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1. Company Snapshot

1.a. Company Description

McCormick & Company, Incorporated manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to the food industry.It operates in two segments, Consumer and Flavor Solutions.The Consumer segment offers spices, herbs, and seasonings, as well as condiments and sauces, and desserts.


This segment markets its products under the McCormick, French's, Frank's RedHot, Lawry's Cholula Hot Sauce, Gourmet Garden, Club House, and OLD BAY brands in the Americas; Ducros, Schwartz, Kamis, and Drogheria & Alimentari, and Vahiné brands in Europe, the Middle East, and Africa; McCormick and DaQiao brands in China; and McCormick, Aeroplane, and Gourmet Garden brands in Australia, as well as markets regional and ethnic brands, such as Zatarain's, Stubb's, Thai Kitchen, and Simply Asia.It also supplies its products under the private labels.This segment serves retailers comprising grocery, mass merchandise, warehouse clubs, discount and drug stores, and e-commerce retailers directly and indirectly through distributors and wholesale foodservice suppliers.


The Flavor Solutions segment offers seasoning blends, spices and herbs, condiments, coating systems, and compound flavors to multinational food manufacturers and foodservice customers.It serves foodservice customers directly and indirectly through distributors.The company was founded in 1889 and is headquartered in Hunt Valley, Maryland.

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1.b. Last Insights on MKC

McCormick & Company's recent performance was driven by strong consumer demand, resilient volumes, and steady market share gains. The company's Q4 results showed revenue growth and higher EPS, supported by consumer volume and pricing, despite commodity and tariff pressures. McCormick's dual-engine model, strong brand moat, and strategic expansion in Mexico underpin its ability to weather policy headwinds and drive long-term value. The company's recent earnings release highlighted organic growth improvements in its Consumer and Flavor Solutions segments. Additionally, McCormick's leadership in spices and seasonings, with resilient volumes and strong cash flow, remains a key driver of its success.

1.c. Company Highlights

2. McCormick's 2025 Earnings: A Resilient Performance Amidst Challenges

In 2025, McCormick & Company demonstrated the strength and resilience of its business, achieving 2% total organic sales growth in the fourth quarter, driven by growth in both consumer and flavor solutions segments. For the full year, the company delivered sales growth at the midpoint of its constant currency guidance, driven by positive volume. The consumer segment delivered another year of industry-leading volume-led growth, up 2% for 2025. The company's adjusted gross profit margin declined 120 basis points due to higher commodity costs and tariffs. Adjusted operating income increased 3% in the fourth quarter, and 2% for the fiscal year. The actual EPS came out at $0.86, slightly below estimates at $0.87.

Publication Date: Jan -23

📋 Highlights
  • Organic Sales Growth:: 2025 total organic sales grew 2% (Q4), with consumer segment up 3% (1% volume, 2% pricing) and flavor solutions up 1% (2% pricing, -1% volume).
  • Operating Income Expansion:: Full-year adjusted operating income increased 2%, with Q4 up 3%, despite 120 bps gross margin compression from inflation and tariffs.
  • 2026 Acquisition Impact:: Acquisition of McCormick de Mexico projected to contribute 11-13% top-line growth and 15-19% adjusted operating income growth in constant currency.
  • Dividend & Leverage:: 2025 quarterly dividend increased by 7%, and leverage ratio reduced to below 2.7x, with $483M returned to shareholders.
  • Margin Recovery Outlook:: 2026 gross margin expected to recover from 60 bps compression in 2025, with adjusted EPS guidance of $3.05–$3.13 (1-3% organic sales growth).

Segment Performance

The consumer segment achieved volume growth, driven by pricing actions and elasticities in line with expectations. The flavor solutions segment showed resilience despite soft industry trends, with a 1% rise in organic sales, driven by a 2% price contribution, partially offset by a 1% volume decline. Regionally, McCormick is optimistic about Asia Pacific, with China expected to see gradual growth in 2026. In EMEA, the company expects volume growth with some pricing in its consumer business.

Guidance and Outlook

For 2026, McCormick expects organic net sales growth to range between 1-3%, with sustained volume growth and a higher contribution from pricing. The acquisition of McCormick de Mexico is expected to contribute 11-13% to the top line. The company anticipates full-year gross margin expansion, reflecting recovery from the compression experienced in 2025, and adjusted operating income growth of 15-19% in constant currency. Adjusted earnings per share is projected to range from $3.05 to $3.13.

Valuation and Dividend Yield

With a P/E Ratio of 21.13 and an EV/EBITDA of 15.57, the market seems to have priced in a certain level of growth for McCormick. The company's Dividend Yield stands at 2.99%, indicating a relatively attractive return for income investors. The ROE of 14.1% and ROIC of 7.47% suggest that the company is generating returns on equity and capital employed, respectively.

Tariffs and Cost Pressures

McCormick's gross annualized tariff exposure has fallen from $140 million to $70 million, with $50 million of incremental tariffs expected in 2026. The company booked $70 million in gross tariffs and $20 million in net tariffs in 2025. The company plans to mitigate the impact of tariffs, cost inflation, and other headwinds through productivity savings, alternative sourcing, and revenue management capabilities.

3. NewsRoom

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Nuance Investments LLC Buys New Shares in McCormick & Company, Incorporated $MKC

Feb -09

Source: defenseworld.net

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Financial Contrast: McCormick & Company, Incorporated (NYSE:MKC) and Z-Trim (OTCMKTS:FBER)

Feb -09

Source: defenseworld.net

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Mission Wealth Management LP Sells 8,181 Shares of McCormick & Company, Incorporated $MKC

Feb -06

Source: defenseworld.net

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Top 10 High-Yield Dividend Stocks For February 2026

Feb -03

Source: seekingalpha.com

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McCormick & Company to Present at Consumer Analyst Group of New York Conference

Jan -26

Source: prnewswire.com

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Your Favorite Spices May Get a Bit More Expensive Soon. Here's the Reason Why

Jan -23

Source: investopedia.com

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McCormick: 'Buy' The Dip Opportunity Is Here (Upgrade)

Jan -23

Source: seekingalpha.com

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Why I'm Calling McCormick A Speculative Buy After The Selloff

Jan -23

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Consumer

Expected Growth: 3%

McCormick's 3% consumer segment growth is driven by increasing demand for flavorful and convenient meals, particularly among millennials and Gen Z. The company's strategic acquisitions, such as Frank's RedHot and Cholula, have expanded its portfolio of iconic brands. Additionally, investments in e-commerce and digital marketing have enhanced customer engagement and accessibility.

Flavor Solutions

Expected Growth: 3%

McCormick's Flavor Solutions segment growth is driven by increasing demand for convenient and flavorful meal solutions, expansion in emerging markets, and strategic acquisitions. Additionally, the company's focus on innovation, particularly in clean label and organic products, is resonating with consumers, contributing to the 3% growth rate.

7. Detailed Products

Spices and Seasonings

A wide range of spices, seasonings, and herbs used to add flavor and aroma to various dishes

Flavor Solutions

Customized flavor systems for food manufacturers, restaurants, and foodservice providers

Herbs and Botanicals

Dried and fresh herbs, botanicals, and extracts used in food, beverages, and pharmaceuticals

Meat and Poultry Seasonings

Blended seasonings and marinades for meat, poultry, and seafood

Snack Seasonings

Flavorings and seasonings for snack foods, such as potato chips, crackers, and nuts

Baking Products

Baking spices, flavorings, and ingredients for baked goods and desserts

Flavor Enhancers

Natural and artificial flavor enhancers for food and beverages

8. McCormick & Company, Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for McCormick & Company, Incorporated is medium due to the presence of alternative spice and seasoning products from other companies.

Bargaining Power Of Customers

The bargaining power of customers for McCormick & Company, Incorporated is low due to the company's strong brand recognition and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers for McCormick & Company, Incorporated is medium due to the company's dependence on a few large suppliers for raw materials.

Threat Of New Entrants

The threat of new entrants for McCormick & Company, Incorporated is low due to the high barriers to entry in the spice and seasoning industry.

Intensity Of Rivalry

The intensity of rivalry for McCormick & Company, Incorporated is high due to the presence of several large competitors in the spice and seasoning industry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 47.57%
Debt Cost 5.80%
Equity Weight 52.43%
Equity Cost 7.54%
WACC 6.71%
Leverage 90.72%

11. Quality Control: McCormick & Company, Incorporated passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Lancaster Colony

A-Score: 5.3/10

Value: 3.5

Growth: 5.9

Quality: 7.5

Yield: 4.0

Momentum: 4.5

Volatility: 6.3

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McCormick

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Quality: 6.2

Yield: 5.0

Momentum: 3.5

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Quality: 6.8

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Momentum: 0.5

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Freshpet

A-Score: 3.6/10

Value: 2.6

Growth: 9.1

Quality: 5.5

Yield: 0.0

Momentum: 0.5

Volatility: 3.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

68.96$

Current Price

68.96$

Potential

-0.00%

Expected Cash-Flows