McCormick Beats Q3 Estimates as Mexico Acquisition and Margin Gains Drive 17% Sales Jump

McCormick reported fiscal third-quarter 2026 results that topped Wall Street expectations on both sales and adjusted profit, sending shares up roughly 3.6% in pre-market trading on October 1. Net sales rose 17.4% year over year to $2.02 billion, beating the analyst consensus of $1.97 billion, with the McCormick de Mexico acquisition contributing approximately 15% of that increase and organic sales growing 1.9%. Adjusted earnings per share came in at $0.86, up about 1.2% from a year earlier and well ahead of the $0.76 consensus estimate.

On a GAAP basis, net income fell sharply to $97.6 million, or $0.36 per share, from $225.5 million, or $0.84 per share, in the year-ago quarter, reflecting special charges tied in part to acquisition costs. Adjusted gross margin expanded 180 basis points to 39.3%, aided by McCormick de Mexico accretion, favorable pricing, and savings from the company's Comprehensive Continuous Improvement program, though higher commodity and freight costs, including the impact of the Middle East conflict, provided some offset. Adjusted operating income rose 22.1% to $358.5 million.

CEO Brendan Foley said the results demonstrate the resilience of the company's flavor-focused business model in a dynamic operating environment. McCormick reiterated its full-year adjusted EPS guidance of $3.09 at the midpoint and said it expects to reach the high end of its 100-120 basis-point gross-margin expansion target for fiscal 2026, even as it raised its expected cost inflation estimate to 6%-7%. The company noted that integration planning for its proposed combination with Unilever Foods is advancing on schedule, though a packaging constraint could trim fourth-quarter volume growth by up to one percentage point.