McCormick & Co. Inc (Non Voting)
Q1 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: −4.31%.
Did MKC Beat Earnings? Q1 2025 Results
McCormick delivered a mixed first quarter for fiscal 2025, falling short of Wall Street expectations as adjusted diluted EPS of $0.60 missed the $0.64 consensus estimate by 6.85%, and revenue of $1.61 billion edged just 0.53% below forecasts. The headline numbers masked a more nuanced story underneath: while the Flavor Solutions segment impressed with operating income surging 28% to $79.00 million on favorable product mix and cost savings, the Consumer segment weighed on results as pricing investments and higher brand marketing costs drove segment operating income down 17% to $147.00 million. A timing shift in stock-based compensation further pressured SG&A expenses, pulling adjusted operating income down 5% to $225.20 million despite a modest 20-basis-point expansion in gross margin to 37.6%. Currency headwinds added roughly $0.03 of drag to EPS. Looking ahead, management reaffirmed its full-year adjusted EPS guidance of $3.03 to $3.08, expressing confidence in CCI cost savings and targeted pricing to absorb tariff pressures, even as the company actively reformulates products to remove certain food dyes amid evolving regulatory scrutiny.
- 2% volume growth offsetting 2% unfavorable currency impact
- CCI program driving cost savings and gross margin expansion of 20 basis points
- Share gains in core categories across key markets
- Flavor Solutions operating income grew 28% (33% constant currency) driven by product mix, pricing, and CCI savings
- Lower tax rate of 22.3% versus 25.5% in the year-ago period partially offset EPS headwinds
“We are pleased to start the year with solid first quarter results that are in line with our expectations, as we are managing a dynamic environment. Our continued volume-driven performance reflects the success of our prioritized investments in the areas that are driving the greatest value and will sustain our momentum for the remainder of 2025 and beyond. We achieved share gains in core categories across key markets and delivered volume growth in both the Consumer and Flavor Solutions segments.”
McCormick CEO, on the earnings call
Forward Guidance & Outlook
McCormick reaffirmed its fiscal 2025 outlook: net sales growth of 0%–2% (1%–3% constant currency), driven by volume-led growth across both segments with gradual improvement in China Consumer. Adjusted operating income growth of 3%–5% (4%–6% constant currency), with gross margin expansion partially offset by growth investments including brand marketing. Adjusted EPS of $3.03–$3.08 (3%–5% growth, or 5%–7% constant currency), with operating income growth partially offset by a higher tax rate (22% vs. 20.5% in 2024) and mid-teens year-over-year decline in unconsolidated operations income due to USD strengthening vs. Mexican peso. Special charges of approximately $15 million expected, impacting EPS by $0.04. Currency expected to unfavorably impact sales by 1%, adjusted operating income by 1%, and adjusted EPS by 2%. The outlook reflects plans to offset U.S. import tariffs on China with CCI savings and targeted price adjustments but excludes any additional tariff actions due to continued uncertainty.
MKC YoY Financials
MKC Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.