McCormick & Company, Incorporated reported a strong start to fiscal 2026, announcing its financial results for the first quarter ended February 28, 2026, while reaffirming its full-year outlook. The company delivered solid growth across key financial metrics, supported by acquisition-driven expansion, steady organic performance, and continued cost discipline.
Strong Top-Line Growth Driven by Acquisition and Pricing
Net sales for the first quarter rose 16.7% compared to the same period last year, benefiting from a favorable currency impact of 3.1%. On an organic basis, sales increased 1.2%, reflecting modest but steady underlying demand, largely driven by pricing actions. A significant contributor to overall growth was the January 2026 acquisition of McCormick de Mexico, which accounted for approximately 13% of the sales increase.
The company’s dual-segment structure—Consumer and Flavor Solutions—both contributed to the positive performance.
- The Consumer segment posted net sales of $1,145 million, representing a 25% increase year-over-year. This growth included a 20% contribution from the McCormick de Mexico acquisition and a 3% benefit from currency. Organic sales in this segment grew 2%, primarily driven by pricing strategies.
- The Flavor Solutions segment, which serves foodservice and industrial customers, recorded net sales of $729 million, up 6% from the prior year. This included a 3% favorable currency impact and a 2% contribution from the acquisition. Organic sales rose 1%, again led by pricing.
Profitability Improves with Margin Expansion
Gross profit increased by $105 million compared to the first quarter of 2025, reflecting higher sales and improved operational efficiencies. Gross profit margin expanded by 20 basis points year-over-year. When excluding transaction-related expenses tied to the acquisition, adjusted gross margin expanded by a more substantial 100 basis points.
This margin improvement was driven by several factors:
- Contribution from the McCormick de Mexico acquisition
- Effective pricing strategies
- Cost savings generated through the company’s Comprehensive Continuous Improvement (CCI) program
These gains were partially offset by higher commodity costs, which continue to be a challenge across the food industry.
Operating Income and Expense Management
Operating income for the quarter totaled $228 million, slightly up from $225 million in the prior-year period. However, when excluding special charges, adjusted operating income reached $268 million, marking a 19% increase year-over-year. Currency contributed approximately 3% to this growth, with constant currency adjusted operating income rising 16%.
The increase in adjusted operating income was primarily driven by:
- Higher gross profit
- Ongoing cost efficiencies through the CCI program
- Streamlining of selling, general, and administrative (SG&A) expenses
However, these gains were partially offset by increased SG&A spending, largely due to:
- Integration and operational costs associated with the acquisition
- Continued investment in brand marketing
- Increased spending on technology initiatives to support long-term growth
Segment-Level Operating Performance
Both business segments delivered improved operating income:
- The Consumer segment reported a 22% increase in operating income (excluding special charges), reaching $180 million. In constant currency terms, growth was 20%. This improvement was driven by higher gross profit, although partially offset by increased investments in marketing and technology.
- The Flavor Solutions segment achieved a 12% increase in operating income (excluding special charges), totaling $88 million. Constant currency growth stood at 7%. Similar to the Consumer segment, gains were supported by higher gross profit but tempered by elevated SG&A expenses.
Earnings Per Share Impacted by One-Time Gain
Earnings per share (EPS) for the first quarter rose sharply to $3.77, compared to $0.60 in the same period last year. This significant increase was largely driven by a non-cash gain related to the remeasurement of McCormick’s previously held equity interest in McCormick de Mexico, which contributed $3.22 to EPS.
At the same time, special charges—including transaction and integration costs—reduced EPS by $0.11.
Excluding these one-time items, adjusted EPS was $0.66, up from $0.60 in the prior-year quarter. The improvement in adjusted EPS was primarily attributable to higher adjusted operating income.
Leadership Commentary and Strategic Outlook
Chairman, President, and CEO Brendan M. Foley highlighted the company’s strong start to the year, emphasizing the resilience of its business model and the benefits of its strategic initiatives.
He noted that growth in the quarter was supported by a combination of acquisition accretion, disciplined cost management, and steady organic performance across both segments. Foley also pointed out that while volumes were in line with expectations, the company anticipates sequential improvement throughout the year.
This expected growth will be driven by:
- Continued brand investments
- Increased product innovation
- Expanded distribution channels
Foley reaffirmed confidence in McCormick’s long-term strategy, citing its strong portfolio, disciplined execution, and commitment to sustained investment as key drivers of future growth.
Reaffirmed Fiscal 2026 Outlook
Based on its solid first-quarter performance and positive momentum, McCormick reaffirmed its fiscal 2026 outlook. The company continues to expect growth in:
- Net sales
- Adjusted operating income
- Adjusted earnings per share
Management remains focused on delivering profitable growth while strengthening its position as a global leader in flavor.
Commitment to People and Future Growth
In closing, Foley expressed appreciation for McCormick’s global workforce, recognizing employees as a critical foundation of the company’s success. He reiterated the organization’s commitment to fostering a strong “Power of People” culture and building a future-ready workforce capable of supporting long-term growth.
Overall, McCormick’s first-quarter results reflect a balanced performance, combining acquisition-driven expansion with steady organic growth, improved margins, and continued strategic investment—positioning the company well for the remainder of fiscal 2026.
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