McCormick Shares Dip as Strong 2026 Forecast Fails to Eclipse Profit Miss
Investors weigh a blockbuster sales outlook, projecting up to 17% growth, against a current-quarter earnings shortfall and shrinking margins.
Shares of McCormick & Company (NYSE: MKC) fell on Tuesday after the spice and flavor giant presented a mixed financial picture: a slight miss on quarterly profits and shrinking margins that overshadowed an otherwise robust sales forecast for fiscal year 2026.
The stock traded down approximately 1.9% to $66.56 in afternoon trading, touching the lower end of its 52-week range. The investor hesitation came despite the company issuing an impressive outlook for fiscal 2026, projecting net sales growth of 13% to 17%.
For its fourth quarter of 2025, McCormick reported revenue of $1.85 billion, which was in line with Wall Street expectations. However, adjusted earnings per share came in at $0.86, a penny shy of the $0.87 consensus estimate. Investors keyed in on the company's gross profit margin, which contracted by 130 basis points from the prior year, a development attributed to rising commodity costs and other inflationary pressures.
The forward-looking guidance was the clear bright spot in the report. The company's double-digit sales growth projection is significantly bolstered by the recent McCormick de Mexico acquisition, which is expected to contribute over $800 million in annual net sales. This move marks a significant expansion of McCormick's footprint in Latin America. In addition to the strong sales forecast, the company anticipates adjusted operating income to grow between 16% and 20% in fiscal 2026, as detailed in its latest earnings release.
In a statement, company leadership expressed confidence in its strategic direction, highlighting brand strength, innovation, and the successful integration of its recent acquisitions as key drivers for long-term, profitable growth. The aggressive forecast suggests that McCormick aims to offset sector-wide headwinds with strategic expansion and market penetration.
Despite the ambitious outlook, the market's immediate reaction underscores investor concerns about near-term profitability in a challenging cost environment. The consumer staples sector has been grappling with persistent inflation, and McCormick's results show it is not immune to these pressures. The decline in gross margin suggests that while the company is successfully growing its top line, the cost of doing so is increasing.
Analysts currently hold a cautious consensus on the stock. Based on data from more than a dozen analysts, the average rating is a "Hold" with a median price target of $77, which suggests a potential upside from current levels if the company can deliver on its long-term promises. The Wall Street Journal noted that the projected annual growth will be a key factor for investors to monitor.
Looking ahead, the market will be closely watching McCormick's ability to manage costs and restore margin growth while integrating its new Mexican operations. The company's performance in the upcoming quarters will be critical to proving that its buoyant future outlook can triumph over present-day economic challenges.