McCormick Says It Can Mitigate Current Tariff Related Costs, Fuel Growth Investments, Stock Soars

Flavoring products maker McCormick & Company MKC shares jumped nearly 6% in Thursday’s premarket session after the company topped fiscal second quarter 2025 earnings estimates and reaffirmed its full-year outlook, with management highlighting strong positioning to offset tariff-related pressures.

The company reported second-quarter adjusted earnings per share of 69 cents, beating the analyst consensus estimate of 66 cents. Quarterly sales of $1.659 billion outpaced the Street view of $1.658 billion.

Net sales increased 1% in the second quarter, driven by volume growth, and included a 1% unfavorable impact from currency. Organic sales growth of 2% was driven by volume.

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Consumer segment net sales increased by 3%, while Flavor Solutions segment net sales decreased by 1%.

Adjusted operating income was $258.6 million, 9.7% higher year over year. Adjusted operating margin jumped by 120 basis points year over year to 15.6%.

Adjusted gross profit in the quarter under review inched up by 0.5% to $622.8 million, while adjusted gross margin contracted by 20 basis points to 37.5%.

The company noted that most U.S. imports from Mexico and Canada already comply with the United States-Mexico-Canada Agreement. Its tariff mitigation strategy includes data-driven sourcing plans, cost-saving efforts, and revenue growth management.

“For this fiscal year, we are well positioned with our robust plans to mitigate current tariff-related costs, fuel growth investments, and expand operating margins,” said CEO Brendan M. Foley. 

The company exited the quarter with cash and equivalents worth $124.1 million, with inventories worth $1.307 billion.

Long-term debt contracted to $3.099 billion, down from $3.593 billion as of November 30, 2024.

For the fiscal year 2025, McCormick reaffirmed its net sales, adjusted operating profit, and adjusted earnings per share outlook. The company projects net sales growth of 0% to 2%, with operating income of 2% to 4%.

The company reaffirmed its full-year 2025 adjusted earnings per share guidance of $3.03 to $3.08, compared to the consensus estimate of $3.04.

Price Action: MKC shares are trading higher by 5.92% to $78.00 premarket at last check Thursday.

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