McCormick & Company Inc
NYSE:MKC
McCormick & Company Inc
McCormick & Company Inc., founded in 1889 by Willoughby M. McCormick, has steadily grown into a global leader in the spice, seasonings, and flavorings industry. What started as a small spice business peddling its wares from a horse-drawn wagon in Baltimore has transformed into a vast enterprise that flavors the kitchens of millions around the world. McCormick's success lies in its strategic acquisitions and relentless focus on quality, which have helped them build an extensive portfolio, including iconic brands like McCormick, Lawry's, and Old Bay. By continuously innovating and responding to consumer trends, such as the growing demand for organic and natural products, the company ensures its relevance and leadership.
Central to McCormick's operation is its robust supply chain, sourcing high-quality raw materials from farmers across the globe. This intricate supply network allows McCormick to maintain stringent quality control while producing a wide array of spice blends, herbs, and flavor solutions catering to both retail consumers and industrial clients. The retail segment includes household staples sold through supermarkets and online platforms, while the industrial side services restaurants and packaged food manufacturers with customized flavor solutions. Their business model thrives on creating value through brand strength and innovation, allowing McCormick & Company to maintain its position as a dominant force in the culinary world.
McCormick & Company Inc., founded in 1889 by Willoughby M. McCormick, has steadily grown into a global leader in the spice, seasonings, and flavorings industry. What started as a small spice business peddling its wares from a horse-drawn wagon in Baltimore has transformed into a vast enterprise that flavors the kitchens of millions around the world. McCormick's success lies in its strategic acquisitions and relentless focus on quality, which have helped them build an extensive portfolio, including iconic brands like McCormick, Lawry's, and Old Bay. By continuously innovating and responding to consumer trends, such as the growing demand for organic and natural products, the company ensures its relevance and leadership.
Central to McCormick's operation is its robust supply chain, sourcing high-quality raw materials from farmers across the globe. This intricate supply network allows McCormick to maintain stringent quality control while producing a wide array of spice blends, herbs, and flavor solutions catering to both retail consumers and industrial clients. The retail segment includes household staples sold through supermarkets and online platforms, while the industrial side services restaurants and packaged food manufacturers with customized flavor solutions. Their business model thrives on creating value through brand strength and innovation, allowing McCormick & Company to maintain its position as a dominant force in the culinary world.
Sales Growth: McCormick reported 2% organic sales growth in Q4, driven by both the Consumer and Flavor Solutions segments, with volume gains in Consumer despite challenging conditions.
Margin Pressure: Gross margins were pressured by higher-than-expected commodity inflation and tariffs, with Q4 gross margin declining 120 basis points; management expects to recover this margin in 2026.
Profitability: Adjusted operating income rose 3% in Q4 and 2% for the year, with EPS up 7% in Q4 and 2% for the full year, finishing at the low end of outlook due to cost headwinds.
Tariff Update: Tariff exposure has been reduced by 50%, but ~$50 million incremental tariff costs are expected in 2026; management aims to offset most of this through productivity and pricing.
2026 Guidance: Organic net sales are expected to grow 1–3%, total sales boosted by the McCormick de Mexico acquisition (11–13% contribution), with projected EPS of $3.05–$3.13 and gross margin expansion.
Volume Outlook: Both Consumer and Flavor Solutions segments are expected to deliver volume growth in 2026, with temporary elasticity impacts in Q1 but recovery as the year progresses.
Dividend Growth: The company increased its quarterly dividend by 7%, marking 40 consecutive years of annual increases.
