McCormick & Company Incorporated (MKC) Post Earning Analysis

McCormick & Co., Inc., founded in 1889 and headquartered in Baltimore, MD, is a global leader in flavor, known for its wide range of spices, seasoning mixes, condiments, and other flavorful products. The company serves various markets through its Consumer and Flavor Solutions segments, providing products to retail outlets, food manufacturers, and foodservice businesses.

McCormick & Company (MKC) recently reported its Q3 earnings, surpassing both earnings and revenue estimates, driven by strong consumer demand. However, despite these positive results, the company has lowered its profit outlook for the year, citing increased cost pressures and the impact of tariffs. This adjustment in the profit forecast has been highlighted across multiple news sources, including Zacks, Just Food, and Benzinga, reflecting potential concerns about the company’s future profitability amidst economic challenges.

The news of the lowered profit outlook could potentially impact McCormick’s stock negatively as investors may react to the prospects of squeezed profit margins and increased operational costs. This development is crucial for investors holding or considering McCormick stock, as it might influence the stock’s performance in the near term, overshadowing the positive Q3 earnings beat. The situation underscores the volatile nature of the current global economic environment and its impact on companies like McCormick that are exposed to international trade and commodity fluctuations.

The current price of the asset at $67.40, which is a 1.26% decrease today, indicates a slightly bearish trend in the short term. The price is hovering near the lower end of its 52-week range ($63.66 to $85.22), showing a 20.91% drop from the 52-week high and only a modest 5.87% increase from the 52-week low. This suggests that the asset has been underperforming recently.

Year-to-date metrics mirror the 52-week data, indicating that the asset’s highest and lowest prices occurred within this timeframe, emphasizing a significant downward trend throughout the year.

The weekly price range is tight, with today’s price closer to the week’s low of $65.80 than to the week’s high of $69.13, highlighting short-term instability or consolidation.

The asset is currently trading below all major moving averages (20-day, 50-day, and 200-day), with particularly stark underperformance relative to the 200-day moving average (-8.74%). This alignment suggests a strong bearish sentiment over the long term.

RSI at 48.33 indicates a neutral momentum, neither overbought nor oversold, while a negative MACD (-0.37) confirms the bearish momentum observed in the price trend. This combination of indicators suggests that there might be ongoing bearish pressure, but not necessarily a rapid or extreme drop, allowing for potential stabilization or minor recoveries in the near term.

Price Chart

McCormick & Company, Incorporated (NYSE: MKC) reported a 3% increase in net sales to $1.725 billion for the third quarter of 2025, bolstered by a 1% favorable currency impact and organic sales growth of 2%. Operating income slightly rose to $289 million, up 0.8% year-over-year, with adjusted operating income reaching $294 million, a 2% increase. Despite these gains, gross profit saw a slight decline of 0.7% to $645.1 million, with a gross profit margin contraction of 130 basis points to 37.4%.

Earnings per share (EPS) improved modestly, with diluted EPS increasing by 1.2% to $0.84 and adjusted EPS rising by 2.4% to $0.85. Segment-wise, the Consumer segment saw a 4% increase in net sales to $973 million, while the Flavor Solutions segment reported a 1% rise to $752 million.

The company faced challenges from rising commodity costs and tariffs, which pressured gross margins, although ongoing cost savings initiatives offered some relief. SG&A expenses were reduced, contributing to financial efficiency. McCormick also demonstrated its commitment to shareholder returns, with increased dividends and share repurchases.

Looking ahead, McCormick expects net sales growth of 0% to 2%, operating income growth of 1% to 3%, and a full-year diluted EPS in the range of $2.95 to $3.00.

Earnings Trend Table

Over the last eight quarters, the company has generally reported earnings per share (EPS) that exceeded analyst estimates, with the exception of one quarter. Specifically, in the third quarter of 2025, the company underperformed relative to expectations, reporting an EPS of $0.60 against an estimate of $0.64, marking a -6.66% surprise. This stands out as an anomaly in an otherwise consistent pattern of surpassing estimates.

The trend shows a notable improvement in EPS over time, particularly evident in quarters where the reported EPS significantly exceeded expectations. For instance, in the fourth quarter of 2024, the company reported an EPS of $0.83 against an estimate of $0.68, a 22.51% positive surprise, which was one of the highest over the observed periods. Similarly, in the second quarter of 2024, there was a 17.61% positive surprise with an EPS of $0.69 against a forecast of $0.59.

The data suggests robust earnings performance, especially in the latter half of 2024, with a slight dip in early 2025, followed by a recovery in subsequent quarters. This pattern indicates strong operational execution and possibly a favorable business environment or effective strategic initiatives that allowed the company to consistently outperform analyst expectations. The ability to frequently exceed EPS estimates could positively influence investor sentiment and reflect well on the company’s financial health and management effectiveness.

Dividend Payments Table

The provided dividend data indicates a clear trend of gradual increase over the last eight recorded periods. Initially, dividends were set at $0.39 on October 6, 2023. This figure remained constant for the subsequent three quarters, where dividends were consistently pegged at $0.42. This phase of stability suggests a cautious yet steady approach to dividend growth, possibly reflecting the company’s operational stability and a conservative financial strategy during this period.

A notable shift occurred in the last three recorded dates, starting from December 30, 2024, when dividends were increased to $0.45. This increment has been maintained through to July 7, 2025, indicating a new level of confidence in the company’s earnings stability and future outlook. Such an increase could be attributed to improved financial performance or a strategic decision to attract and retain investors by enhancing shareholder value through higher dividend payouts. This trend of incremental growth in dividends is a positive signal to investors, suggesting a robust financial health and a commitment to returning value to shareholders.

The most recent rating changes for Outer exhibit a mixed sentiment from various financial firms, reflecting differing perspectives on the company’s market position and future outlook.

1. JP Morgan (2025-08-20): JP Morgan upgraded Outer from ‘Neutral’ to ‘Overweight’ and set a target price of $83. This upgrade suggests a positive shift in JP Morgan’s outlook, indicating an expectation of performance surpassing the industry average.

2. UBS (2025-06-16): UBS initiated coverage on Outer with a ‘Neutral’ rating and a target price of $83. This initiation at a neutral stance indicates a cautious optimism, aligning the target price with that set by JP Morgan, suggesting a consensus on the company’s valuation around this figure.

3. Argus (2025-03-27): Argus downgraded Outer from ‘Buy’ to ‘Hold.’ The absence of a specific target price following the downgrade reflects uncertainty or a perceived lack of immediate growth potential, advising investors to maintain their positions without additional accumulation.

4. TD Cowen (2025-01-08): TD Cowen upgraded Outer from ‘Hold’ to ‘Buy’ and increased the target price from $86 to $90. This represents a bullish outlook, with the revised target price indicating an expectation for solid growth and a favorable investment return prospect.

These adjustments from prominent financial firms highlight a generally favorable yet cautious view on Outer, with significant upgrades and a notable downgrade, each backed by strategic target pricing, reflecting nuanced views on the company’s future performance and market conditions.

The current price of the stock stands at $67.40. Recent analyst ratings suggest a potential upside, with target prices notably higher than the current market price. Notably, JP Morgan upgraded the stock from “Neutral” to “Overweight” with a target price of $83 as of August 20, 2025. Similarly, UBS initiated coverage with a “Neutral” rating and a target price also set at $83 on June 16, 2025. Earlier in the year, TD Cowen upgraded the stock from “Hold” to “Buy,” increasing their target price from $86 to $90 on January 8, 2025. However, Argus downgraded the stock from “Buy” to “Hold” on March 27, 2025, without specifying a new target price.

This pattern of upgrades, alongside the higher target prices compared to the current stock price, suggests a positive outlook among analysts regarding the stock’s future performance. The absence of detailed earnings per share (EPS) and dividend trends in the provided data limits a comprehensive financial analysis, but the analyst ratings imply a favorable market sentiment.

Disclaimer: The information provided here is for educational and informational purposes only and should not be interpreted as financial advice, investment recommendations, or trading guidance. Markets involve risk, and past performance is not indicative of future results. You should always conduct your own research and consult with a qualified financial advisor before making any investment decisions. By acting, you accept full responsibility for your choices.