McCormick 2025 Q3 Earnings Modest Growth as Net Income Rises 1.1%

McCormick reported modestly better-than-expected Q3 earnings, with revenue and EPS both showing slight year-over-year gains. The company reaffirmed its sales guidance but lowered its profitability outlook due to rising costs.

McCormick (MKC) reported its fiscal 2025 Q3 earnings on Oct 07th, 2025. The company delivered a mixed performance, with revenue and earnings showing modest growth despite cost pressures. While the stock price dipped in the short term, management expressed cautious optimism about long-term strategic momentum.

Revenue
The total revenue of McCormick increased by 2.7% to $1.72 billion in 2025 Q3, up from $1.68 billion in 2024 Q3. This growth was driven by strong performance across its segments, with the Consumer segment contributing $973.20 million and the Flavor Solutions segment generating $751.70 million.

Earnings/Net Income
McCormick's EPS rose 1.2% to $0.84 in 2025 Q3 from $0.83 in 2024 Q3, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $225.50 million in 2025 Q3, marking 1.1% growth from $223.10 million in 2024 Q3. These results reflect the company’s operational resilience and long-term stability.

Price Action
The stock price of McCormick has edged down 2.71% during the latest trading day, has edged down 1.93% during the most recent full trading week, and has dropped 7.46% month-to-date.

Post-Earnings Price Action Review
Following the earnings report, the stock reacted negatively in the short term, with a decline in daily, weekly, and month-to-date performance. This price action reflects market concerns over cost pressures and inflationary headwinds. However, management emphasized its ability to adapt through cost savings and strategic innovation, offering a cautiously optimistic outlook for the remainder of the year.

CEO Commentary
Brendan Foley, President, CEO & Chairman, highlighted strong top-line performance with volume-led growth in Q3 2025, though gross margin faced pressure from rising costs. He emphasized differentiation through brand investments, distribution, and innovation, while adapting to global trade dynamics. Foley noted challenges in China’s foodservice segment due to slower consumption in high-end dining but remained optimistic about a full-year recovery. Strategic priorities include balancing volume and profitability, leveraging global sourcing and supply chain resilience, and maintaining long-term growth through innovation and digital transformation. He expressed cautious optimism, acknowledging near-term cost impacts while reaffirming confidence in sustained momentum and strategic execution.

Guidance
McCormick reaffirmed its 2025 guidance for organic net sales growth of 1% to 3%, with at least the midpoint achieved, while operating income growth is projected at 3% to 5% in constant currency. Adjusted EPS is expected to range between $3 and $3.05, reflecting updated commodity and tariff impacts. The company anticipates gross margin improvement in Q4 as mitigation efforts take effect and expects to close the McCormick de Mexico transaction in early 2026. Cash flow remains a priority, with strong operating cash flow expected for the year despite higher working capital needs in Q3.

Additional News
McCormick filed its 10-Q quarterly report on October 7, 2025, reaffirming its 2025 sales growth outlook while updating its profitability expectations in light of rising commodity costs and tariffs. The report detailed a 3% year-over-year increase in net sales, driven by a 2% organic sales growth. The company also announced a significant M&A development, with the expected closure of the McCormick de Mexico transaction in early 2026. This acquisition is anticipated to strengthen the company’s market presence in the region. Additionally, the report noted a 1% favorable impact from currency in the quarter and highlighted efforts to manage SG&A expenses through cost savings initiatives. The CEO emphasized strategic investments in innovation and digital transformation as key differentiators in a competitive market.