McCormick & Company, Incorporated](https://www.mccormickcorporation.com) posted third-quarter net sales of $2.0 billion, a 17.4% increase versus the year-ago period, with organic growth of 1.9% driven primarily by pricing and the McCormick de Mexico acquisition contributing 14.6 percentage points of the total reported gain. The results are consequential for foodservice and food-manufacturing operators who rely on McCormick's spice, seasoning, and flavor portfolio across both retail and back-of-house channels.
Margin & Profit Story
Gross profit margin expanded 190 basis points year-over-year to 39.3%, aided by the Mexico acquisition, higher net sales, and the company's Comprehensive Continuous Improvement (CCI) cost-savings program — even as commodity and freight costs rose. Adjusted operating income climbed 22.1% to $358.5 million, while the reported operating income figure of $217 million reflected $141.5 million in special charges, including transaction and integration costs tied to the pending Unilever Foods combination and a $43.1 million non-cash impairment charge related to a development-stage pepper-sourcing project in Malaysia that the company is shutting down. Adjusted diluted EPS came in at $0.86, essentially flat with $0.85 a year ago, as higher adjusted operating income was offset by a steeper tax rate and increased interest expense connected to the Mexico deal.
The Consumer segment — the unit most visible on c-store and grocery shelves through brands including McCormick, Frank's RedHot, French's, OLD BAY, Cholula, and Zatarain's — posted reported net sales of $1.215 billion, up 24.9%, with organic growth of 1.1%. The Flavor Solutions segment, which supplies seasonings, condiments, and flavor systems directly to foodservice operators and food manufacturers, grew reported net sales 7.7% to $809 million on 3.0% organic growth. For c-store foodservice buyers and back-of-house program managers, demand stability in Flavor Solutions signals continued supplier investment in proprietary flavor development for prepared-food programs.
Full-Year Outlook & Unilever Deal
McCormick reaffirmed its fiscal 2026 guidance: reported net sales growth of 13% to 17%, adjusted operating income growth of 16% to 20%, and adjusted EPS in the range of $3.05 to $3.13. Organic sales are projected to grow 1% to 3% on a constant-currency basis, with McCormick de Mexico contributing 11% to 13% of the total sales increase. The company expects a roughly 1% favorable currency tailwind across sales, operating income, and EPS.
The larger strategic overhang is the proposed combination with Unilever's Foods business — a deal announced in March 2026 that would create a flavor-focused company with approximately $20 billion in combined fiscal 2025 revenue and a 21% operating margin. McCormick has established a dedicated Integration Management Office and mobilized more than 200 employees across 20 cross-functional teams. Regulatory filings are on schedule across jurisdictions, and the transaction remains on track to close by mid-2027. The company expects mid- to high-single-digit adjusted EPS accretion within the first twelve months post-close, rising to mid-to-high teens by Year 3, supported by approximately $600 million in annual run-rate cost synergies. For operators and distributors sourcing condiments, hot sauces, and proprietary spice blends for foodservice programs, the scale of that combined entity will likely affect supplier negotiations and category management conversations well before the ink dries.
Written by Michael Politz, Author of Guide to Restaurant Success: The Proven Process for Starting Any Restaurant Business From Scratch to Success (ISBN: 978-1-119-66896-1), Founder of Food & Beverage Magazine, the leading online magazine and resource in the industry. Designer of the Bluetooth logo and recognized in Entrepreneur Magazine's "Top 40 Under 40" for founding American Wholesale Floral, Politz is also the Co-founder of the Proof Awards and the CPG Awards and a partner in numerous consumer brands across the food and beverage sector.
