
Third-quarter sales, gross margin and adjusted operating income expanded, supported by McCormick de Mexico, pricing and CCI savings, while GAAP operating income and diluted EPS declined because of special charges.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, three months ended August 31, 2026GAAP | $2.02B | – | 17.4 % |
| Organic net sales growth, three months ended August 31, 2026non-GAAP | 1.9 % | – | 1.9 % |
| Gross profit, three months ended August 31, 2026GAAP | $794.9M | – | 23.2 % |
| Gross profit margin, three months ended August 31, 2026GAAP | 39.3 % | – | 190 bps |
| Adjusted gross profit, three months ended August 31, 2026non-GAAP | $794.9M | – | 23.0 % |
| Adjusted gross profit margin, three months ended August 31, 2026non-GAAP | 39.3 % | – | 180 bps |
| Selling, general and administrative expense, three months ended August 31, 2026GAAP | 436.4 | – | – |
| Special charges, three months ended August 31, 2026GAAP | 141.5 | – | – |
| Operating income, three months ended August 31, 2026GAAP | $217M | – | (24.8) % |
| Operating income margin, three months ended August 31, 2026GAAP | 10.7 % | – | (600) bps |
| Adjusted operating income, three months ended August 31, 2026non-GAAP | $358.5M | – | 22.1 % |
| Adjusted operating income margin, three months ended August 31, 2026non-GAAP | 17.7 % | – | 70 bps |
| Interest expense, three months ended August 31, 2026GAAP | 68.4 | – | – |
| Income tax expense, three months ended August 31, 2026GAAP | $49.9M | – | – |
| Income tax rate, three months ended August 31, 2026GAAP | 32.3 % | – | – |
| Adjusted income tax rate, three months ended August 31, 2026non-GAAP | 22.6 % | – | – |
| Net income attributable to McCormick & Company, three months ended August 31, 2026GAAP | $97.6M | – | (56.7) % |
| Adjusted net income, three months ended August 31, 2026non-GAAP | $231.7M | – | 1.1 % |
| Earnings per share – diluted, three months ended August 31, 2026GAAP | $ 0.36 | – | (57.1) % |
| Adjusted earnings per share – diluted, three months ended August 31, 2026non-GAAP | $ 0.86 | – | 1.2 % |
| Net sales, nine months ended August 31, 2026GAAP | $5.84B | – | 16.9 % |
| Organic net sales growth, nine months ended August 31, 2026non-GAAP | 1.6 % | – | 1.6 % |
| Gross profit, nine months ended August 31, 2026GAAP | $2.28B | – | – |
| Gross profit margin, nine months ended August 31, 2026GAAP | 39.1 % | – | – |
| Adjusted gross profit, nine months ended August 31, 2026non-GAAP | $2.30B | – | – |
| Adjusted gross profit margin, nine months ended August 31, 2026non-GAAP | 39.4 % | – | – |
| Operating income, nine months ended August 31, 2026GAAP | $720.9M | – | – |
| Adjusted operating income, nine months ended August 31, 2026non-GAAP | $962.5M | – | 23.8 % |
| Net income attributable to McCormick & Company, nine months ended August 31, 2026GAAP | $1.26B | – | – |
| Adjusted net income, nine months ended August 31, 2026non-GAAP | $624.5M | – | – |
| Earnings per share – diluted, nine months ended August 31, 2026GAAP | $ 4.69 | – | – |
| Adjusted earnings per share – diluted, nine months ended August 31, 2026non-GAAP | $ 2.32 | – | – |
| Net cash flow provided by operating activities, nine months ended August 31, 2026GAAP | 598.8 | – | – |
| Capital expenditures (including software), nine months ended August 31, 2026GAAP | (131.2) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Consumer, three months ended August 31, 2026Organic sales increased 1%, driven by a 2% increase from price partially offset by a 1% decline in volume and product mix; McCormick de Mexico contributed 23% and currency provided a 1% favorable impact. | $1.22B | – | 25% |
| Flavor Solutions, three months ended August 31, 2026Organic sales increased 3%, driven by a 2% increase in price and a 1% increase in volume and product mix; McCormick de Mexico contributed 4% and currency provided a 1% favorable impact. | $809M | – | 8% |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
Fiscal year 2026 / year ending November 30, 2026 outlook
- RevenueNet sales growth 13% to 17%; 12% to 16% in constant currency
- Gross marginAdjusted gross margin is expected to expand by 100 to 120 basis points from 2025.
- Tax rateapproximately 24.0% vs. 21.5% in 2025
- NoteContribution from acquisition of McCormick de Mexico: 11% to 13%
- NoteOrganic sales growth: 1% to 3%
- NoteAdjusted operating income: 16% to 20%; 15% to 19% in constant currency
- NoteAdjusted earnings per share (EPS): $3.05 to $3.13; 2% to 5%; 1% to 4% in constant currency
- NoteTotal volumes expected to be stable with increased pricing benefits relative to the prior year.
- NoteForeign currency rates are expected to favorably impact net sales by 1%, adjusted operating income by 1%, and adjusted earnings per share by 1%.
Capital returns
- Cash dividends paid per share – voting and non-voting were $ 0.48 for the three months ended August 31, 2026 and $ 1.44 for the nine months ended August 31, 2026.
- Common stock acquired by purchase was (10.9) for the nine months ended August 31, 2026, compared with (29.2) for the nine months ended August 31, 2025.
- Dividends paid were (387.0) for the nine months ended August 31, 2026, compared with (362.2) for the nine months ended August 31, 2025.
- The Company anticipates returning a significant portion of cash flow to shareholders through dividends.
What drove it
- Net sales increased 17.4%, with a 14.6% acquisition impact, a 0.9% favorable foreign-currency impact, and 1.9% organic sales growth.
- Third-quarter gross profit margin expanded 190 basis points, driven by McCormick de Mexico, higher sales and CCI cost savings, partly offset by higher commodity and freight costs.
- Adjusted operating income increased 22.1%; management cited higher gross profit and CCI savings, including SG&A streamlining, partly offset by acquisition-related SG&A, brand marketing and technology investment.
- Consumer adjusted operating income increased 24% to $241 million, while Flavor Solutions adjusted operating income increased 18% to $117 million.
- The January 2, 2026 acquisition of an additional 25% interest in McCormick de Mexico increased ownership to a 75% controlling interest and resulted in consolidation of its financial results.
Concerns
- GAAP operating income declined to $217.0 from $288.7 and GAAP diluted EPS declined to $0.36 from $0.84, reflecting special charges.
- Special charges, including transaction and integration costs and a non-cash impairment charge related to non-core long-lived assets, lowered diluted earnings per share by $0.50.
- Consumer organic growth was 1%, as a 2% price increase was partly offset by a 1% decline in volume and product mix.
- Adjusted EPS growth was partly offset by a higher tax rate and higher interest expense.
- The outlook identifies uncertainty in the consumer and macro environment, including global trade policies and the conflict in the Middle East.
What to watch
- Whether total volumes remain stable as forecast and whether increased pricing benefits support the 1% to 3% organic sales growth outlook.
- Delivery of the expected 100 to 120 basis points of adjusted gross-margin expansion amid inflationary costs, including costs related to the Middle East conflict.
- The effect of higher brand marketing, technology and other growth investment, as well as the build back of incentive compensation, on SG&A.
- Execution of McCormick de Mexico integration and its expected 11% to 13% contribution to fiscal 2026 sales growth.
- Progress toward the expected mid-2027 close of the proposed Unilever Foods combination, including regulatory approvals, financing, integration planning and synergy delivery.
Balance sheet and cash flow
- Cash and cash equivalents were $ 331.1 at August 31, 2026, compared with $ 95.9 at November 30, 2025.
- Short-term borrowings and current portion of long-term debt were $ 2,112.1 at August 31, 2026, compared with $ 890.5 at November 30, 2025.
- Long-term debt was $ 2,906.1 at August 31, 2026, compared with $ 3,105.8 at November 30, 2025.
- Net cash flow provided by operating activities was 598.8 for the nine months ended August 31, 2026, compared with 420.2 for the nine months ended August 31, 2025.
- Net cash flow used in investing activities was (861.1), including acquisition of business, net of cash acquired of (729.9) and capital expenditures (including software) of (131.2).
- Net cash flow provided by financing activities was 490.3, including short-term borrowings, net of 958.8, long-term debt repayments of (506.7), common stock acquired by purchase of (10.9), and dividends paid of (387.0).
Analysis
McCormick reported third-quarter net sales of $ 2,024.8, up 17.4 %, with 1.9 % organic growth. The principal sales contributor was McCormick de Mexico, which added 14.6 % to consolidated reported growth, while foreign currency added 0.9 %. Organic growth was price-led. Consumer organic growth was 1%, with price up 2% and volume and product mix down 1%, while Flavor Solutions delivered 3% organic growth from both price and volume and product mix.
Gross profit increased to $ 794.9 and gross margin reached 39.3 %, an expansion of 190 bps. Management attributed the expansion to the acquisition contribution, higher sales and CCI cost savings, partly offset by higher commodity and freight costs. Adjusted operating income increased 22.1 % to $ 358.5 and adjusted operating margin improved 70 bps to 17.7 %. CCI savings and higher gross profit offset acquisition-related SG&A, brand marketing investment and technology investment.
GAAP earnings were materially affected by special charges. Operating income declined to $ 217.0 from $ 288.7, net income attributable to McCormick & Company declined to $ 97.6 from $ 225.5, and diluted EPS declined to $ 0.36 from $ 0.84. Excluding special charges, adjusted diluted EPS increased to $ 0.86 from $ 0.85. The filing states that special charges, including transaction and integration costs and a non-cash impairment charge related to non-core long-lived assets, reduced diluted EPS by $0.50. Higher tax rate and interest expense partly offset adjusted operating-income growth.
For the nine-month period, operating cash flow increased to 598.8 from 420.2, while cash and cash equivalents were $ 331.1 at August 31, 2026. The balance sheet showed $ 2,112.1 of short-term borrowings and current long-term debt and $ 2,906.1 of long-term debt. McCormick paid (387.0) of dividends and repurchased (10.9) of common stock during the nine months.
Management reaffirmed fiscal 2026 guidance for net sales growth of 13% to 17%, organic sales growth of 1% to 3%, adjusted operating-income growth of 16% to 20%, and adjusted EPS of $3.05 to $3.13. It expects adjusted gross margin to expand by 100 to 120 basis points and total volumes to be stable. The proposed Unilever Foods transaction remains expected to close by mid-2027, subject to customary closing conditions and regulatory approvals; the company says integration planning and regulatory filings are progressing on schedule.
Management, verbatim
Third quarter results demonstrate the resilience and differentiated performance of our flavor-focused business model in a dynamic operating environment. We delivered strong sales growth, including organic growth across our global flavor portfolio, while expanding our profit margins. Disciplined productivity initiatives helped offset rising input and freight costs, supporting margin expansion and enabling continued investment in our brands to drive long-term profitable growth. Overall, performance reflected solid base business contribution and accretion from the McCormick de Mexico acquisition, where we have substantially completed its integration.
Brendan M. Foley, Chairman, President, and CEO
Looking ahead, our enhanced margin profile and operational discipline position us to continue investing in our brands, capabilities, and innovation to support organic sales growth and drive long- term shareholder value creation. Our advantaged categories combined with our strong year-to-date performance, including solid organic growth, margin expansion, and robust cash flow, give us confidence in our ability to deliver on our 2026 outlook.
Brendan M. Foley, Chairman, President, and CEO
We remain confident in the strategic benefits of the proposed combination with Unilever Foods and have made substantial progress on integration planning. We have established the future leadership team and operating model, mobilized cross-functional resources, and developed detailed plans to support business continuity and planned synergy delivery post-close.
Brendan M. Foley, Chairman, President, and CEO
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so no comparison of actual results with prior guidance is available.
- Free cash flow was not reported.
- A repurchase authorization amount or remaining authorization was not reported.
- Quarterly operating cash flow was not reported.
- Quarterly capital expenditures were not reported.
- Segment revenue for the nine months ended August 31, 2026 was not reported.
- GAAP fiscal 2026 guidance was not provided because the company stated it cannot predict certain GAAP items, including special charges and transaction and integration expenses.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.