MKC · Q4 2025 Earnings

Cautious

McCormick & Company

Reported January 22, 2026

30-second summary

30-second take: Q4 revenue grew 2.9% to $1.85B with organic sales growth of just 2.0%, and FY2025 adjusted EPS landed at $3.00 — below the original $3.03–$3.08 guide management set at the start of the year. FY2025 also missed on constant-currency operating income (+2.8% vs. 4–6% guide) and constant-currency adjusted EPS (+1.7% vs. 5–7% guide). The FY2026 setup is dominated by the McCormick de Mexico acquisition, which alone contributes 11–13 points of the 13–17% reported sales growth guide, leaving the organic algorithm essentially unchanged at 1–3%. Constant-currency adjusted EPS growth of just 1–4% for FY2026 is the tell: the acquisition adds revenue and operating income (+15–19% cc) but EPS accretion is thin, with management citing a ~250bps tax rate increase (21.5% → 24%), higher interest expense from acquisition financing, and elimination of the 25% minority interest in McCormick de Mexico's net income attributable to Grupo Herdez.

Headline numbers

EPS

Q4 FY2025

$0.86

Revenue

Q4 FY2025

$1.85B

+2.9% YoY

Gross margin

Q4 FY2025

38.9%

Operating margin

Q4 FY2025

16.8%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY
Revenue	$1.85B	+2.9%
EPS	$0.86	—
Gross margin	38.9%	—
Operating margin	16.8%	—

Guidance

McCormick raised FY2025 EPS guidance and dramatically increased adjusted operating income growth expectations (15-19% constant currency vs. prior

Guidance is issued for both next quarter and the full year. Both may appear below.

New guidance

Metric	Period	Guide	YoY
Net Sales Growth	FY2025	13% to 17% reported; 12% to 16% constant currency	—
Contribution from McCormick de Mexico Acquisition	FY2025	11% to 13%	—
Adjusted EPS Growth (Constant Currency)	FY2026	1% to 4% constant currency	—
Net Sales Growth (FY2026)	FY2026	13% to 17% reported; 12% to 16% constant currency	—
Operating Margin Expansion	FY2026	Adjusted gross margin expansion qualitatively stated; Adjusted operating income growth 16%-20% reported, 15%-19% constant currency	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EPS	FY2025	$3.03 to $3.08	$3.05 to $3.13	Midpoint raised from $3.055 to $3.09 (+$0.035 or +1.1%); range widened at top end	Raised
Adjusted Operating Income Growth	FY2025	4% to 6% (constant currency)	16% to 20% reported; 15% to 19% constant currency	Significantly raised: constant currency range raised from 4%-6% to 15%-19% (midpoint +10-11 pts); reported basis now 16%-20%	Raised
Adjusted EPS Growth	FY2025	5% to 7% (constant currency)	2% to 5% reported; 1% to 4% constant currency	Significantly lowered: constant currency range reduced from 5%-7% to 1%-4% (midpoint -3 to -4 pts); reported basis 2%-5%	Lowered
Gross Margin Expansion vs. 2024	FY2025	50 to 100 basis points	Withdrawn — no replacement	—	Withdrawn
Brand Marketing Spend Increase	FY2025	high single digits	Withdrawn — no replacement	—	Withdrawn

Reaffirmed unchanged this quarter: Organic Sales Growth (1% to 3%)

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
Consumer	$1.127B	+3.9%
Flavor Solutions	$0.723B	+1.4%

Platform metrics

Q4 FY2025

Segment	Q4 FY2025
Organic Sales Growth (Q4)	2.0%
Consumer Segment Organic Growth (Q4)	3.0%
Flavor Solutions Segment Organic Growth (Q4)	1.0%

Profitability

Q4 FY2025

Segment	Q4 FY2025
Consumer Segment Operating Income	$231M
Flavor Solutions Segment Operating Income	$86M
Adjusted Operating Income Margin	17.1%
Operating Cash Flow (FY2025)	$962M

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
Dividend Increase	7% increase (40th consecutive year)

Management tone

No transcript was available for this print; tone analysis is limited to what the press release and guidance changes disclose.

The most consequential non-verbal tone signal is the silent disappearance of the explicit gross-margin expansion target. In Q1, management committed publicly to +50 to +100 bps of FY2025 gross-margin expansion vs 2024. FY2025 actual gross margin contracted 60 bps to 37.9%, and the FY2026 outlook replaces the explicit bps target with the softer phrase "adjusted gross margin expansion to reflect recovery from 2025." Dropping a specific quantitative anchor after missing it is the corporate equivalent of conceding the framework didn't hold.

A second signal: brand marketing spend guidance is not re-quantified for FY2026. The Q1 commitment was "up high single digits" for FY2025; the FY2026 outlook does not repeat a specific figure. Whether this reflects strategic deprioritization or simply less granular forward disclosure is unclear without a transcript.

Third, the explicit acknowledgment of below-the-line headwinds in the FY2026 EPS bridge — a 250bps tax rate step-up, higher interest expense, and elimination of the McCormick de Mexico minority interest income — is a clear signal that even with double-digit operating income growth from the acquisition, FY2026 EPS growth is capped at 1–4% constant currency. Reaffirming the dividend (40th consecutive year of increases) reads as a deliberate counterweight signal to shareholders against an otherwise mixed print.

Answers to last quarter's watch list

Consumer segment operating profit recovery. Resolved mixed — Consumer Q4 adjusted operating income grew just 1% to $231M, and FY adjusted operating income for the segment declined 0.6% constant currency. The Q4 print is directionally positive but the full year shows the segment's profit recovery did not materialize as hoped; Flavor Solutions (+10.7% cc op income for the year) carried the FY segment profit story. Status: Resolved mixed.

Gross margin build cadence. Resolved negatively — FY2025 gross margin contracted 60 bps to 37.9% (Q4: 38.9%, also down 130 bps YoY) against a guide of +50 to +100 bps expansion. The FY2026 outlook now references qualitative "recovery from 2025" rather than a quantitative band, downgrading transparency on this lever. Status: Resolved negatively.

Flavor Solutions Americas large-customer trajectory. Continue monitoring — Americas Flavor Solutions grew +2.1% reported / +1.5% organic in Q4 and EMEA Flavor Solutions remained negative at -1.1% reported / -3.1% organic, suggesting large-CPG customer softness persisted regionally. With no transcript, the reformulation/innovation contribution cannot be quantified this quarter. Status: Continue monitoring.

Tariff scope expansion. Not resolved — the press release flags tariffs as a margin headwind in 2025 and references continued global trade headwinds for 2026, but does not disclose how the FY2026 guide treats incremental tariff scenarios beyond the baseline. Status: Not resolved.

China consumer trajectory. Resolved negatively — APAC Consumer organic growth was just +1.8% in Q4 and +1.9% for the full year. The "slight improvement" FY framing from Q1 played out as marginal, with no inflection visible. Status: Resolved negatively.

What to watch into next quarter

McCormick de Mexico accretion mechanics. FY2026 guides 11–13 points of inorganic sales contribution and 15–19% cc operating income growth but only 1–4% cc EPS growth. Management has named the three drivers of the gap (tax rate 21.5% → 24%, higher interest expense, minority interest elimination). Watch Q1 FY2026 for the explicit dollar quantification of each so the permanent vs. transitory split is clear.

Organic algorithm credibility. FY2026 organic sales growth of 1–3% is the same range as FY2025 — and FY2025 came in at +1.9%, in the middle of the band but with Flavor Solutions decelerating through the year. Watch whether Q1 FY2026 organic delivers above 1% and whether Flavor Solutions stabilizes.

Gross margin re-disclosure. Management dropped the explicit gross-margin expansion target after missing the FY2025 +50–100 bps guide. Watch whether Q1 FY2026 reintroduces a quantified expansion band — a return to specific bps guidance would signal confidence; continued qualitative language would extend the credibility issue.

Flavor Solutions EMEA inflection. EMEA Flavor Solutions organic sales were –4.3% for the full year and –3.1% in Q4 — the most negative line in the disclosure. Watch for any segment-level inflection here as a leading indicator of large-CPG customer health.

Brand marketing spend disclosure. With the high-single-digit FY2025 commitment not repeated in the FY2026 outlook, watch whether McCormick discloses a specific spend trajectory — silence on this line would imply further deprioritization of brand investment in a year where management is emphasizing operating leverage.

Sources

McCormick & Company Q4 and FY2025 earnings press release, filed via SEC EDGAR: https://www.sec.gov/Archives/edgar/data/63754/000006375426000035/mccormickreportsstrong20.htm
Tapebrief Q1 FY2025 brief on MKC (prior coverage, watch-list source).

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.