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Mccormick & Company Inc. (MKC)
NYSE:MKC
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McCormick & Company
(NYSE:MKC)
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Select Model
Rating:65Neutral
Price Target:
$74.00
▲(8.03% Upside)
Action:ReiteratedDate:01/23/26
The score is driven mainly by solid underlying financial quality (stable profitability, improved leverage, and stronger 2025 cash generation) and generally constructive 2026 guidance with mitigation plans for cost pressures. These positives are tempered by notably weak price momentum/technical trend signals and a valuation that is only moderately attractive despite the supportive dividend yield.
Positive Factors
Deleveraging
Meaningful deleveraging reduces balance-sheet risk and interest burden, improving financial flexibility to invest, return capital, or absorb shocks. A lower leverage baseline supports M&A and dividend policy durability, making the firm more resilient to cost shocks over the next several quarters.
Strong cash generation
Consistent operating cash flow and a strong 2025 free-cash-flow rebound support sustainable capital allocation: dividends, targeted M&A and capex. Reliable cash conversion in 2025 boosts flexibility to fund strategic initiatives and service debt despite episodic working-capital swings.
Strategic M&A adds scale
Securing majority control in Mexico materially increases scale, expands Latin America presence and accelerates revenue diversification. The deal is positioned to be accretive and strengthen flavor solutions leadership, offering a durable growth platform beyond organic category expansion.
Negative Factors
Margin compression
Material margin erosion from higher commodity costs, tariffs and capacity/support costs threatens sustainable profitability. Even with mitigation plans, persistent inflation and tariff exposure can erode margins multi-quarter, pressuring operating income and cash conversion unless offset by productivity or pricing.
Modest organic growth
Historical revenue expansion has been modest and management guides 1–3% organic growth absent M&A. Limited secular growth in core packaged-spices categories means the company relies on acquisitions and share gains for step-change growth, constraining long-term operating leverage and scale benefits.
Free-cash-flow volatility
Intermittent FCF swings indicate working-capital and reinvestment variability that complicates forecasting and consistent deleveraging. While 2025 rebounded strongly, recurring volatility limits predictability for buybacks, M&A funding and steady debt reduction absent structural working-capital improvements.
McCormick & Company (MKC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.80B
Dividend Yield2.61%
Average Volume (3M)4.33M
Price to Earnings (P/E)23.9
Beta (1Y)0.17
Revenue Growth1.64%
EPS Growth-1.83%
CountryUS
Employees14,100
SectorConsumer Defensive
Sector Strength42
IndustryPackaged Foods
Share Statistics
EPS (TTM)0.86
Shares Outstanding253,586,520
10 Day Avg. Volume3,208,429
30 Day Avg. Volume4,334,504
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)3.11
Price to Sales (P/S)2.61
P/FCF Ratio24.09
Enterprise Value/Market Cap1.19
Enterprise Value/Revenue3.26
Enterprise Value/Gross Profit8.60
Enterprise Value/Ebitda17.40
Forecast
1Y Price Target
$73.11Price Target Upside6.73% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)3.1
Revenue Forecast (FY)$7.85B
McCormick & Company Business Overview & Revenue Model
Company DescriptionMcCormick & 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.
How the Company Makes MoneyMcCormick & Company generates revenue through multiple streams, primarily from the sale of its spices, seasoning blends, and flavor solutions. The Consumer segment earns money by marketing and selling branded products directly to consumers through retail channels, while the Flavor Solutions segment focuses on providing tailored flavoring solutions to food manufacturers and restaurants. The company benefits from strong brand recognition, with popular products like McCormick, Lawry's, and Zatarain's. Additionally, McCormick has established partnerships with various food manufacturers and distributors, which help to expand its market reach. Factors contributing to its earnings include innovative product development, strategic acquisitions, and an increasing trend towards home cooking and flavor enhancement in food preparation.
McCormick & Company Key Performance Indicators (KPIs)
Any
Net Sales by Geography
Reveals revenue distribution across various regions, indicating where the company is thriving and where it might face challenges or opportunities due to regional market dynamics.
Reveals revenue distribution across various regions, indicating where the company is thriving and where it might face challenges or opportunities due to regional market dynamics.
Data provided by:
The Fly
The FlyMcCormick & Company Earnings Call Summary
Earnings Call Date:Jan 22, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Mar 31, 2026
Earnings Call Sentiment Positive
The call highlights solid top-line momentum driven by consistent consumer volume growth, flavor solutions margin improvement, strong cash generation, deleveraging, dividend growth, reduced tariff exposure and an accretive M&A contribution for 2026. However, significant near-term margin pressure from higher-than-expected commodity inflation and tariffs, ERP timing-driven expenses, higher tax and interest costs, and softness in parts of flavor solutions temper near-term profitability. Management provided mitigation plans (CCI, sourcing, targeted pricing) and a 2026 outlook that assumes margin recovery and operating income growth, indicating confidence in long-term targets.Q4-2025 Updates
Positive Updates
Overall Organic Sales Growth (Q4 & FY)
Total organic sales increased 2% in Q4 2025. For fiscal 2025 the company delivered sales growth at the midpoint of constant-currency guidance, driven by positive volume (consumer segment volume-led growth of 2% for the year). 2026 organic net sales guidance is 1-3% (before M&A contribution).
Consumer Segment Volume Momentum
Consumer organic sales grew 3% in Q4 (driven by price and volume). Consumer volumes have grown for seven consecutive quarters and consumer segment volume-led growth was +2% for fiscal 2025. Americas consumer organic sales +3% in Q4 (1% volume, 2% price); EMEA consumer +3% (1% volume, 2% price); Asia Pacific consumer +2% (primarily volume).
Flavor Solutions Profitability Improvement
Flavor solutions adjusted operating income grew 7% in Q4 (6% constant currency) and grew 9% for the full year (11% constant currency), with operating margin expansion of 90 basis points for fiscal 2025, reflecting progress on margin improvement despite soft customer volumes.
Earnings Per Share and Operating Income
Fourth quarter adjusted EPS was $0.86, up 7% year-over-year. Full-year adjusted EPS was $3.00, up 2% year-over-year. Fourth quarter adjusted operating income increased 3% (2% cc), and fiscal 2025 adjusted operating income grew 2% (3% cc) with a ~10 basis point expansion in adjusted operating margin for the year.
Strong Cash Flow, Capital Allocation, and Deleveraging
Generated $962 million of cash from operations in fiscal 2025, returned $483 million to shareholders via dividends, used $122 million for capex, and reduced leverage to below 2.7x, supporting ongoing investment and shareholder returns (board authorized a 7% quarterly dividend increase).
M&A Strength and Revenue Contribution Outlook
Acquired a controlling interest in McCormick de Mexico (Pacoemer de Mexico) strengthening global flavor leadership; management expects the acquisition to contribute 11-13% to 2026 top line, driving total constant-currency sales growth of 12-16% including the transaction.
Tariff Exposure Reduction
Total gross annualized tariff exposure reduced to approximately $70 million (from $140 million previously), with management expecting the incremental year-over-year tariff cost impact to be ~$50 million in 2026 and a plan to mitigate most of it through productivity and sourcing initiatives.
Brand & Distribution Momentum
Continued share gains across core categories (held or improved share for six quarters), strong performance in spices & seasonings and hot sauce (unit share gains for four consecutive quarters), successful McCormick Gourmet renovation (velocities exceeded expectations), and expansion into high-growth channels like e-commerce and social commerce.
Negative Updates
Gross Margin Compression
Adjusted gross profit margin declined 120 basis points in Q4 2025 (driven by higher commodity costs, tariffs, and capacity/support costs) and fell 60 basis points for the full year 2025. Management expects to recover the margin compression in 2026 but acknowledged higher-than-expected tariff and commodity inflation in Q4.
Inflation and Tariff Cost Pressure
Exited the year with mid-single-digit inflation impacting the P&L (broad basket of commodities, packaging and tariffs). Despite tariff exposure reduction, incremental tariff impact is expected to be ~$50 million in 2026 and management expects a mid-single-digit increase in cost inflation to partially offset margin recovery.
Near-Term Profitability Headwinds and Below-the-Line Items
2026 EPS growth is reduced by elimination of the 25% minority interest in McCormick de Mexico net income (Grupo Herdes) and several below-the-line items unfavorable to 2025, including a higher tax rate (expected ~24% in 2026 vs 21.5% in 2025) and increased interest expense from transaction funding.
Flavor Solutions Volume Softness in Q4
Flavor solutions volumes declined in Q4 (global volumes: price +2% offset by ~1% volume decline). Americas flavor solutions volumes declined ~2% in Q4 (partly due to Latin America customer inventory resets), and EMEA flavor solutions organic sales decreased 3% (2% price, 1% lower volume). Management expects volume recovery in 2026 but noted lumpiness and softness with large CPG and branded food-service customers in 2025.
Operating Income Mixed by Segment
Consumer adjusted operating income for the full year declined 1% (driven by commodity costs, tariffs, and growth investments) even though consumer Q4 operating income increased 1%. Overall adjusted operating income and EPS finished at the low end of outlook for 2025 due to macro headwinds.
ERP Implementation Costs Phasing
Management refined ERP rollout to reduce execution risk by compressing waves, which shifts more program expense into 2026 (total program cost unchanged). This accelerates digital/ERP-related expense into 2026, with moderation expected in 2027 and beyond.
Category & Competitive Pressure in Specific Lines
Competitive activity in the U.S. Mexican flavor category tempered recipe mixes share performance; U.S. mustard category declined in Q4 and French's trailed the category due to promotional timing. Management expects normalization and remediation via innovation and marketing in 2026.
Consumer Demand Dynamics and Low Confidence
Management cited low overall consumer confidence, with shoppers making more frequent trips but buying fewer units per trip and stretching meals, pressuring volumes per trip and placing ongoing emphasis on value — a macro backdrop that constrains near-term unit growth despite favorable flavor trends.
Company Guidance
McCormick’s 2026 guidance calls for organic net sales growth of 1–3%, with the McCormick de Mexico acquisition adding 11–13% (implying total constant‑currency sales growth of about 12–16%); adjusted operating income is expected to rise 15–19% in constant currency and adjusted EPS is guided to $3.05–$3.13. Management expects full‑year gross‑margin expansion (recovering the ~60 bps compression from 2025) even as it weathers mid‑single‑digit cost inflation and an incremental ~$50M year‑over‑year tariff impact (total gross annualized tariff exposure ≈ $70M, down from $140M), which it plans to largely mitigate via CCI/productivity, alternative sourcing and surgical pricing. The company forecasts an adjusted effective tax rate of ~24% (vs ~22% in 2025), higher net interest expense and an unconsolidated expense from eliminating the 25% minority interest in McCormick de Mexico, while SG&A savings will be largely offset by increased brand marketing (low‑ to mid‑teens), digital/ERP timing shifts and a build‑back of incentive compensation.McCormick & Company Financial Statement Overview
Summary
Financials reflect a stable, resilient packaged foods profile: steady revenue and consistent earnings with solid margins, improving leverage (debt-to-equity down to ~0.70x), and a strong 2025 free-cash-flow rebound. Offsetting this are modest recent growth, some margin softening versus prior highs, and historical free-cash-flow volatility.Income Statement
Revenue has been steady to modestly higher from 2020 to 2025, but the most recent year shows only slight top-line expansion versus 2024. Profitability remains solid for a packaged foods business (gross margin ~36%–41% and net margin ~10%–13%), though margins have generally softened from 2020 highs and EBITDA margin is lower in 2025 versus 2024. Net income is stable overall, indicating resilience, but growth and margin momentum are not especially strong.74
Positive
Balance Sheet
Leverage has improved meaningfully, with debt-to-equity declining from above 1.2x (2020–2021) to ~0.70x in 2025, which reduces balance-sheet risk. Equity has grown steadily, and returns on equity remain healthy (mid-teens range), supporting overall quality. However, total debt is still sizable (~$4.0B), and profitability has not expanded enough to fully offset the drag that leverage can create in a slower-growth environment.67
Positive
Cash Flow
Cash generation is generally supportive: operating cash flow is solid across the period and free cash flow has been positive each year, with a strong rebound in 2025 (free cash flow up sharply versus 2024). Cash conversion relative to earnings is good in 2025 (free cash flow roughly matching net income), improving financial flexibility. The main weakness is volatility—free cash flow declined in 2021, 2022, and 2024 before the 2025 jump—suggesting working-capital or reinvestment swings.71
Positive
| Breakdown | Nov 2025 | Nov 2024 | Nov 2023 | Nov 2022 | Nov 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.84B | 6.72B | 6.66B | 6.35B | 6.32B |
| Gross Profit | 2.59B | 2.59B | 2.50B | 2.27B | 2.49B |
| EBITDA | 1.34B | 1.32B | 1.21B | 1.16B | 1.22B |
| Net Income | 789.40M | 788.50M | 680.60M | 682.00M | 755.30M |
Balance Sheet | |||||
| Total Assets | 13.20B | 13.07B | 12.86B | 13.12B | 12.91B |
| Cash, Cash Equivalents and Short-Term Investments | 95.90M | 186.10M | 166.60M | 334.00M | 351.70M |
| Total Debt | 4.00B | 4.51B | 4.59B | 5.33B | 5.39B |
| Total Liabilities | 7.43B | 7.75B | 7.78B | 8.43B | 8.48B |
| Stockholders Equity | 5.74B | 5.29B | 5.06B | 4.68B | 4.41B |
Cash Flow | |||||
| Free Cash Flow | 740.40M | 647.00M | 973.40M | 389.50M | 550.30M |
| Operating Cash Flow | 962.20M | 921.90M | 1.24B | 651.50M | 828.30M |
| Investing Cash Flow | -255.20M | -269.00M | -260.50M | -146.40M | -908.60M |
| Financing Cash Flow | -840.90M | -583.10M | -1.18B | -487.20M | 22.00M |
McCormick & Company Technical Analysis
Positive
68.50
Price Trends
66.68
Positive
66.06
Positive
68.28
Positive
Market Momentum
1.13
Negative
54.43
Neutral
42.83
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MKC, the sentiment is Positive. The current price of 68.5 is above the 20-day moving average (MA) of 66.11, above the 50-day MA of 66.68, and above the 200-day MA of 68.28, indicating a bullish trend. The MACD of 1.13 indicates Negative momentum. The RSI at 54.43 is Neutral, neither overbought nor oversold. The STOCH value of 42.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MKC.
McCormick & Company Risk Analysis
McCormick & Company disclosed 33 risk factors in its most recent earnings report. McCormick & Company reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
McCormick & Company Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $24.20B | 9.80 | 27.29% | 5.19% | -5.65% | 0.41% | |
68 Neutral | $13.47B | 28.18 | 6.02% | 4.82% | 1.55% | -40.81% | |
65 Neutral | $18.80B | 23.90 | 14.32% | 2.61% | 1.64% | -1.83% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
60 Neutral | $8.21B | 14.24 | 14.82% | 5.64% | 2.71% | 4.90% | |
58 Neutral | $8.99B | -90.82 | -1.16% | 7.87% | -5.82% | -119.70% | |
58 Neutral | $11.49B | ― | -17.44% | 4.45% | -0.66% | -326.55% |
* Consumer Defensive Sector Average
MKC
McCormick & Company
68.50
-10.65
-13.46%
CPB
Campbell Soup
26.83
-12.51
-31.79%
CAG
Conagra Brands
18.47
-5.54
-23.08%
GIS
General Mills
44.62
-13.80
-23.62%
HRL
Hormel Foods
24.99
-2.98
-10.64%
SJM
JM Smucker
110.38
3.72
3.49%
McCormick & Company Corporate Events
Business Operations and StrategyPrivate Placements and Financing
McCormick & Company Issues New Senior Notes for Refinancing
Neutral
Feb 5, 2026
On February 3, 2026, McCormick & Company entered into an underwriting agreement with a syndicate of banks led by BofA Securities, Truist Securities and Wells Fargo Securities for a $500 million offering of 4.150% senior unsecured notes due February 15, 2029, with the transaction closing on February 5, 2026. The company plans to use the proceeds to redeem a portion of its existing $500 million 0.90% notes maturing on February 15, 2026, effectively refinancing near-term debt at a higher coupon but extending its maturity profile, under an existing indenture that imposes customary limitations on liens, sale-leaseback transactions, and major corporate reorganizations, and includes standard events of default and change-of-control repurchase protections for noteholders.
The most recent analyst rating on (MKC) stock is a Buy with a $80.00 price target. To see the full list of analyst forecasts on McCormick & Company stock, see the MKC Stock Forecast page.
Business Operations and StrategyM&A Transactions
McCormick gains majority stake in McCormick de Mexico
Positive
Jan 2, 2026
On January 2, 2026, McCormick & Company completed the acquisition of an additional 25% ownership stake in its long-standing joint venture McCormick de Mexico S.A. de C.V. from Grupo Herdez for $750 million, raising its interest to 75% and securing majority control of the business formed in 1947. Funded through cash on hand and commercial paper, the deal is positioned to strengthen McCormick’s global flavor leadership, deepen its presence in the attractive Mexican market, and create a strategic platform for broader expansion across Latin America, with management highlighting the move as part of its strategy to drive shareholder value through acquisitions while expecting accretion to key financial metrics and only minimal impact on leverage.
The most recent analyst rating on (MKC) stock is a Buy with a $87.00 price target. To see the full list of analyst forecasts on McCormick & Company stock, see the MKC Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.