McCormick affirms FY26 sales growth of 13-17% and adjusted EPS of $3.05-$3.13
McCormick & Company reported Q2 net sales of $1,936.6 million, up 16.7%, and adjusted EPS of $0.80. The company reaffirmed its FY26 outlook, projecting 13-17% sales growth and adjusted EPS of $3.05-$3.13, supported by the McCormick de Mexico acquisition and CCI program.
*this image is generated using AI for illustrative purposes only.
McCormick & Company, Incorporated reported financial results for the second quarter ended May 31, 2026, and reaffirmed its fiscal 2026 outlook. Net sales increased 16.7% to $1,936.6 million, driven by a 2.7% favorable impact from currency and acquisition contributions, while organic sales growth was 1.7%. Adjusted earnings per share rose to $0.80 from $0.69 in the prior year. The company continues to prioritize investments in key categories to sustain volume trends and drive long-term profitable growth, acknowledging uncertainties in the consumer and macro environment, including global trade policies and the Middle East conflict.
Second Quarter Performance
Gross profit for the quarter increased by $155 million to $778.2 million, with gross profit margin expanding 270 basis points to 40.2%. This expansion was supported by the McCormick de Mexico acquisition, pricing actions, and cost savings initiatives, partially offset by higher commodity costs. Operating income was $276.4 million, up from $246 million in the year-ago period. Excluding special charges, adjusted operating income increased 30% to $336.4 million.
Segment Results
Consumer segment net sales increased 22.8% to $1,143 million, with organic sales up 0.8%. Flavor Solutions segment net sales increased 8.9% to $794 million, with organic sales growth of 2.9%. Both segments benefited from accelerated momentum in Flavor Solutions and gains across Flavors and Branded Foodservice customers.
Fiscal 2026 Outlook
McCormick reaffirmed its fiscal 2026 outlook, projecting net sales growth of 13% to 17% and adjusted earnings per share of $3.05 to $3.13. The company expects foreign currency to favorably impact net sales, adjusted operating income, and adjusted earnings per share by approximately 1%. The outlook includes meaningful contributions from the McCormick de Mexico acquisition, which closed on January 2, 2026.
| Metric | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Net Sales | $1,936.6 million | $1,659.5 million | 16.7% |
| Adjusted EPS | $0.80 | $0.69 | 15.9% |
| Operating Income | $276.4 million | $245.8 million | 12.4% |
| Adjusted Operating Income | $336.4 million | $258.6 million | 30.1% |
Outlook Expectations
Adjusted gross margin is expected to expand by 100 to 120 basis points from 2025, driven by organic sales growth, McCormick de Mexico accretion, and the company's Comprehensive Continuous Improvement (CCI) program. The benefit of the IEEPA tariff refund will be offset by increased inflationary costs, including those related to the Middle East conflict, and continued investments in business growth. SG&A expenses are impacted by cost headwinds such as digital transformation and incentive compensation build-back, alongside growth investments and streamlining initiatives.
Adjusted earnings per share growth is partially offset by a tax rate of approximately 24.0% compared to 21.5% in 2025, higher net interest expense primarily associated with the McCormick de Mexico transaction, and the elimination of the 25% minority interest in McCormick de Mexico Net Income attributable to Grupo Herdez following the consolidation of its financial results.
How will the company balance the expected rise in inflationary costs with its goal to sustain volume trends in the second half of the fiscal year?
What specific strategies are being employed to accelerate organic sales growth beyond the current 1.7% rate?
How will the integration of McCormick de Mexico impact long-term profitability once the initial acquisition benefits and tariff refunds normalize?
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