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Aug 31
McCormick Q3 2025 Earnings Report
McCormick reported its third quarter 2025 financial results, reaffirming sales growth outlook and updating its profitability outlook for fiscal year 2025.
Key Takeaways
McCormick delivered its fifth consecutive quarter of volume-led growth in Q3 2025, with net sales increasing 3% and organic sales up 2%. Despite gross margin pressure from rising commodity costs and tariffs, the company achieved operating profit growth through cost savings initiatives. Diluted EPS was $0.84, and adjusted diluted EPS was $0.85.
Net sales increased by 3% in the third quarter, with organic sales growth of 2% driven by volume.
Operating income rose to $289 million, a 0.8% increase from the prior year, while adjusted operating income grew 1.8% to $294 million.
Diluted earnings per share increased to $0.84, and adjusted diluted earnings per share reached $0.85.
Gross profit margin contracted by 130 basis points due to higher commodity costs and tariffs, partially offset by cost savings.
McCormick
McCormick
McCormick Revenue by Segment
Revenue by Segment
Consumer Net Sales Revenue
CapyFin.comFlavor Solutions Net Sales Revenue
CapyFin.com Forward Guidance
McCormick reaffirmed its sales growth outlook for fiscal year 2025 and updated its operating income and earnings per share outlook, reflecting rising commodity costs and incremental tariffs. The company expects continued volume-led growth and gross margin expansion impacted by increased commodity costs and tariffs, partially offset by SG&A benefits from its CCI program.
Positive Outlook
- Reaffirmed sales growth outlook of 0% to 2% (1% to 3% in constant currency).
- Anticipates total volume-led growth.
- Gradual improvement in China Consumer segment.
- SG&A benefits from the Comprehensive Continuous Improvement (CCI) program, including streamlining initiatives.
- Expects strong cash flow driven by profit and working capital initiatives, with a significant portion returned to shareholders through dividends.
Challenges Ahead
- Gross margin expansion impacted by increased commodity costs due to global trade uncertainty and tariffs.
- Operating income growth partially offset by a higher anticipated tax rate of approximately 22% (versus 20.5% in 2024).
- High-single digit year-over-year decline in income from unconsolidated operations due to U.S. dollar strengthening versus Mexican peso.
- Anticipates $20 million in special charges, primarily related to organizational and streamlining actions.
- Foreign currency rates are expected to unfavorably impact net sales by 1%, adjusted operating income by 1%, and adjusted earnings per share by 2%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income