McCormick & Company (MKC) Q3 2026 Financial Results Summary
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McCormick & Company (MKC) Q3 2026: Revenue Surge, EPS Decline — Mixed Results
In the third quarter of 2026, McCormick & Company reported a notable increase in net sales, which rose by $299.9 million or 17.4% compared to the same quarter last year. This growth was bolstered by a 0.9% favorable impact from currency fluctuations, while organic sales growth stood at 1.9%. However, the company faced a significant decline in earnings per share (EPS), which fell to $0.36, down 57.1% from $0.84 in the prior year.
Overall, this quarter presents a mixed bag for shareholders. While the revenue growth is a positive indicator of demand and market presence, the sharp decline in EPS raises concerns about profitability and cost management. The substantial drop in net income attributable to McCormick, which decreased by 56.7% to $97.6 million, suggests that the company is grappling with rising costs and integration expenses related to its recent acquisition of McCormick de Mexico.
Key Financial Metrics:
- Net Sales: $2,024.8 million, up 17.4% YoY
- Organic Sales Growth: 1.9%
- Gross Profit Margin: 39.3%, expanded by 190 basis points YoY
- Operating Income: $217 million, down 24.8% YoY
- Adjusted Operating Income: $359 million, up 22.1% YoY
- Earnings Per Share (EPS): $0.36, down 57.1% YoY
- Adjusted EPS: $0.86, up 1.2% YoY
Dividend and Share Buyback:
McCormick declared a cash dividend of $0.48 per share, an increase from $0.45 in the same quarter last year. This reflects the company's commitment to returning value to shareholders despite the challenges faced in profitability.
Guidance and Future Outlook:
McCormick reaffirmed its fiscal 2026 outlook, projecting net sales growth of 13% to 17% and adjusted EPS between $3.05 to $3.13. The company anticipates continued contributions from the McCormick de Mexico acquisition, which is expected to enhance both sales and operational efficiencies.
Investors should keep an eye on the integration of McCormick de Mexico and the anticipated benefits from the proposed combination with Unilever Foods, which is expected to close by mid-2027. The integration planning is reportedly on track, and McCormick aims to realize approximately $600 million in annual run-rate cost synergies post-close.
Conclusion:
In summary, while McCormick's revenue growth is commendable, the significant decline in EPS and net income raises red flags regarding cost management and operational efficiency. The company's ability to navigate these challenges while executing its strategic initiatives will be crucial for maintaining shareholder confidence. Investors should monitor the upcoming quarters closely, particularly the integration of McCormick de Mexico and the progress of the Unilever Foods combination, as these factors will likely influence future performance and stock valuation.
Here are the extracted tables from the press release:
Consolidated Income Statement (in millions except per share data)
Note: All amounts are in millions.
| Three months ended | August 31, 2026 | August 31, 2025 | Nine months ended | August 31, 2026 | August 31, 2025 |
|---|---|---|---|---|---|
| Net sales | $ 2,024.8 | $ 1,724.9 | $ 5,835.3 | $ 4,989.9 | |
| Cost of goods sold | 1,229.9 | 1,079.8 | 3,553.3 | 3,118.0 | |
| Gross profit | 794.9 | 645.1 | 2,282.0 | 1,871.9 | |
| Selling, general and administrative expense | 436.4 | 352.5 | 1,334.5 | 1,095.5 | |
| Special charges | 141.5 | 3.9 | 226.6 | 16.7 | |
| Operating income | 217.0 | 288.7 | 720.9 | 759.7 | |
| Interest expense | 68.4 | 50.2 | 178.4 | 149.7 | |
| Other income, net | 5.9 | 9.4 | 17.2 | 29.0 | |
| Income from consolidated operations before income taxes | 154.5 | 247.9 | 559.7 | 639.0 | |
| Income tax expense | 49.9 | 39.3 | 162.1 | 130.2 | |
| Net income from consolidated operations | 104.6 | 208.6 | 397.6 | 508.8 | |
| Income from unconsolidated operations | 3.0 | 19.1 | 892.5 | 58.3 | |
| Net income | 107.6 | 227.7 | 1,290.1 | 567.1 | |
| Net income attributable to noncontrolling interests | 10.0 | 2.2 | 26.2 | 4.3 | |
| Net income attributable to McCormick & Company | $ 97.6 | $ 225.5 | $ 1,263.9 | $ 562.8 | |
| Earnings per share – basic | 0.36 | 0.84 | 4.70 | 2.10 | |
| Earnings per share – diluted | 0.36 | 0.84 | 4.69 | 2.09 | |
| Average shares outstanding – basic | 269.3 | 268.6 | 269.1 | 268.5 | |
| Average shares outstanding – diluted | 269.4 | 269.3 | 269.3 | 269.4 | |
| Cash dividends paid per share – voting and non-voting | 0.48 | 0.45 | 1.44 | 1.35 |
Consolidated Balance Sheet (in millions)
Note: All amounts are in millions.
| August 31, 2026 | November 30, 2025 | |
|---|---|---|
| ASSETS | ||
| Cash and cash equivalents | $ 331.1 | $ 95.9 |
| Trade accounts receivable, net of allowances | 831.5 | 628.9 |
| Inventories, net | 1,446.1 | 1,272.0 |
| Prepaid expenses and other current assets | 296.1 | 141.3 |
| Total current assets | 2,904.8 | 2,138.1 |
| Property, plant and equipment, net | 1,537.7 | 1,448.8 |
| Goodwill | 6,303.9 | 5,301.3 |
| Intangible assets, net | 4,958.9 | 3,293.1 |
| Other long-term assets | 945.3 | 1,019.1 |
| Total assets | $ 16,650.6 | $ 13,200.4 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
| Short-term borrowings and current portion of long-term debt | $ 2,112.1 | $ 890.5 |
| Trade accounts payable | 1,481.3 | 1,259.4 |
| Other accrued liabilities | 826.6 | 912.3 |
| Total current liabilities | 4,420.0 | 3,062.2 |
| Long-term debt | 2,906.1 | 3,105.8 |
| Deferred taxes | 1,323.0 | 835.8 |
| Other long-term liabilities | 414.4 | 428.5 |
| Total liabilities | 9,063.5 | 7,432.3 |
| Shareholders’ equity | ||
| Common stock | 580.3 | 582.4 |
| Common stock non-voting | 1,749.5 | 1,700.8 |
| Retained earnings | 4,811.5 | 3,816.4 |
| Accumulated other comprehensive loss | (138.0) | (363.1) |
| Total McCormick & Company shareholders’ equity | 7,003.3 | 5,736.5 |
| Non-controlling interests | 583.8 | 31.6 |
| Total shareholders’ equity | 7,587.1 | 5,768.1 |
| Total liabilities and shareholders’ equity | $ 16,650.6 | $ 13,200.4 |
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