Financial Data and Key Metrics Changes - Total organic sales increased by 2% in the third quarter, marking five consecutive quarters of volume-led growth [5][22] - Adjusted gross profit margin decreased by 120 basis points due to higher commodity costs and tariffs [24] - Adjusted earnings per share for the third quarter was $0.85, an increase of 2% compared to the previous year [28] Business Line Data and Key Metrics Changes - Consumer segment organic sales grew by 3%, driven primarily by volume and mix, with minimal pricing benefit [22] - Flavor Solutions segment organic sales increased by 1%, with a 2% price contribution but flat volume and mix [23] - In the Americas, Consumer organic sales grew by 3%, while in EMEA, it grew by 4% [22] Market Data and Key Metrics Changes - In Asia-Pacific, Consumer organic sales decreased by 1%, primarily due to softness in the food service business in China [22] - Flavor Solutions in Asia-Pacific saw a 6% increase in organic sales, driven by QSR customer promotions [24] - QSR trends in EMEA began to stabilize, marking an improvement relative to recent periods [7] Company Strategy and Development Direction - The company remains committed to delivering volume growth and investing in brands, technology, and digital transformation [9][10] - Strategic pricing and ongoing innovation are key components of the company's approach to offset rising costs [10][31] - The company is focused on maintaining a consumer-centric strategy while adapting to market dynamics [11][39] Management's Comments on Operating Environment and Future Outlook - The management noted that the environment remains challenging, with continued pressure expected into 2026 [7][8] - There is confidence in a gradual recovery in the China Consumer segment for 2025 [15] - The company plans to offset tariff impacts through productivity savings and alternative sourcing [30][31] Other Important Information - The company expects to maintain a balanced use of cash, funding growth investments while returning cash to shareholders [29] - Tariff exposure for 2025 is now expected to be approximately $70 million, up from previous estimates [30] - The company is implementing targeted tariff pricing and monitoring elasticities to inform future plans [31] Q&A Session Summary Question: Visibility on positive volume outcome in Consumer segment - Management acknowledged a deceleration in overall food unit growth but remains confident in maintaining volume momentum through strategic pricing and innovation [44][46] Question: Mitigation opportunities for inflation and tariffs in 2026 - Management indicated that while it is early to predict exact impacts, robust mitigation plans are in place to lessen the impact of tariffs and inflation [50][52] Question: Clarification on cost inflation guidance - Management explained that increased commodity costs and new tariffs were the primary drivers for the revised guidance [57][60] Question: Gross margin expectations for Q4 - Management confirmed that gross margin is expected to improve in Q4, with a focus on mitigating costs through various strategies [61][62] Question: Reformulation activity and its impact - Management noted increased reformulation activity among customers, particularly in response to consumer concerns about additives [77][80] Question: Acquisition strategy - Management reiterated a focus on both bolt-on and transformative opportunities, particularly in flavor-related categories [82]

Financial Data and Key Metrics Changes - Total organic sales increased by 2% in Q3 2025, marking five consecutive quarters of volume-led growth [5][22] - Adjusted gross profit margin decreased by 120 basis points due to higher commodity costs and tariffs [24][25] - Adjusted earnings per share for Q3 2025 was $0.85, a 2% increase compared to the previous year [27][36] Business Line Data and Key Metrics Changes - Consumer segment organic sales grew by 3%, driven primarily by volume and mix, with minimal pricing benefit [22] - Flavor Solutions segment organic sales increased by 1%, with a 2% price contribution but flat volume [23] - In the Americas, Flavor Solutions' organic sales rose by 1%, reflecting a strong performance with faster-growing flavor customers [23] Market Data and Key Metrics Changes - Consumer organic sales in the Asia-Pacific region decreased by 1%, primarily due to softness in the food service business in China [22] - EMEA consumer organic sales grew by 4%, driven by a 1% increase in volume and a 3% increase in price [22] - QSR trends in EMEA began to stabilize, marking an improvement relative to recent periods [6] Company Strategy and Development Direction - The company remains committed to delivering volume growth and investing in brands, technology, and digital transformation [9][10] - Strategic pricing and ongoing innovation are key components of the company's approach to mitigate rising costs [10][30] - The company is focused on maintaining a balanced use of cash, funding growth investments while returning cash to shareholders [28] Management's Comments on Operating Environment and Future Outlook - The management noted that the consumer environment remains challenging, with low to middle-income households adapting their shopping behaviors [7] - There is confidence in a gradual recovery in the China consumer market for 2025 [5][15] - The company expects to offset most of the tariff impact through productivity savings and alternative sourcing [30] Other Important Information - The company revised its profitability outlook to the low end of the range due to rising commodity costs and tariffs [10][31] - Total gross annualized tariff exposure is now approximately $140 million, up from $90 million previously [29] - The company plans to implement targeted tariff pricing and monitor elasticities to inform future plans [30] Q&A Session Summary Question: Visibility on positive volume outcome in the consumer segment - Management acknowledged a deceleration in volume growth but emphasized strong sales growth driven by volume and innovation [41][42] Question: Mitigation opportunities for further inflation and tariffs in 2026 - Management indicated that it is early to predict the exact impact of tariffs for 2026 but expressed confidence in current mitigation plans [46][48] Question: Clarification on cost inflation guidance - Management explained that increased commodity costs and new tariffs were significant factors in the revised guidance for 2025 [50][52] Question: Expectations on gross margin for Q4 - Management confirmed that gross margin is expected to improve in Q4 as mitigation efforts take effect [53][54] Question: Comments on reformulation activities and private label growth - Management noted increased reformulation activity among high-growth innovators and private label customers, driven by consumer demand for healthier options [66][68] Question: Acquisition strategy and interest in large companies - Management reiterated a focus on both bolt-on and transformative opportunities, emphasizing interest in flavor-related categories [70][72]

Core Viewpoint - McCormick & Company reported third-quarter earnings that exceeded analyst expectations, but shares fell due to concerns over rising costs and a reduced earnings outlook [1][7]. Financial Performance - Adjusted earnings per share for the third quarter were 85 cents, surpassing the consensus estimate of 81 cents [1]. - Quarterly sales reached $1.724 billion, exceeding the expected $1.713 billion [2]. - Net sales increased by 3% in the third quarter, aided by a 1% favorable currency impact [3]. - Consumer segment net sales rose by 4% year-over-year to $973 million, also benefiting from a 1% currency tailwind [3]. - Organic sales grew by 3%, driven by volume and product mix [4]. - Adjusted gross profit decreased by 0.6% year-over-year to $646.1 million, with adjusted gross margin falling by 120 basis points to 37.5% due to higher commodity costs and tariffs [5]. - Adjusted operating income rose to $294 million from $288 million, while adjusted operating margin decreased by 20 basis points to 17% [5]. - The company ended the quarter with cash and equivalents of $94.9 million, and operating cash flow for the nine months ending August 31, 2025, was $420.2 million, down from $463.2 million in the previous year [6]. Outlook - McCormick & Company revised its full-year 2025 adjusted EPS outlook to a range of $3.00–$3.05, down from $3.03–$3.08, compared to the consensus estimate of $3.04 [7]. - The company maintained its guidance for constant-currency net sales growth of 1%–3% [7]. - The CEO emphasized ongoing investments in growth plans and cost-saving initiatives to enhance resilience amid rising inflation from commodity costs and tariffs [7].

Core Insights - McCormick (MKC) reported quarterly earnings of $0.85 per share, exceeding the Zacks Consensus Estimate of $0.81 per share, and showing a slight increase from $0.83 per share a year ago, resulting in an earnings surprise of +4.94% [1] - The company achieved revenues of $1.72 billion for the quarter ended August 2025, surpassing the Zacks Consensus Estimate by 0.60% and reflecting a year-over-year increase from $1.68 billion [2] - McCormick has outperformed consensus EPS estimates three times over the last four quarters and has topped consensus revenue estimates two times in the same period [2] Earnings Outlook - The future performance of McCormick's stock will largely depend on management's commentary during the earnings call and the sustainability of the stock's immediate price movement based on the recently released numbers [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.93 on revenues of $1.84 billion, while the estimate for the current fiscal year is $3.04 on revenues of $6.82 billion [7] Industry Context - The Zacks Industry Rank indicates that the Food - Miscellaneous sector, to which McCormick belongs, is currently in the bottom 25% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact McCormick's stock performance [5][6]

Core Insights - McCormick reported third-quarter sales and profit that exceeded expectations, driven by strong demand for its premium spices and seasonings despite ongoing macroeconomic uncertainties [1] Company Performance - The company demonstrated resilience in its sales performance, indicating a robust consumer preference for higher-priced products [1] Market Context - The results come amid a backdrop of macroeconomic uncertainty, suggesting that consumers are still willing to invest in quality food products [1]

Brendan Foley Chairman, President and Chief Executive Officer 3rd Quarter 2025 McCormick & Company, Inc. Business Update, Financial Results, and Outlook | October 7, 2025 The following slides accompany an October 7, 2025 earnings release conference call. This information should be read in conjunction with the press release issued on that date. Actual results could differ materially from those projected in the forward-looking statements. The Company undertakes no obligation to update or revise publicly any f ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) McCormick achieved volume-led growth in Q3 2025, with increased net sales and operating income, while updating its FY2025 outlook due to rising costs and tariffs [CEO Remarks](index=1&type=section&id=CEO%20Remarks) McCormick's Chairman, President, and CEO, Brendan M. Foley, highlighted the fifth consecutive quarter of volume-led growth in Q3 2025, driven by brand investments, expanded distribution, and innovation. Despite gross margin pressure from rising costs and tariffs, operating profit grew due to effective cost savings initiatives. The company remains confident in its ability to capture flavor demand and achieve its updated 2025 outlook, emphasizing employee contributions and a commitment to long-term growth. - Achieved **fifth consecutive quarter** of volume-led growth in Q3 2025, reflecting differentiation and investments in brands, distribution, and innovation[2](index=2&type=chunk) - Gross margin was pressured by rising commodity costs and tariffs due to the dynamic global trade environment[2](index=2&type=chunk) - Operating profit growth was driven by effective execution of cost savings initiatives, positioning McCormick for sustained long-term growth[2](index=2&type=chunk) [Q3 2025 Financial Highlights](index=1&type=section&id=Q3%202025%20Highlights) McCormick reported a 3% increase in net sales for the third quarter of 2025, with organic sales growing 2% primarily due to volume. Operating income and earnings per share also saw slight increases compared to the prior year, with adjusted figures showing stronger growth. Q3 2025 Financial Highlights | Metric | Q3 2025 (As Reported) | Q3 2024 (As Reported) | % Change (%) | Q3 2025 (Adjusted) | Q3 2024 (Adjusted) | % Change (%) | | :-------------------- | :-------------------- | :-------------------- | :------- | :----------------- | :----------------- | :------- | | Net Sales | - | - | 3% | - | - | - | | Organic Sales Growth | - | - | 2% | - | - | - | | Operating Income | $289 million | $287 million | 0.8% | $294 million | $288 million | 1.8% | | Earnings per Share | $0.84 | $0.83 | 1.2% | $0.85 | $0.83 | 2.4% | [FY 2025 Outlook Update](index=1&type=section&id=FY%202025%20Outlook%20Update) For fiscal year 2025, McCormick reaffirmed its sales growth outlook but updated its operating income and earnings per share outlook to account for rising commodity costs and incremental tariffs. - Reaffirmed sales growth outlook for fiscal year 2025[3](index=3&type=chunk) - Updated operating income and earnings per share outlook for fiscal year 2025 to reflect rising commodity costs and incremental tariffs[3](index=3&type=chunk) [Third Quarter 2025 Financial Results](index=2&type=section&id=Third%20Quarter%202025%20Financial%20Results) McCormick reported increased net sales driven by volume, though gross profit margins contracted due to higher costs, while operating income improved from SG&A efficiencies [Sales Performance](index=2&type=section&id=Sales%20Performance) McCormick's net sales increased 3% in the third quarter of 2025, with organic sales growing 2% driven by volume. The Consumer segment showed stronger growth, while the Flavor Solutions segment also contributed positively, primarily through pricing. Third Quarter 2025 Sales Metrics | Metric | As Reported % Change (%) | Volume/Mix (%) | Price (%) | Organic % Change (%) | | :-------------------- | :------------------- | :--------- | :---- | :--------------- | | Total Net Sales | 2.7 % | 1.2 % | 0.6 % | 1.8 % | | Total Consumer | 3.8 % | 2.2 % | 0.4 % | 2.6 % | | Total Flavor Solutions| 1.2 % | (0.3)% | 0.9 % | 0.6 % | - Net sales increased **3%** in Q3 2025, including a **1%** favorable impact from currency. Organic sales increased **2%**, driven by volume (more than **1%**) and price (**1%**)[7](index=7&type=chunk) - Consumer segment net sales increased **4%** (**3%** organic) to **$973 million**, driven by volume and product mix. Flavor Solutions segment net sales increased **1%** (**1%** organic) to **$752 million**, driven by price[11](index=11&type=chunk) [Profitability Analysis](index=2&type=section&id=Profitability%20Analysis) Gross profit decreased slightly, with margins contracting due to higher commodity costs and tariffs, partially offset by cost savings. Operating income and adjusted operating income increased, primarily driven by decreased SG&A expenses and CCI program savings, despite lower gross margin and increased investments. Third Quarter 2025 Profitability Metrics | Metric | Q3 2025 (As Reported) (million USD) | Q3 2024 (As Reported) (million USD) | % Change (%) | Q3 2025 (Adjusted) (million USD) | Q3 2024 (Adjusted) (million USD) | % Change (%) | | :-------------------- | :-------------------- | :-------------------- | :------- | :----------------- | :----------------- | :------- | | Gross profit | $645.1 | $649.9 | (0.7)% | $646.1 | $649.9 | (0.6)% | | Gross profit margin | 37.4 % | 38.7 % | (130) bps| 37.5 % | 38.7 % | (120) bps| | Operating income | $288.7 | $286.5 | 0.8% | $293.6 | $288.4 | 1.8% | | Operating income margin| 16.7 % | 17.1 % | (40) bps | 17.0 % | 17.2 % | (20) bps | | Net income | $225.5 | $223.1 | 1.1% | $229.1 | $224.4 | 2.1% | | Earnings per share - diluted| $0.84 | $0.83 | 1.2% | $0.85 | $0.83 | 2.4% | - Gross profit decreased by **$5 million**, and gross profit margin contracted **130 basis points** (**120 bps** adjusted) due to higher commodity costs, tariffs, and capacity costs, partially offset by CCI program cost savings[8](index=8&type=chunk) - Adjusted operating income increased **2%** in constant currency, driven by decreased SG&A expenses (lower employee benefits, CCI savings, streamlining) partially offset by lower gross margin, brand marketing, and technology investments[9](index=9&type=chunk) - Consumer segment adjusted operating income increased **4%** (**3%** in constant currency) due to higher sales and decreased SG&A, partially offset by increased commodity costs and tariffs. Flavor Solutions segment adjusted operating income decreased **2%** (**2%** in constant currency) due to higher commodity costs and tariffs, partially offset by pricing and decreased SG&A[12](index=12&type=chunk) [Fiscal Year 2025 Financial Outlook](index=3&type=section&id=Fiscal%20Year%202025%20Financial%20Outlook) McCormick reaffirmed its sales growth outlook for FY2025 but adjusted operating income and EPS guidance to reflect commodity costs and tariffs, while anticipating strong cash flow [Updated Guidance](index=4&type=section&id=Updated%20Guidance) McCormick updated its fiscal year 2025 guidance for operating income and EPS, reflecting the impact of rising commodity costs and incremental tariffs. Net sales growth outlook remains unchanged. Fiscal Year 2025 Financial Guidance Update | Metric | Current Guide (Oct 2025) Reported | Current Guide (Oct 2025) Constant Currency | Prior Guide (June 2025) Reported | Prior Guide (June 2025) Constant Currency | | :-------------------- | :-------------------------------- | :--------------------------------------- | :------------------------------- | :-------------------------------------- | | Net sales growth | 0% to 2% (%) | 1% to 3% (%) | 0% to 2% (%) | 1% to 3% (%) | | Operating income | 1% to 3% (%) | - (%) | 2% to 4% (%) | - (%) | | Adjusted operating income| 2% to 4% (%) | 3% to 5% (%) | 3% to 5% (%) | 4% to 6% (%) | | Earnings per share (EPS)| $2.95 to $3.00 (1% to 3%) | - | $2.98 to $3.03 (2% to 4%) | - | | Adjusted EPS | $3.00 to $3.05 (2% to 4%) | 4% to 6% | $3.03 to $3.08 (3% to 5%) | 5% to 7% | - Foreign currency rates are expected to unfavorably impact net sales by **1%**, adjusted operating income by **1%**, and adjusted earnings per share by **2%**[16](index=16&type=chunk) [Key Factors and Expectations](index=4&type=section&id=Key%20Factors%20and%20Expectations) The 2025 outlook incorporates mitigation plans for tariffs and anticipates continued volume-led growth, gradual improvement in China Consumer, and gross margin pressure from commodity costs and tariffs. SG&A benefits from the CCI program are expected to be partially offset by growth investments. - Outlook reflects mitigation plans for tariffs currently in place, which have increased since August 1, 2025. Mitigation actions include sourcing plans, cost savings, and revenue growth management[14](index=14&type=chunk) - Expectations include total volume-led growth, gradual improvement in China Consumer, and gross margin expansion impacted by increased commodity costs and tariffs[17](index=17&type=chunk) - SG&A benefits from the CCI program (including streamlining initiatives) are anticipated, partially offset by growth investments in brand marketing and digital. Special charges of **$20 million** are expected, primarily for organizational and streamlining actions[17](index=17&type=chunk) [Cash Flow and Shareholder Returns](index=5&type=section&id=Cash%20Flow%20and%20Shareholder%20Returns) For fiscal 2025, McCormick expects strong cash flow driven by profit and working capital initiatives, with a significant portion anticipated to be returned to shareholders through dividends. - Strong cash flow is expected for fiscal 2025, driven by profit and working capital initiatives[18](index=18&type=chunk) - A significant portion of cash flow is anticipated to be returned to shareholders through dividends[18](index=18&type=chunk) [Non-GAAP Financial Measures Reconciliation](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) McCormick uses non-GAAP measures to provide clearer insights into operational performance by excluding special charges, acquisitions, and foreign currency impacts [Definition and Purpose](index=5&type=section&id=Definition%20and%20Purpose) McCormick utilizes non-GAAP financial measures such as organic net sales, adjusted gross profit, adjusted operating income, and adjusted EPS to complement GAAP results. These measures exclude special charges, acquisitions/divestitures, and foreign currency impacts to provide enhanced comparability to prior periods and better insight into underlying operational performance and trends. - Non-GAAP financial measures (e.g., organic net sales, adjusted gross profit, adjusted operating income, adjusted EPS) are used to complement GAAP results[19](index=19&type=chunk) - These measures exclude special charges (expenses for cost reduction, process improvement, competitiveness, and transaction/integration costs), acquisitions/divestitures, and foreign currency impacts[19](index=19&type=chunk)[25](index=25&type=chunk) - The purpose is to provide additional information for enhanced comparisons to prior periods, facilitate future projections, measure ongoing profitability, and analyze business performance and trends[20](index=20&type=chunk) [Q3 and YTD Reconciliation Tables](index=6&type=section&id=Q3%20and%20YTD%20Reconciliation%20Tables) The provided tables reconcile GAAP financial measures to their adjusted non-GAAP counterparts for the three and nine months ended August 31, 2025, and 2024. Key adjustments include special charges impacting gross profit, operating income, income tax expense, and net income. Reconciliation of GAAP to Adjusted Financial Measures (Q3 and YTD) | Metric | Three Months Ended 8/31/2025 (million USD) | Three Months Ended 8/31/2024 (million USD) | Nine Months Ended 8/31/2025 (million USD) | Nine Months Ended 8/31/2024 (million USD) | | :-------------------------------- | :--------------------------- | :--------------------------- | :-------------------------- | :-------------------------- | | Gross profit (GAAP) | $645.1 | $649.9 | $1,871.9 | $1,868.8 | | Impact of special charges | $1.0 | $0.0 | $1.0 | $0.0 | | Adjusted gross profit | $646.1 | $649.9 | $1,872.9 | $1,868.8 | | Operating income (GAAP) | $288.7 | $286.5 | $759.7 | $754.1 | | Impact of special charges | $4.9 | $1.9 | $17.7 | $7.9 | | Adjusted operating income | $293.6 | $288.4 | $777.4 | $762.0 | | Net income (GAAP) | $225.5 | $223.1 | $562.8 | $573.3 | | Impact of special charges | $3.6 | $1.3 | $13.4 | $5.8 | | Adjusted net income | $229.1 | $224.4 | $576.2 | $579.1 | | Earnings per share - diluted (GAAP)| 0.84 USD | 0.83 USD | 2.09 USD | 2.13 USD | | Impact of special charges | 0.01 USD | 0.00 USD | 0.05 USD | 0.02 USD | | Adjusted earnings per share - diluted| 0.85 USD | 0.83 USD | 2.14 USD | 2.15 USD | [Constant Currency and Organic Growth Rates](index=7&type=section&id=Constant%20Currency%20and%20Organic%20Growth%20Rates) McCormick provides constant currency and organic growth rates to isolate the impact of foreign exchange fluctuations and other non-operational factors. For Q3 2025, total net sales grew 1.8% on a constant currency and organic basis, with varying performance across segments and regions. Year-to-date, total net sales also showed a 1.8% organic growth. - Constant currency basis excludes the translation effects of changes in foreign currency exchange rates to provide insight into underlying operational performance[24](index=24&type=chunk) - Organic net sales growth rates exclude the effect of foreign currency exchange rate fluctuations, acquisitions, and divestitures to show underlying sales performance[25](index=25&type=chunk) Percentage Change on Constant Currency and Organic Basis (Q3 2025) | Metric | Percentage Change as Reported (%) | Impact of Foreign Currency Exchange (%) | Percentage Change on a Constant Currency and Organic Basis (%) | | :-------------------- | :---------------------------- | :---------------------------------- | :--------------------------------------------------------- | | Total Net Sales | 2.7 % | 0.9 % | 1.8 % | | Total Consumer | 3.8 % | 1.2 % | 2.6 % | | Americas | 2.7 % | 0.0 % | 2.7 % | | EMEA | 11.4 % | 7.0 % | 4.4 % | | APAC | 0.0 % | 0.8 % | (0.8)% | | Total Flavor Solutions| 1.2 % | 0.6 % | 0.6 % | | Americas | 0.1 % | (0.8)% | 0.9 % | | EMEA | 2.1 % | 5.2 % | (3.1)% | | APAC | 7.7 % | 1.4 % | 6.3 % | Percentage Change on Constant Currency Basis (Adjusted Operating Income, Q3 2025) | Segment | Percentage Change as Reported (%) | Impact of Foreign Currency Exchange (%) | Percentage Change on Constant Currency Basis (%) | | :-------------------- | :---------------------------- | :---------------------------------- | :------------------------------------------- | | Consumer segment | 3.7 % | 0.5 % | 3.2 % | | Flavor Solutions segment| (1.8)% | (0.2)% | (1.6)% | | Total adjusted operating income| 1.8 % | 0.2 % | 1.6 % | [FY2025 Outlook Reconciliation](index=9&type=section&id=FY2025%20Outlook%20Reconciliation) The fiscal year 2025 projections for net sales, adjusted operating income, and adjusted earnings per share are also presented on a constant currency basis, with foreign currency exchange expected to have an unfavorable impact across these metrics. The reconciliation of estimated GAAP EPS to adjusted EPS for 2025 is also provided. FY2025 Projection on Constant Currency Basis | Metric | Projection for the Year Ending November 30, 2025 (%) | | :------------------------------------------------ | :----------------------------------------------- | | Percentage change in net sales | 0% to 2% | | Impact of unfavorable foreign currency exchange | 1 % | | Percentage change in net sales in constant currency| 1% to 3% | | Percentage change in adjusted operating income | 2% to 4% | | Impact of unfavorable foreign currency exchange | 1 % | | Percentage change in adjusted operating income in constant currency| 3% to 5% | | Percentage change in adjusted earnings per share diluted| 2% to 4% | | Impact of unfavorable foreign currency exchange | 2 % | | Percentage change in adjusted earnings per share in constant currency - diluted| 4% to 6% | Reconciliation of Estimated EPS to Adjusted EPS (FY2025) | Metric | 2025 Projection (USD) | 11/30/24 (USD) | | :-------------------------- | :-------------- | :------- | | Earnings per share - diluted| 2.95 to 3.00 | 2.92 | | Impact of special charges | 0.05 | 0.03 | | Adjusted earnings per share - diluted| 3.00 to 3.05 | 2.95 | [Company Information](index=10&type=section&id=Company%20Information) McCormick is a global flavor leader operating in two segments, with its forward-looking statements highlighting potential risks and uncertainties affecting future performance [About McCormick](index=11&type=section&id=About%20McCormick) McCormick & Company, Incorporated is a global flavor leader with over $6.7 billion in annual sales across 150 countries. It manufactures and distributes herbs, spices, seasonings, condiments, and flavors to various food industry sectors. Operating in two complementary segments, Consumer and Flavor Solutions, McCormick leverages its portfolio and insights to capitalize on consumer demand for flavor, guided by its purpose to Stand Together for the Future of Flavor. - McCormick & Company is a global leader in flavor, with over **$6.7 billion** in annual sales across **150** countries and territories[37](index=37&type=chunk) - The company manufactures, markets, and distributes herbs, spices, seasonings, condiments, and flavors to retailers, food manufacturers, and foodservice businesses[37](index=37&type=chunk) - Operates in two segments: Consumer and Flavor Solutions, which complement each other and drive sustainable growth[37](index=37&type=chunk)[38](index=38&type=chunk) [Forward-Looking Statements](index=10&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding expected performance, sales growth, earnings, cost savings, and other financial and operational aspects. These statements are based on management's current views and assumptions, involving risks and uncertainties that could materially affect actual results, and the company undertakes no obligation to update them. - The release contains "forward-looking statements" concerning expected performance, including net sales, gross margin, earnings, cost savings, and the impact of foreign currency rates[33](index=33&type=chunk) - These statements are based on management's current views and assumptions and involve risks and uncertainties that could significantly affect expected results[34](index=34&type=chunk) - Risks include general economic conditions, consumer spending, supply chain issues, commodity prices, tariffs, competition, and the ability to drive productivity improvements[33](index=33&type=chunk)[35](index=35&type=chunk) [Financial Statements (Unaudited)](index=13&type=section&id=Financial%20Statements%20(Unaudited)) Unaudited consolidated financial statements for Q3 and YTD 2025 detail the company's income, balance sheet, and cash flows, showing key financial positions and performance [Consolidated Income Statement](index=13&type=section&id=Consolidated%20Income%20Statement) The unaudited consolidated income statement for the three and nine months ended August 31, 2025, and 2024, shows net sales, cost of goods sold, gross profit, operating income, and net income, along with earnings per share. Consolidated Income Statement (Unaudited) | Metric | Three months ended Aug 31, 2025 (million USD) | Three months ended Aug 31, 2024 (million USD) | Nine months ended Aug 31, 2025 (million USD) | Nine months ended Aug 31, 2024 (million USD) | | :------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net sales | $1,724.9 | $1,679.8 | $4,989.9 | $4,925.7 | | Cost of goods sold | $1,079.8 | $1,029.9 | $3,118.0 | $3,056.9 | | Gross profit | $645.1 | $649.9 | $1,871.9 | $1,868.8 | | Gross profit margin | 37.4 % | 38.7 % | 37.5 % | 37.9 % | | Selling, general and administrative expense| $352.5 | $361.5 | $1,095.5 | $1,106.8 | | Special charges | $3.9 | $1.9 | $16.7 | $7.9 | | Operating income | $288.7 | $286.5 | $759.7 | $754.1 | | Interest expense | $50.2 | $53.5 | $149.7 | $156.7 | | Other income, net | $9.4 | $13.2 | $29.0 | $36.7 | | Income from consolidated operations before income taxes| $247.9 | $246.2 | $639.0 | $634.1 | | Income tax expense | $39.3 | $41.0 | $130.2 | $116.8 | | Net income from consolidated operations| $208.6 | $205.2 | $508.8 | $517.3 | | Income from unconsolidated operations | $16.9 | $17.9 | $54.0 | $56.0 | | Net income | $225.5 | $223.1 | $562.8 | $573.3 | | Earnings per share - diluted | 0.84 USD | 0.83 USD | 2.09 USD | 2.13 USD | [Consolidated Balance Sheet](index=14&type=section&id=Consolidated%20Balance%20Sheet) The unaudited consolidated balance sheet as of August 31, 2025, and November 30, 2024, presents the company's assets, liabilities, and shareholders' equity. Key changes include an increase in total assets and shareholders' equity, while total liabilities slightly decreased. Consolidated Balance Sheet (Unaudited) | Metric | August 31, 2025 (million USD) | November 30, 2024 (million USD) | | :------------------------------------- | :-------------- | :---------------- | | **Assets** | | | | Cash and cash equivalents | $94.9 | $186.1 | | Trade accounts receivable, net | $668.7 | $587.4 | | Inventories, net | $1,323.6 | $1,239.9 | | Total current assets | $2,224.0 | $2,139.0 | | Property, plant and equipment, net | $1,419.8 | $1,413.0 | | Goodwill | $5,314.2 | $5,227.5 | | Intangible assets, net | $3,302.5 | $3,318.9 | | Total assets | $13,247.0 | $13,070.3 | | **Liabilities** | | | | Short-term borrowings and current portion of long-term debt| $1,253.4 | $748.3 | | Trade accounts payable | $1,196.8 | $1,238.1 | | Total current liabilities | $3,120.0 | $2,882.8 | | Long-term debt | $3,104.9 | $3,593.6 | | Total liabilities | $7,463.4 | $7,753.5 | | **Shareholders' equity** | | | | Total McCormick shareholders' equity | $5,752.8 | $5,291.0 | | Total shareholders' equity | $5,783.6 | $5,316.8 | | Total liabilities and shareholders' equity| $13,247.0 | $13,070.3 | [Consolidated Cash Flow Statement](index=15&type=section&id=Consolidated%20Cash%20Flow%20Statement) The unaudited consolidated cash flow statement for the nine months ended August 31, 2025, and 2024, details cash flows from operating, investing, and financing activities. Net cash provided by operating activities decreased, while net cash used in investing activities also decreased. Net cash used in financing activities significantly increased. Consolidated Cash Flow Statement (Unaudited) | Metric | Nine Months Ended Aug 31, 2025 (million USD) | Nine Months Ended Aug 31, 2024 (million USD) | | :------------------------------------- | :----------------------------- | :----------------------------- | | Net cash flow provided by operating activities| $420.2 | $463.2 | | Net cash flow used in investing activities| ($172.2) | ($189.1) | | Net cash flow used in financing activities| ($378.3) | ($205.9) | | Effect of exchange rate changes on cash and cash equivalents| $39.1 | ($34.0) | | Increase (decrease) in cash and cash equivalents| ($91.2) | $34.2 | | Cash and cash equivalents at end of period| $94.9 | $200.8 | - Net cash flow provided by operating activities decreased from **$463.2 million** in 2024 to **$420.2 million** in 2025[43](index=43&type=chunk) - Net cash flow used in financing activities significantly increased from **$205.9 million** in 2024 to **$378.3 million** in 2025, primarily due to higher dividends paid and common stock acquired by purchase[43](index=43&type=chunk)

Core Insights - McCormick & Company reported a 3% increase in net sales for Q3 2025, driven by a 2% organic sales growth, with a favorable currency impact of 1% [5][6][13] - The company reaffirmed its sales growth outlook for fiscal 2025 while updating its operating income and earnings per share outlook due to rising commodity costs and tariffs [6][10][11] Financial Performance - Total net sales for Q3 2025 reached $1.725 billion, compared to $1.680 billion in Q3 2024, reflecting a 3% year-over-year increase [36] - Gross profit decreased by $5 million to $645.1 million, with a gross profit margin of 37.4%, down 130 basis points from the previous year [4][7] - Operating income for Q3 2025 was $288.7 million, a slight increase of 0.8% from $286.5 million in Q3 2024 [4][8] - Earnings per share (EPS) for Q3 2025 was $0.84, up from $0.83 in the same period last year, while adjusted EPS was $0.85 compared to $0.83 [6][8] Segment Performance - The Consumer segment saw a 4% increase in net sales to $973 million, with organic sales growth of 3% driven by volume and product mix [13] - The Flavor Solutions segment experienced a 1% increase in net sales to $752 million, with organic sales growth of 1% primarily from price increases [13][14] Outlook for Fiscal Year 2025 - The company expects net sales growth of 0% to 2% and adjusted operating income growth of 2% to 4% for fiscal 2025, with adjusted EPS projected to be between $3.00 and $3.05 [11][27] - McCormick's outlook incorporates the impact of current tariffs and anticipates a 1% unfavorable impact from foreign currency exchange rates [10][12] Strategic Initiatives - McCormick continues to invest in its Comprehensive Continuous Improvement (CCI) program, which aims to drive growth while managing costs effectively [9][15] - The company is focused on adapting to consumer trends and maintaining strong demand for flavor products across various channels [2][6]

Economic Policy and Market Sentiment - Kansas City Fed President Jeff Schmid emphasized the need for continued monetary policy measures to combat persistently high inflation, suggesting that current interest rates are only "slightly restrictive" [1] - Mark Hackett from Nationwide noted a "self-fulfilling rally" in the market, driven by strong earnings and investor confidence despite a lack of data and ongoing government shutdown [2] - Wall Street's main stock indexes ended mixed, with the S&P 500 and Nasdaq 100 reaching new record highs, indicating strong market momentum [2] Company Performance and Earnings - Advanced Micro Devices (AMD) surged over +23% after announcing a partnership with OpenAI, which could generate tens of billions in new revenue [2] - Tesla (TSLA) rose more than +5% following a teaser for an upcoming event, reflecting positive market sentiment [2] - Comerica (CMA) increased over +13% after Fifth Third Bancorp agreed to acquire the regional lender for approximately $10.9 billion in stock [2] - McCormick & Company (MKC) is set to report its quarterly results, highlighting ongoing interest in the spice and condiments sector [7] Market Trends and Economic Indicators - U.S. rate futures indicate a 92.5% probability of a 25 basis point rate cut at the Fed's October meeting, reflecting market expectations for monetary easing [4] - Japan's household spending rose +0.6% month-over-month and +2.3% year-over-year in August, exceeding expectations and suggesting consumer optimism [12] - Germany's factory orders unexpectedly fell -0.8% month-over-month in August, indicating challenges in international demand [9] International Developments - President Trump is scheduled to meet with Canadian Prime Minister Mark Carney to discuss tariff relief in key sectors, including autos and steel [5] - The Euro Stoxx 50 Index is down -0.04% amid political turmoil in France, with mining and healthcare stocks underperforming [8]

Market Sentiment - The CNN Money Fear and Greed index improved to a reading of 56.7, indicating a shift to the "Greed" zone from a previous reading of 53.7 [5] - U.S. stocks mostly settled higher, with the Nasdaq Composite gaining over 150 points and both the S&P 500 and Nasdaq Composite reaching record highs [1] Company Performance - Advanced Micro Devices Inc. (NASDAQ:AMD) shares surged approximately 24% following the announcement of a multi-year partnership with OpenAI to deploy 6 Gigawatts of AMD GPUs, along with issuing OpenAI a warrant for up to 160 million shares [2] - Most sectors on the S&P 500 closed positively, with utilities, consumer discretionary, and communication services stocks showing the largest gains, while consumer staples and real estate stocks declined [3] Upcoming Earnings - Investors are anticipating earnings results from McCormick & Company Inc. (NYSE:MKC) and Penguin Solutions Inc. (NASDAQ:PENG) [4]