McCormick & Company shares were trading about 2.9% higher in premarket activity on Thursday after the spice and flavor specialist posted quarterly results that beat consensus forecasts.
The company reported adjusted earnings per share of $0.80, above the consensus estimate of $0.70. Revenue for the quarter reached $1.94 billion, topping the $1.91 billion estimate and representing a 16.7% increase from the same period a year earlier. Organic sales rose 1.7%, with the company attributing that gain primarily to pricing.
McCormick also reaffirmed its fiscal 2026 adjusted EPS outlook of $3.05 to $3.13, with a midpoint of $3.09 that aligns with the analyst consensus. For the full fiscal year, the company is projecting net sales growth of 13% to 17%, a range that includes an anticipated 11% to 13% contribution from the recently acquired McCormick de Mexico business.
Brendan M. Foley, Chairman, President, and CEO, commented on the quarter: "Second quarter results demonstrate the continued strength and resilience of our business in a dynamic operating environment. Total organic growth was driven by accelerated momentum in Flavor Solutions, with gains across Flavors and Branded Foodservice customers, highlighting the benefits of our diversified flavor focused portfolio."
By business unit, the Consumer segment generated net sales of $1.14 billion, up 22.8% year-over-year. The Flavor Solutions segment posted $794 million in sales, an increase of 8.9% compared with the prior-year period.
Profitability metrics showed notable improvement. Adjusted operating income rose 30.1% to $336 million from $259 million a year earlier. Gross profit margin widened by 270 basis points to 40.2%. McCormick identified several contributors to the margin expansion, including the McCormick de Mexico acquisition, receipt of an IEEPA tariff refund, pricing actions and ongoing cost savings initiatives.
Looking ahead to fiscal 2026, McCormick is guiding for adjusted gross margin expansion of 100 to 120 basis points and expects organic sales growth in the range of 1% to 3%. The company also said it is continuing integration planning related to its proposed combination with Unilever Foods, which was announced in March 2026.
The quarter's performance and the reaffirmed guidance reflect a combination of acquisition-related revenue, price-driven organic growth and improvements to operating margins. These elements were highlighted by management as central to the company meeting its full-year targets.
Context for markets: McCormick's results and guidance have implications for consumer staples and food manufacturing supply chains, with flavor-focused industrial customers and branded foodservice channels specifically cited as sources of demand growth in the quarter.