McCormicks Revenue Rises, EPS Misses Stock Dives 7%

McCormick reported Q4 2025 earnings on January 22, 2026, with revenue of $1.85 billion, exceeding expectations, while adjusted EPS of $0.86 slightly underperformed. Guidance for 2026 remained in line with prior projections, emphasizing gross margin recovery and strategic investments.

Revenue

McCormick’s total revenue rose 2.9% year-over-year to $1.85 billion in Q4 2025. The Consumer segment drove growth, contributing $1.12 billion in sales—a 4% increase—while the Flavor Solutions segment added $723 million, up 2%. Organic sales growth of 2% underscored volume and pricing momentum, particularly in the Consumer division, as the company navigated inflationary pressures and global trade dynamics.

Earnings/Net Income

The company’s EPS increased 7.0% to $0.81, with net income growing 5.3% to $226.60 million. Sustained profitability over 20+ years highlights operational resilience, though investors remain cautious about future margin pressures. The EPS growth reflects disciplined cost management and margin expansion, despite challenges in the second half of the fiscal year.

Price Action

The stock price of McCormick has declined 3.30% during the latest trading day, 10.75% over the past week, and 10.60% month-to-date. The strategy of buying shares after a quarterly revenue drop and holding for 30 days yielded no return over three years, with a CAGR of 0.00% and maximum drawdown of 0.00%.

CEO Commentary

CEO Brendan Foley emphasized resilience in 2025, citing volume-led organic growth and strategic investments in innovation and supply chain. He highlighted strong Consumer segment performance and optimism about 2026, including the acquisition of McCormick de Mexico and recovery in China.

Guidance

For 2026, McCormick projects organic sales growth of 1% to 3%, with the Mexico acquisition contributing 11% to 13% to top-line growth. Adjusted EPS is targeted at $3.05 to $3.13, reflecting gross margin recovery and pricing initiatives, partially offset by inflation and ERP costs. Operating income growth is guided to 15% to 19% in constant currency.

Post-Earnings Price Action Review

Following the earnings report, McCormick’s shares experienced a 7% decline in afternoon trading, driven by a weaker-than-expected profit forecast for 2026. While Q4 revenue of $1.85 billion exceeded estimates, the adjusted EPS of $0.86 fell short of Wall Street’s $0.88. The market’s reaction underscored investor focus on future profitability, with the stock down 9.5% year-to-date. Historically, McCormick’s stock has shown limited volatility, but the recent drop signals heightened caution. The company’s long-term strategy, including the Mexico acquisition and e-commerce expansion, remains intact, though near-term margin pressures persist.

Additional News

McCormick announced the acquisition of McCormick de Mexico, expected to boost 2026 sales by 11% to 13%. CEO Brendan Foley highlighted the strategic move as a catalyst for growth in high-growth markets. Meanwhile, the company’s stock plummeted 7% on January 22 after missing EPS estimates and issuing a weaker-than-anticipated profit forecast. Despite the decline, management reaffirmed confidence in long-term value creation through innovation and global expansion. Additionally, the company reported 2% organic sales growth in Q4, driven by volume gains in the Consumer segment, demonstrating resilience amid inflationary challenges.