McCormick & Company (MKC) Q2 2026 Financial Results Summary

2026-06-25 · Stocks · QuoteReporter

McCormick & Company (MKC) Q2 2026: Revenue Growth, EPS Decline — Mixed Results

In the second quarter of 2026, McCormick & Company reported a net sales increase of $277.1 million or +16.7% year-over-year, driven by a favorable currency impact of 2.7%. However, the company's earnings per share (EPS) fell to $0.56, down 13.8% from $0.65 in the same quarter last year. This mixed performance presents a complex picture for shareholders.

Key Financial Metrics

Net Sales: $1,936.6 million, up $277.1 million or +16.7% YoY
Operating Income: $276 million, up $29.6 million or +12.4% YoY
Adjusted Operating Income: $336 million, up $76.4 million or +30.1% YoY
Earnings Per Share (EPS): $0.56, down $0.09 or -13.8% YoY
Adjusted EPS: $0.80, up $0.11 or +15.9% YoY
Gross Profit Margin: 40.2%, up 270 basis points YoY

Analyst Opinion

This quarter presents a mixed bag for shareholders. While the revenue growth of 16.7% is commendable and reflects strong demand, particularly in the Consumer segment, the decline in reported EPS raises concerns about profitability. The adjusted EPS growth of 15.9% is a positive sign, but the overall decline in diluted EPS suggests that the company is facing challenges, including increased costs and special charges related to acquisitions.

The operating income growth of 12.4% and the significant increase in adjusted operating income of 30.1% indicate that McCormick is effectively managing its operations despite external pressures. The gross profit margin expansion of 270 basis points is particularly noteworthy, driven by cost savings initiatives and the acquisition of McCormick de Mexico.

Dividend and Share Buyback

McCormick declared a cash dividend of $0.48 per share, up from $0.45 in the prior year, reflecting the company's commitment to returning value to shareholders. This increase in dividends is a positive indicator of the company's confidence in its cash flow and future earnings potential.

Guidance and Future Catalysts

Looking ahead, McCormick has reaffirmed its fiscal 2026 outlook, projecting net sales growth of 13% to 17% and adjusted EPS between $3.05 to $3.13. The company expects to continue benefiting from the integration of McCormick de Mexico, which is anticipated to contribute significantly to sales growth.

Investors should watch for updates on the integration planning for the proposed combination with Unilever Foods, which is expected to enhance McCormick's growth strategy and operational efficiencies. The anticipated synergies from this combination could provide a substantial boost to both revenue and profitability in the coming quarters.

Conclusion

In summary, while McCormick's revenue growth is a positive sign, the decline in EPS and the challenges posed by inflation and increased costs warrant caution. The company's commitment to dividends and its strategic initiatives, including the Unilever Foods combination, could provide a pathway for recovery and growth. Investors should remain vigilant for developments in these areas as they assess McCormick's performance in the upcoming quarters.

Consolidated Statement of Operations (in millions)

Note: All amounts are in millions.

Three months ended	May 31, 2026	May 31, 2025	Six months ended	May 31, 2026	May 31, 2025
Net sales	$ 1,936.6	$ 1,659.5	$ 3,810.5	$ 3,265.0	$ 3,810.5
Cost of goods sold	1,158.4	1,036.7	2,323.4	2,038.2	2,323.4
Gross profit	778.2	622.8	1,487.1	1,226.8	1,487.1
Selling, general and administrative expense	441.8	364.2	898.1	743.0	898.1
Special charges	60.0	12.8	85.1	12.8	85.1
Operating income	276.4	245.8	503.9	471.0	503.9
Interest expense	62.7	51.0	110.0	99.5	110.0
Other income, net	6.5	9.8	11.3	19.6	11.3
Income from consolidated operations before income taxes	220.2	204.6	405.2	391.1	405.2
Income tax expense	63.5	49.3	112.2	90.9	112.2
Net income from consolidated operations	156.7	155.3	293.0	300.2	293.0
Income from unconsolidated operations	3.5	20.7	889.5	39.2	889.5
Net income	160.2	176.0	1,182.5	339.4	1,182.5
Net income attributable to noncontrolling interests	10.1	1.0	16.2	2.1	16.2
Net income attributable to McCormick & Company	150.1	175.0	1,166.3	337.3	1,166.3
Earnings per share – basic	0.56	0.65	4.34	1.26	4.34
Earnings per share – diluted	0.56	0.65	4.33	1.25	4.33
Average shares outstanding – basic	269.2	268.6	269.0	268.5	269.0
Average shares outstanding – diluted	269.2	269.4	269.3	269.5	269.3
Cash dividends paid per share – voting and non-voting	0.48	0.45	0.96	0.90	0.96

Consolidated Balance Sheet (in millions)