We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
McCormick's Q2 adjusted EPS rose 15.9% to 80 cents as net sales climbed 16.7% to $1.94 billion.
MKC's gross margin expanded 270 basis points on de Mexico gains, tariff refund, pricing and CCI savings.
McCormick still expects fiscal 2026 net sales growth of 13-17% and adjusted EPS of $3.05-$3.13.
McCormick & Company, Incorporated (MKC - Free Report) reported second-quarter fiscal 2026 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.
Adjusted earnings rose 15.9% to 80 cents per share from 69 cents in the year-ago quarter. The metric beats the Zacks Consensus Estimate of 69 cents per share. The increase was driven by elevated adjusted operating income and a reduced adjusted effective tax rate, partially offset by weaker unconsolidated income and increased interest expense.
The global flavor leader generated net sales of $1,936.6 million, up 16.7% year over year, including a 2.7% positive currency impact and a 12% contribution from McCormick de Mexico. The top line beats the consensus mark of $1,899 million. Organic sales edged up 1.7%.
McCormick & Company, Incorporated Price, Consensus and EPS Surprise
The gross margin expanded 270 basis points, driven by contributions from the McCormick de Mexico acquisition, the IEEPA tariff refund, pricing actions and productivity savings generated through the company's Comprehensive Continuous Improvement (“CCI”) program. These benefits were partially offset by higher commodity costs and costs associated with the Middle East conflict.
Adjusted operating income increased to $336 million from $259 million, reflecting a 30% year-over-year rise, including a 3% favorable currency impact. On a constant currency basis, adjusted operating income grew 27%, supported by elevated gross profit and CCI-driven cost savings, including SG&A efficiencies. These gains were partially offset by higher SG&A expenses, primarily due to acquisition-related costs, elevated brand marketing investments and technology spending.
Decoding MKC’s Segmental Performance
Consumer: The segment’s sales surged 23% year over year to $1,143 million, supported by a 20% contribution from McCormick de Mexico and a 2% positive currency impact. Organic sales rose 1%, as a 3% increase in pricing more than offset a 2% decline in volume and mix. Adjusted operating income rose 33% year over year to $217 million or 31% in constant currency, driven by elevated gross profit, partially offset by higher SG&A investments in marketing and technology.
Flavor Solutions: Sales grew 9% year over year to $794 million, including a 3% favorable currency impact and a 3% contribution from McCormick de Mexico. Organic sales in the segment edged up 3%, driven by pricing, volume and product mix. Adjusted operating income increased 26% to $120 million or 22% in constant currency, supported by elevated gross profit but partly offset by higher SG&A expenses, including continued investments in technology.
MKC’s Financial Health Snapshot
McCormick ended the quarter with cash and cash equivalents of $331.2 million, long-term debt of $3,597.4 million and total shareholders’ equity of $7,573.3 million.
In the six months ended May 31, 2026, net cash provided by operating activities was $430.7 million. The company continues to expect robust cash generation for fiscal 2026, supported by profit and working capital initiatives, and aims to return a significant portion to its shareholders via dividends.
What to Expect From MKC in Fiscal 2026?
The company still expects net sales growth of 13-17% (while 12-16% in constant currency) in fiscal 2026, including an 11-13% contribution from the McCormick de Mexico acquisition in both reported and constant currency terms. Organic sales are projected to increase 1-3% on a constant currency basis.
Adjusted gross margin is expected to expand 100-120 basis points, with favorable impacts from organic sales growth, accretion from the McCormick de Mexico acquisition, and productivity gains from the company's CCI program. The benefit from the IEEPA tariff refund is expected to be largely offset by higher inflationary pressures, including costs related to the Middle East conflict, as well as ongoing investments to support growth initiatives.
Adjusted operating income is projected to rise 16-20% (up 15-19% at constant currency).
The company expects adjusted EPS between $3.05 and $3.13, indicating 2-5% year-over-year growth and a 1-4% rise at constant currency.
This Zacks Rank #4 (Sell) company has lost 9.8% in the past three months compared with the industry’s decline of 1.6%.
Image Source: Zacks Investment Research
Stocks to Consider
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. At present, CHEF sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 8.3% and 24.7%, respectively, from the year-ago reported figures. Chefs' Warehouse delivered a trailing four-quarter earnings surprise of 28.9%, on average.
Darling Ingredients Inc. (DAR - Free Report) develops, produces and sells sustainable natural ingredients from edible and inedible bio-nutrients. It currently flaunts a Zacks Rank #1. Darling Ingredients delivered a trailing four-quarter earnings surprise of 16.1%, on average.
The Zacks Consensus Estimate for Darling Ingredients’ current fiscal-year sales and earnings indicates growth of 12.3% and 588.2%, respectively, from the prior-year reported levels.
Mama's Creations, Inc. (MAMA - Free Report) manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA holds a Zacks Rank of 2 (Buy). Mama's Creations delivered a trailing four-quarter earnings surprise of 129.2%, on average.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 30% and 73.3%, respectively, from the year-ago figures.
View the Zacks #1 Rank List
Image: Bigstock
McCormick Q2 Earnings Beat Estimates, Organic Sales Grow
Key Takeaways
McCormick & Company, Incorporated (MKC - Free Report) reported second-quarter fiscal 2026 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.
Adjusted earnings rose 15.9% to 80 cents per share from 69 cents in the year-ago quarter. The metric beats the Zacks Consensus Estimate of 69 cents per share. The increase was driven by elevated adjusted operating income and a reduced adjusted effective tax rate, partially offset by weaker unconsolidated income and increased interest expense.
The global flavor leader generated net sales of $1,936.6 million, up 16.7% year over year, including a 2.7% positive currency impact and a 12% contribution from McCormick de Mexico. The top line beats the consensus mark of $1,899 million. Organic sales edged up 1.7%.
McCormick & Company, Incorporated Price, Consensus and EPS Surprise
McCormick & Company, Incorporated price-consensus-eps-surprise-chart | McCormick & Company, Incorporated Quote
MKC’s Quarterly Performance: Key Metrics & Insights
The gross margin expanded 270 basis points, driven by contributions from the McCormick de Mexico acquisition, the IEEPA tariff refund, pricing actions and productivity savings generated through the company's Comprehensive Continuous Improvement (“CCI”) program. These benefits were partially offset by higher commodity costs and costs associated with the Middle East conflict.
Adjusted operating income increased to $336 million from $259 million, reflecting a 30% year-over-year rise, including a 3% favorable currency impact. On a constant currency basis, adjusted operating income grew 27%, supported by elevated gross profit and CCI-driven cost savings, including SG&A efficiencies. These gains were partially offset by higher SG&A expenses, primarily due to acquisition-related costs, elevated brand marketing investments and technology spending.
Decoding MKC’s Segmental Performance
Consumer: The segment’s sales surged 23% year over year to $1,143 million, supported by a 20% contribution from McCormick de Mexico and a 2% positive currency impact. Organic sales rose 1%, as a 3% increase in pricing more than offset a 2% decline in volume and mix. Adjusted operating income rose 33% year over year to $217 million or 31% in constant currency, driven by elevated gross profit, partially offset by higher SG&A investments in marketing and technology.
Flavor Solutions: Sales grew 9% year over year to $794 million, including a 3% favorable currency impact and a 3% contribution from McCormick de Mexico. Organic sales in the segment edged up 3%, driven by pricing, volume and product mix. Adjusted operating income increased 26% to $120 million or 22% in constant currency, supported by elevated gross profit but partly offset by higher SG&A expenses, including continued investments in technology.
MKC’s Financial Health Snapshot
McCormick ended the quarter with cash and cash equivalents of $331.2 million, long-term debt of $3,597.4 million and total shareholders’ equity of $7,573.3 million.
In the six months ended May 31, 2026, net cash provided by operating activities was $430.7 million. The company continues to expect robust cash generation for fiscal 2026, supported by profit and working capital initiatives, and aims to return a significant portion to its shareholders via dividends.
What to Expect From MKC in Fiscal 2026?
The company still expects net sales growth of 13-17% (while 12-16% in constant currency) in fiscal 2026, including an 11-13% contribution from the McCormick de Mexico acquisition in both reported and constant currency terms. Organic sales are projected to increase 1-3% on a constant currency basis.
Adjusted gross margin is expected to expand 100-120 basis points, with favorable impacts from organic sales growth, accretion from the McCormick de Mexico acquisition, and productivity gains from the company's CCI program. The benefit from the IEEPA tariff refund is expected to be largely offset by higher inflationary pressures, including costs related to the Middle East conflict, as well as ongoing investments to support growth initiatives.
Adjusted operating income is projected to rise 16-20% (up 15-19% at constant currency).
The company expects adjusted EPS between $3.05 and $3.13, indicating 2-5% year-over-year growth and a 1-4% rise at constant currency.
This Zacks Rank #4 (Sell) company has lost 9.8% in the past three months compared with the industry’s decline of 1.6%.
Image Source: Zacks Investment Research
Stocks to Consider
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. At present, CHEF sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 8.3% and 24.7%, respectively, from the year-ago reported figures. Chefs' Warehouse delivered a trailing four-quarter earnings surprise of 28.9%, on average.
Darling Ingredients Inc. (DAR - Free Report) develops, produces and sells sustainable natural ingredients from edible and inedible bio-nutrients. It currently flaunts a Zacks Rank #1. Darling Ingredients delivered a trailing four-quarter earnings surprise of 16.1%, on average.
The Zacks Consensus Estimate for Darling Ingredients’ current fiscal-year sales and earnings indicates growth of 12.3% and 588.2%, respectively, from the prior-year reported levels.
Mama's Creations, Inc. (MAMA - Free Report) manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA holds a Zacks Rank of 2 (Buy). Mama's Creations delivered a trailing four-quarter earnings surprise of 129.2%, on average.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 30% and 73.3%, respectively, from the year-ago figures.