McCormick reported Q4 FY2025 organic sales growth of 2% and adjusted EPS of $0.86, in line with prior expectations. For FY2026, management guided 1-3% organic sales growth and adjusted EPS of $3.05-$3.13, reflecting volume-led growth and margin recovery despite headwinds from tariffs, inflation, and increased ERP and incentive compensation costs. The call highlighted tariff reduction by ~50% (to $70M annualized) but net year-over-year impact of $50M, mostly offset by mitigation. Management expects volume elasticity early in the year, then improvement. Cross-company signal was minimal; the only specific mention was of Grupo Herdez in the context of the minority interest elimination. Q4 FY2025: total organic sales +2%, consumer +3% (Americas vol+1%, price+2%), flavor solutions +1% (price+2%, vol -1%).
McCormick reported Q4 FY2025 organic sales growth of 2% and adjusted EPS of $0.86, in line with prior expectations. For FY2026, management guided 1-3% organic sales growth and adjusted EPS of $3.05-$3.13, reflecting volume-led growth and margin recovery despite headwinds from tariffs, inflation, and increased ERP and incentive compensation costs. The call highlighted tariff reduction by ~50% (to $70M annualized) but net year-over-year impact of $50M, mostly offset by mitigation. Management expects volume elasticity early in the year, then improvement. Cross-company signal was minimal; the only specific mention was of Grupo Herdez in the context of the minority interest elimination. Q4 FY2025: total organic sales +2%, consumer +3% (Americas vol+1%, price+2%), flavor solutions +1% (price+2%, vol -1%).
Management projects continued volume growth and margin recovery despite acknowledging ongoing inflation, tariff headwinds, and consumer uncertainty.
Reported gross margin was 38.93%, reinforcing the quarter's better-than-guided profitability.
Q4 adjusted gross margin -120bp due to higher commodity costs and tariffs, partially offset by CCI savings.
FY2026 guidance: organic sales +1-3%, total constant currency sales +12-16% (incl. Mexico acquisition), adj. operating income +15-19% constant currency, adj. EPS $3.05-$3.13.
Volume growth continues, driven by brand investment and innovation. Management projects continued volume growth and margin recovery despite acknowledging ongoing inflation, tariff headwinds, and consumer uncertainty.
Capital expenditures in 2025 were $222 million, slightly below plans due to phasing, funding capacity increases, digital transformation, and cost optimization. For 2026, management expects increased digital investments, notably the ERP implementation, and continues to invest in supply chain capabilities and growth platforms.
Management projects continued volume growth and margin recovery despite acknowledging ongoing inflation, tariff headwinds, and consumer uncertainty.
“we decided to consolidate the number of waves within the upcoming deployment phase, which moves forward our timeline… shifts more expense into 2026 than originally planned.”
“the incremental year-over-year cost impact of tariffs to be approximately $50 million in 2026. We plan to mitigate the vast majority of this impact with productivity savings.”
“we do expect an impact from elasticity in the first quarter… I wouldn't be surprised if we see volumes either flat to slightly negative in Q1”
| 지표 | 기간 | 범위 | 중간값 | 상태 |
|---|---|---|---|---|
| EPS | FY2026 | $3.05–$3.13 | $3.09 | INITIATED |
| Revenue | FY2026 | 1%–3% | 2% | INITIATED |
McCormick's acquisition of controlling interest eliminates Grupo Herdez's 25% stake in McCormick de Mexico, reducing Grupo Herdez's reported income going forward.
“the elimination of the minority interest, or 25% of McCormick de Mexico net income attributable to Grupo Herdez”
… to Mexico. As a result, our adjusted operating income is expected to grow 15% to 19% in constant currency. In terms of tax, we expect our adjusted effective tax rate to be approximately 24% for 2026 compared to 22% in 2025, where we benefited from a number of discrete tax items They are not expected to repeat in 2026, in addition to a higher tax rate in Mexico. Notably, we now expect an expense from unconsolidated operations in 2026, which reflects the elimination of the minority interest, or 25% of McCormick de Mexico net income attributable to Grupo Herdez, from our consolidated earnings. In addition, we expect net interest expense to increase compared to 2025, primarily due to the funding of the McCormick in Mexico transaction. Our 2026 adjusted earnings per share is projected to range from $3.05 to $3.13 on a reported dollar basis, reflecting benefits from operating income offset by unconsolidated expense, the impact of the increased tax rates relative to the prior year, and higher interest expense. Overall, we believe our outlook is balanced. and give us flexibility to continue to invest in the business while expanding margins. Moving to slide 19, this slide summarizes …