McCormick & Company, Incorporated (NYSE:MKC) stock fell Thursday after the spice maker posted a mixed quarter.
The company beat revenue expectations, but weaker profit performance and margin pressure weighed on sentiment.
The company reported fourth-quarter adjusted earnings per share of 86 cents, missing the Street view of 88 cents. Quarterly sales of $1.850 billion outpaced the analyst consensus estimate of $1.845 billion.
Quarterly Metrics
Net sales rose 3% in the fourth quarter from the prior-year period.
Currency added a 1% tailwind to results. Organic sales increased 2% year over year.
Consumer segment net sales increased 4% from the fourth quarter of 2024 to $1.127 billion, including a 1% favorable impact from currency. Flavor Solutions segment sales increased 2% from the fourth quarter of 2024 to $723 million, with a 1% impact from currency.
Quarterly adjusted operating income was $317 million compared to $308 million in the year-ago period.
Gross profit for the fourth quarter decreased by $2 million from the comparable period in 2024. Gross profit margin contracted 130 basis points.
On the earnings call, McCormick Chairman, President, and CEO Brendan Foley said fourth-quarter gross margins were pressured by higher-than-expected inflation across a broad range of commodities and by tariff costs that exceeded earlier expectations.
The company exited the quarter with cash and equivalents worth $95.9 million.
Outlook
McCormick forecast fiscal 2026 GAAP earnings per share of $3.05 to $3.13, above the $2.97 consensus estimate, and projected fiscal 2026 net sales growth of 12% to 16% at constant currency.
For fiscal 2026, the company expects net sales to benefit from sustained volume growth and pricing gains, alongside a recovery in adjusted operating income driven by margin expansion, organic growth, the McCormick de Mexico acquisition, and cost-saving initiatives, partly offset by higher commodity costs and SG&A pressures.
Adjusted EPS growth is expected to be tempered by a higher effective tax rate, increased interest expenses linked to the Mexico deal, and changes in unconsolidated operations following the removal of the minority interest.
MKC Price Action: McCormick & Co. shares were down 6.00% at $62.56 at the time of publication on Thursday. The stock is trading at a new 52-week low, according to Benzinga Pro data.
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