McCormick Reaffirms 2026 Outlook After Mexico-Driven Quarter
Net sales rose 17.4% in the third quarter, with organic growth of 1.9% and adjusted earnings of $0.86 a share.
McCormick & Company (MKC) reported net sales growth of 17.4% in the third quarter ended August 31, 2026, a step-up from 16.7% in both the first and second quarters. Organic sales growth was 1.9%, after 1.7% in the second quarter and 1.2% in the first.
The reported increase included a 0.9% favorable currency impact and a 14.6% contribution from the acquisition of a controlling interest in McCormick de Mexico, which closed on January 2, 2026. Organic growth came from a 2.2% price increase, offset by a 0.3% decline in volume and mix.
Consumer net sales rose 24.9% to $1,215 million, including a 23% contribution from McCormick de Mexico. Organic Consumer sales increased 1.1%. Flavor Solutions net sales increased 7.7% to $809 million, including a 3.4% acquisition contribution. Organic Flavor Solutions sales rose 3.0%.
Americas Consumer sales rose 31.7%, with organic growth of (0.3)% on a 2.2% price increase and a 2.5% volume/mix decline. EMEA Consumer organic sales rose 5.0% and APAC Consumer organic sales rose 4.4%. Flavor Solutions organic sales rose 2.7% in the Americas, 1.2% in EMEA and 8.3% in APAC.
Gross profit was $794.9 million. Gross profit margin expanded 190 basis points versus the year-ago quarter to 39.3%; adjusted gross profit margin expanded 180 basis points. The expansion was driven by contribution from the McCormick de Mexico acquisition, higher sales, and cost savings led by its Comprehensive Continuous Improvement program, partially offset by higher commodity and freight costs.
Operating income was $217 million compared with $289 million a year earlier. Adjusted operating income was $359 million, up 22% from $294 million, or 21% in constant currency. Adjusted operating income margin was 17.7%. Consumer adjusted operating income increased 24% to $241 million. Flavor Solutions adjusted operating income increased 18% to $117 million, or 16% in constant currency.
Diluted earnings were $0.36 a share versus $0.84 a year earlier. Special charges, including transaction and integration costs and a non-cash impairment of about $43.1 million related to a decision to cease operations of a development-stage pepper sourcing project in Malaysia, plus $1.8 million of exit costs, lowered diluted earnings per share by $0.50. Adjusted earnings per share was $0.86 versus $0.85.
Chairman, President, and CEO Brendan M. Foley said third-quarter results demonstrated the resilience of the flavor-focused model, with organic growth across the global flavor portfolio and margin expansion. He said disciplined productivity initiatives helped offset rising input and freight costs and that the company had substantially completed integration of McCormick de Mexico.
McCormick reaffirmed its fiscal 2026 outlook: net sales growth of 13% to 17%, or 12% to 16% in constant currency, with an 11% to 13% contribution from McCormick de Mexico and organic sales growth of 1% to 3%. Adjusted operating income is guided to rise 16% to 20%. Adjusted earnings per share are guided at $3.05 to $3.13. The company expects total volumes to be stable with increased pricing benefits relative to the prior year, and adjusted gross margin is expected to expand by 100 to 120 basis points from 2025.
McCormick remains on track with integration planning for the proposed combination with Unilever Foods, excluding India and other excluded businesses. The combined company is expected to have approximately $20 billion in fiscal year 2025 revenue. McCormick expects approximately $600 million of annual run-rate cost synergies, net of growth reinvestments and potential dis-synergies, with about two-thirds expected by Year 2 post-close, and about $100 million of incremental cost and revenue synergies to be reinvested. The transaction is expected to close by mid-2027, subject to customary closing conditions and regulatory approvals.