McCormick posted adjusted EPS of $0.66 (vs. $0.61 estimate) and revenue of $1.87B (vs. $1.79B estimate) for Q1 2026, beating Wall Street on both metrics. The results were overshadowed by the blockbuster announcement of a merger with Unilever’s Foods business, sending shares down approximately 5.7% in after-hours and premarket trading despite the earnings beat.
About McCormick
McCormick & Company, Incorporated (NYSE MKC) is a global flavor company that manufactures, markets, and distributes herbs, spices, seasonings, condiments, and flavor solutions across more than 150 countries and territories. The company operates through two primary segments, Consumer and Flavor Solutions, serving retailers, food manufacturers, and foodservice customers worldwide.
McCormick was founded in 1889 and is headquartered in Hunt Valley, Maryland USA. The company generates approximately $7 billion in annual sales and has a diversified brand portfolio including McCormick, French’s, Frank’s RedHot, Cholula, OLD BAY, Lawry’s, and others, positioning it as a leading player in the global flavor market. Recent market data show a market capitalization in the high teens billions of dollars with a P/E ratio in the low to mid 20s and a dividend yield near the mid 2% range.
Top Financial Highlights
- Net sales for Q1 2026 were $1.87 billion, up 16.7% year over year, including a 3.1% favorable currency impact and 1.2% organic sales growth.
- Consumer segment net sales rose 24.5% to $1.15 billion, with a 19.8% contribution from McCormick de Mexico and 2.9% benefit from currency and 1.8% organic growth.
- Flavor Solutions segment net sales increased 6.2% to $729 million, driven by a 3.3% currency benefit, 2.4% acquisition contribution, and 0.5% organic growth.
- Gross profit was $708.9 million, up from $604.0 million a year earlier, with reported gross margin of 37.8%, expanding 20 basis points.
- Adjusted gross profit was $723.9 million, with adjusted gross margin of 38.6%, an improvement of 100 basis points from the prior year.
- Operating income came in at $227.5 million, up 1.0% versus Q1 2025, while adjusted operating income rose to $267.6 million, an increase of 18.8%.
- Net income attributable to McCormick surged to $1,016.2 million from $162.3 million in the prior-year quarter, primarily reflecting a non cash gain from remeasurement of the McCormick de Mexico stake.
- Diluted earnings per share were $3.77, compared to $0.60 a year ago; adjusted diluted EPS was $0.66, up from $0.60, a 10% increase.
- Consumer segment adjusted operating income increased 22.4% to $180 million.
- Flavor Solutions segment adjusted operating income rose 12.1% to $88 million, or 7.5% in constant currency.
- Operating cash flow for the quarter was $50.9 million, compared to $115.5 million in Q1 2025.
- Cash and cash equivalents at quarter end were $177.7 million, up from $95.9 million at fiscal year end 2025.
- Total assets increased to $16.35 billion, driven by higher goodwill and intangibles following the consolidation of McCormick de Mexico.
- The company reaffirmed its fiscal 2026 outlook, including net sales growth of 13 to 17%, adjusted operating income growth of 16 to 20%, and adjusted EPS growth of 2 to 5% to a range of approximately $3.05 to $3.13.
Beat or Miss?
| Metric | Reported | Difference/Analysis |
| Net sales Q1 2026 | $1.87 billion | Strong double digit growth of 16.7% year over year, supported mainly by the McCormick de Mexico acquisition and modest organic growth. |
| Diluted EPS Q1 2026 | $3.77 | Boosted by a non cash gain of $3.22 per share from remeasurement of the McCormick de Mexico equity interest, far above prior year $0.60. Analyst consensus figures were not disclosed. |
| Adjusted diluted EPS Q1 2026 | $0.66 | Up 10% from $0.60 in Q1 2025, reflecting improved adjusted operating income; Street expectations not provided so consensus impact is N/A. |
| Adjusted operating income Q1 2026 | $267.6 million | Increased 18.8% year over year with 16% constant currency growth. |
| Operating cash flow Q1 2026 | $50.9 million | Down from $115.5 million a year earlier; no direct expectations provided. |
What Leadership Is Saying?
“We are pleased to begin the year with first quarter results that demonstrate the strength and resilience of our business. We delivered strong growth in sales, adjusted operating income, and adjusted earnings per share, supported by the McCormick de Mexico acquisition and organic growth across both Consumer and Flavor Solutions. Strong sales, acquisition accretion, and disciplined cost management enabled margin expansion as we continued to invest for future growth.” – Brendan M. Foley, Chairman, President, and CEO
“First quarter total volumes were in line with our expectations, and we anticipate sequential improvement with growth building throughout the year, as we benefit from brand investments, increased innovation in both segments, and distribution gains. Our fundamentals remain strong, supported by our advantaged portfolio, disciplined execution, and continued investment, positioning us to drive sustained, profitable growth. We remain on track to achieve our 2026 outlook.” – Brendan M. Foley, Chairman, President, and CEO
Historical Performance
| Category | Q1 2026 | Q1 2025 | Change (%) |
| Net sales | $1,873.9 million | $1,605.5 million | 16.7% increase, including 3.1% favorable currency and 1.2% organic growth. |
| Net income attributable to McCormick | $1,016.2 million | $162.3 million | 526.1% increase driven by non cash gain on McCormick de Mexico remeasurement. |
| Adjusted net income | $176.9 million | $162.3 million | 9.0% increase on an adjusted basis. |
| Operating income | $227.5 million | $225.2 million | 1.0% increase in reported operating income. |
| Adjusted operating income | $267.6 million | $225.2 million | 18.8% increase, 16.0% in constant currency. |
| Operating cash flow | $50.9 million | $115.5 million | Decline of approximately 55.9%. |
Competitor Comparison
Food and Flavor Peer YoY Quarterly Performance
| Category | McCormick Q1 2026 | McCormick Q1 2025 | Change (%) |
| Revenue | $1,873.9M | $1,605.5M | 16.70% |
| Adjusted Operating Income | $268M | $225.2M | 18.80% |
| Adjusted EPS | $0.66 | $0.60 | 10.00% |
| Category | Kraft Heinz Q4 2025 | Kraft Heinz Q4 2024 | Change (%) |
| Revenue | $6.35B | $6.57B (implied) | -3.40% |
| Organic Net Sales | Missed estimates | N/A | Declined |
| EPS Guidance | Cut for full year | N/A | Negative revision |
How the Market Reacted?
Despite beating analyst estimates on both revenue and adjusted EPS, McCormick shares fell approximately 5.7% to around $50.66 in after-hours and premarket trading following the Q1 earnings release. The sell-off was driven not by the earnings figures themselves but by the simultaneous announcement of McCormick’s agreement to combine with Unilever’s Foods business, a deal that values the combined entity at approximately $65 billion and requires McCormick to pay $15.7 billion in cash.
Investors appeared concerned about the debt burden, integration risks, and dilution implications, as Unilever shareholders are expected to own 55.1% of the newly formed entity. The stock had already declined approximately 23.2% over the prior month versus the S&P 500’s 7.6% drop, reflecting broader caution even ahead of the announcement. The fundamental earnings report itself was characterized by analysts as a “solid beat,” but the market narrative shifted almost entirely to the Unilever merger as the dominant story.
