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1. Company Snapshot

1.a. Company Description

McCormick & Company, Incorporated manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to the food industry.It operates in two segments, Consumer and Flavor Solutions.The Consumer segment offers spices, herbs, and seasonings, as well as condiments and sauces, and desserts.


This segment markets its products under the McCormick, French's, Frank's RedHot, Lawry's Cholula Hot Sauce, Gourmet Garden, Club House, and OLD BAY brands in the Americas; Ducros, Schwartz, Kamis, and Drogheria & Alimentari, and Vahiné brands in Europe, the Middle East, and Africa; McCormick and DaQiao brands in China; and McCormick, Aeroplane, and Gourmet Garden brands in Australia, as well as markets regional and ethnic brands, such as Zatarain's, Stubb's, Thai Kitchen, and Simply Asia.It also supplies its products under the private labels.This segment serves retailers comprising grocery, mass merchandise, warehouse clubs, discount and drug stores, and e-commerce retailers directly and indirectly through distributors and wholesale foodservice suppliers.


The Flavor Solutions segment offers seasoning blends, spices and herbs, condiments, coating systems, and compound flavors to multinational food manufacturers and foodservice customers.It serves foodservice customers directly and indirectly through distributors.The company was founded in 1889 and is headquartered in Hunt Valley, Maryland.

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1.b. Last Insights on MKC

McCormick & Company, Incorporated's recent performance was negatively impacted by rising costs and consumer pressures. The company's Q2 earnings report revealed modest sales growth, but high costs weighed on earnings. Despite beating EPS estimates, concerns linger regarding the company's ability to mitigate tariff costs. A Hold rating from an analyst cites lackluster sales growth and limited margin improvement prospects. The company's Comprehensive Continuous Investment program aims to drive margin recovery, but growth drivers are limited.

1.c. Company Highlights

2. McCormick's Q3 Earnings Report: Steady Sales but Margin Pressures

McCormick & Company reported a 2% increase in organic sales for the third quarter, driven largely by volume growth in its Global Consumer segment. The company's adjusted earnings per share (EPS) met expectations, coming in at $0.85, slightly above the estimated $0.81. Revenue growth was modest, with the Global Consumer segment posting 3% organic sales growth, while the Global Flavor Solutions segment achieved 1% organic sales growth. Gross margin was down 120 basis points due to higher commodity costs, tariffs, and investments in future growth. Despite these headwinds, operating income increased by 2%, driven by improved SG&A expenses.

Publication Date: Oct -08

📋 Highlights
  • Global Consumer Growth:: 3% organic sales growth driven by Americas and EMEA, offset by 1% decline in Asia-Pacific due to China's food service sector softness.
  • Gross Margin Decline:: 120 basis points contraction from higher commodity costs, tariffs, and growth investments, with Q4 improvement expected.
  • CEO Strategy Emphasis:: Maintained 3% volume growth in Consumer Americas via Canada, e-commerce, and club stores despite U.S. sector slowdown.
  • 2025 EPS Guidance:: Projects $3.00–$3.05 adjusted EPS (4–6% growth), reaffirming commitment to volume-led sales despite cost pressures.

Segment Performance

The company’s Consumer report saw strong volume gains in the Americas and EMEA, contributing to the 3% organic sales growth. However, Asia-Pacific consumer sales declined 1% due to softness in China's food service sector. The Flavor Solutions segment saw 1% organic sales growth, driven by pricing, while volume remained flat due to unfavorable comparisons from the prior year. According to CEO Brendan Foley, McCormick's Consumer Americas volume growth remained robust at around 3%, similar to Q2, driven by strong performance in Canada and growth in e-commerce and club stores.

Outlook and Guidance

McCormick reaffirmed its volume-led sales growth outlook and expects to deliver at least the midpoint of its organic sales growth range. However, operating profit growth is expected to be at the low end of the previously provided range due to ongoing cost pressures. The company is confident in its ability to manage costs and deliver profitable growth, maintaining its 2025 financial outlook projecting adjusted earnings per share between $3.00 and $3.05, representing a 4% to 6% constant currency EPS growth.

Valuation and Future Prospects

With a P/E Ratio of 22.57 and an EV/EBITDA of 16.73, McCormick's valuation suggests that the market is pricing in steady growth prospects. Analysts estimate next year's revenue growth at 6.8%. The company's commitment to mitigating the impact of tariffs through productivity savings, alternative sourcing, and targeted pricing is expected to support its future growth. Additionally, McCormick's focus on volume-led growth, despite facing cost pressures, is likely to drive its long-term growth prospects.

3. NewsRoom

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MKC's Q3 Shows Solid Consumer Momentum: Will the Strength Last in 2026?

Dec -02

Source: zacks.com

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McCormick & Company, Incorporated (NYSE:MKC) versus United Natural Foods (NYSE:UNFI) Head-To-Head Analysis

Nov -29

Source: defenseworld.net

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Charles Schwab Investment Management Inc. Boosts Stake in McCormick & Company, Incorporated $MKC

Nov -28

Source: defenseworld.net

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Flavor Solutions Lifts MKC's Q3 Results: Will the Growth Last?

Nov -26

Source: zacks.com

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House Democratic Rep. Sheila Cherfilus-McCormick charged with stealing $5 million in FEMA funds

Nov -20

Source: cnbc.com

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McCormick Raises Quarterly Dividend: A Look at Its Growth Strategy

Nov -19

Source: zacks.com

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McCormick Announces Increase in Quarterly Dividend

Nov -18

Source: prnewswire.com

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Will McCormick Be Able to Sustain Its 2% Organic Growth in 2026?

Nov -18

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Consumer

Expected Growth: 3%

McCormick's 3% consumer segment growth is driven by increasing demand for flavorful and convenient meals, particularly among millennials and Gen Z. The company's strategic acquisitions, such as Frank's RedHot and Cholula, have expanded its portfolio of iconic brands. Additionally, investments in e-commerce and digital marketing have enhanced customer engagement and accessibility.

Flavor Solutions

Expected Growth: 3%

McCormick's Flavor Solutions segment growth is driven by increasing demand for convenient and flavorful meal solutions, expansion in emerging markets, and strategic acquisitions. Additionally, the company's focus on innovation, particularly in clean label and organic products, is resonating with consumers, contributing to the 3% growth rate.

7. Detailed Products

Spices and Seasonings

A wide range of spices, seasonings, and herbs used to add flavor and aroma to various dishes

Flavor Solutions

Customized flavor systems for food manufacturers, restaurants, and foodservice providers

Herbs and Botanicals

Dried and fresh herbs, botanicals, and extracts used in food, beverages, and pharmaceuticals

Meat and Poultry Seasonings

Blended seasonings and marinades for meat, poultry, and seafood

Snack Seasonings

Flavorings and seasonings for snack foods, such as potato chips, crackers, and nuts

Baking Products

Baking spices, flavorings, and ingredients for baked goods and desserts

Flavor Enhancers

Natural and artificial flavor enhancers for food and beverages

8. McCormick & Company, Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for McCormick & Company, Incorporated is medium due to the presence of alternative spice and seasoning products from other companies.

Bargaining Power Of Customers

The bargaining power of customers for McCormick & Company, Incorporated is low due to the company's strong brand recognition and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers for McCormick & Company, Incorporated is medium due to the company's dependence on a few large suppliers for raw materials.

Threat Of New Entrants

The threat of new entrants for McCormick & Company, Incorporated is low due to the high barriers to entry in the spice and seasoning industry.

Intensity Of Rivalry

The intensity of rivalry for McCormick & Company, Incorporated is high due to the presence of several large competitors in the spice and seasoning industry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 47.57%
Debt Cost 5.80%
Equity Weight 52.43%
Equity Cost 7.54%
WACC 6.71%
Leverage 90.72%

11. Quality Control: McCormick & Company, Incorporated passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Lancaster Colony

A-Score: 5.7/10

Value: 3.6

Growth: 5.9

Quality: 7.1

Yield: 4.0

Momentum: 4.0

Volatility: 9.3

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Hormel Foods

A-Score: 5.3/10

Value: 5.8

Growth: 4.0

Quality: 5.5

Yield: 7.0

Momentum: 1.0

Volatility: 8.3

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McCormick

A-Score: 5.0/10

Value: 3.3

Growth: 4.2

Quality: 6.1

Yield: 5.0

Momentum: 2.5

Volatility: 9.0

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Simply Good Foods

A-Score: 4.2/10

Value: 5.6

Growth: 5.4

Quality: 6.6

Yield: 0.0

Momentum: 1.0

Volatility: 6.7

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Freshpet

A-Score: 3.3/10

Value: 2.1

Growth: 9.1

Quality: 4.2

Yield: 0.0

Momentum: 0.5

Volatility: 4.0

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BellRing Brands

A-Score: 3.1/10

Value: 5.4

Growth: 2.7

Quality: 6.1

Yield: 0.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

63.3$

Current Price

63.3$

Potential

-0.00%

Expected Cash-Flows