A strong operating quarter left McCormick's full-year earnings guidance unchanged, so Q4 earnings per share must fall

Impact 4/5 · Guidance · Negative

McCormick holds FY26 EPS guide after a beat, leaving about $0.77 for Q4

Management reaffirmed fiscal 2026 adjusted EPS guidance of $3.05 to $3.13 after adjusted operating income rose 22.1% in the August 2026 quarter. Nine-month adjusted EPS was $2.32, so by our arithmetic the fourth quarter is left with $0.73 to $0.81, about 10% at the midpoint below the $0.86 of adjusted EPS reported for the same quarter a year earlier (22 Jan 2026 release). On 25 June the company had guided the third quarter's adjusted operating income to grow high single to low double digits.

“there are timing of expenses that shifted from Q3 into Q4”— Marcos Gabriel, chief financial officer

Impact 4/5 · Guidance · Negative

McCormick flags more pressure on FY27 margins and EPS; no formal outlook yet

Asked whether cost pressure will last, the finance chief said inflation should continue into next year (his words were "as we go into 2026", speaking about fiscal 2027) and the productivity program would continue too, but he sees more headwinds for margins and earnings per share. FY26 cost inflation is now guided at 6% to 7%, against a mid-single-digit guide on 25 June, then tracking about 6%, and the gross margin gain of 1.0 to 1.2 percentage points is at the high end, with about 0.35 points from tariff refunds, by the finance chief's figure. The CEO said US pricing will not go negative but may add less than this year.

“it's a little bit too early to talk about a formal outlook for 2027”— Marcos Gabriel, chief financial officer

Impact 3/5 · Demand · Negative

McCormick Q3 volume fell 0.3% while price added 2.2%; the Q4 volume guidance softened

Total volume and mix fell 0.3% and price rose 2.2%, so organic growth of 1.9% was all price; Consumer Americas volume fell 2.5%, a smaller decline than the 3.6% fall in the previous quarter. On 25 June the company guided to consumer volume growth in the fourth quarter; on 1 October it spoke of continued improvement and a packaging supply constraint that could cut up to one point from fourth-quarter total company volume growth. The June guide of sequential improvement in the third quarter was met in Consumer Americas. The CEO called it a short-term industry issue.

“we are managing a short-term industry supply constraint on a specific type of packaging material”— Brendan Foley, chief executive officer

Impact 3/5 · Margin · Mixed

McCormick adjusted operating income up 22.1%, adjusted EPS up only 1.2%

Adjusted operating income was $358.5 million against $293.6 million a year ago, yet adjusted EPS was $0.86 against $0.85, held back by a 22.6% adjusted tax rate against 16.1%, higher interest and the minority share of the acquired business. GAAP EPS was $0.36 against $0.84 after $141.5 million of special charges, including a $43.1 million non-cash write-down on a Malaysia pepper-sourcing project. On 25 June the company said it expected to lap a favorable tax rate.

Impact 3/5 · Guidance · Mixed

McCormick met its Unilever Foods September date; services-exit plan due in months

On 25 June McCormick said it would share more on the Unilever Foods operating model, cost synergies, growth plans and transition services by the end of September; it announced the operating model in July and set out growth priorities, the synergy split and a two-year transition-services exit on 9 September. On 1 October its chief financial officer said a more detailed plan for leaving the transition services would come in the next few months, hopefully by the January results.

“more details to come in the next, I would say, few months”— Marcos Gabriel, chief financial officer

Impact 3/5 · Balance sheet · Mixed

McCormick Q3 operating cash flow fell to $168.1M while borrowings rose to $5,018.2M

Operating cash flow was $168.1 million in the August 2026 quarter against $258.8 million a year earlier. Total borrowings were $5,018.2 million, up from $3,996.3 million in November 2025, with 42.1% due within a year against 22.3% then. Most of the rise came with the January purchase of the Mexican business (729.9 million paid in the nine months); since May, borrowings are up 84.7 million, while the company said on 25 June, and again on 1 October, that it would continue to make progress paying down debt ahead of the Unilever Foods close. On the company's own measure, leverage was unchanged from June at about 2.9.

“We continue to expect strong performance in our cash flow from operations for the fiscal year”— Marcos Gabriel, chief financial officer