Start here if you're new
what it is
McCormick sells the spices, sauces, and flavor systems that stock your kitchen and a lot of restaurant and packaged food menus.
how it gets paid
Last year Cormick made $6.8B in revenue.
why it's growing
Revenue grew 1.7% last year. The miss was only 1.15%, but for a stock priced at 23x trailing earnings, even tiny misses matter because you are paying for smooth execution.
what just happened
McCormick's last report was a penny miss, with EPS at $0.86 versus a $0.87 estimate.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
95/100 earnings predictability — you can trust these numbers
23.0x trailing p/e — priced about right
2.8% dividend yield — cash in your pocket every quarter
9.5% return on capital — nothing to write home about
xvary composite: 59/100 — below average
What they do
McCormick sells the spices, sauces, and flavor systems that stock your kitchen and a lot of restaurant and packaged food menus.
You do not rebuild your spice rack every month. That habit matters. Consumer products made up 57% of fiscal 2024 sales, and once a brand wins your pantry and your grocery shelf, losing it gets slow and expensive.
How they make money
$6.8B
annual revenue · their business grew +1.7% last year
total revenue
$6.8B
+1.7%
The products that matter
branded pantry products
consumer
+2.6% last quarter
this is the shelf-facing side of the business. it grew 2.6% in the latest quarter, which is decent for staples, and it is the cleaner of the two operating stories right now.
steadier demand
foodservice flavor systems
flavor solutions
+0.6% last quarter
this segment rose just 0.6% in the latest quarter while europe stayed soft and chinese foodservice weakened. that's not broken, but it is dragging on the overall growth profile.
the weak link
Key numbers
23.0x
trailing p/e
P/E → stock price divided by yearly profit → so what: you are paying $23 for each $1 McCormick earned over the last year.
21.0%
operating margin
Operating margin → profit after running the business → so what: McCormick keeps about $0.21 from each sales dollar before interest and taxes.
2.8%
dividend yield
Dividend yield → yearly cash payout divided by stock price → so what: you get some income while you wait, but not enough to erase valuation risk.
95
earnings predictability
Predictability score → how steady profits have been → so what: this is a dependable business, which is exactly why investors keep overpaying for it.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 2 — safer than 80% of stocks
- price stability 90 / 100
- long-term debt $3.1B (14% of capital)
- net profit margin 13.0% — keeps 13 cents of every dollar in revenue
- return on equity 14% — $0.14 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in MKC 3 years ago → it's now worth $8,810.
The index would have given you $13,920.
source: institutional data · total return
What just happened
missed estimates
McCormick's last report was a penny miss, with EPS at $0.86 versus a $0.87 estimate.
Revenue was reported at $5.0B, EPS at $2.09, and gross margin at 37.5% in the latest filing. The quieter point is that management also said tariffs and cost inflation are constraining profit growth.
$5.0B
revenue
$2.09
eps
37.5%
gross margin
the number that mattered
The miss was only 1.15%, but for a stock priced at 23x trailing earnings, even tiny misses matter because you are paying for smooth execution.
-
mccormick’s overall operating trends remained subdued in the most recent quarter. (fiscal 2026 year ends november 30, 2026.) organic sales growth, excluding the impact of currency, came in at 1.8%, continuing the sub-2% pace experienced over the past five quarters.
-
the consumer business reported a 2.6% advance, while flavor solutions was up 0.6%.in general, european markets were relatively soft, while asian business was helped by quick service restaurant demand, and hurt by softer chinese foodservice results. although expansion into emerging markets, further innovation in new categories, and penetration of foodservice channels will ultimately drive long-term sales, most of the near-term investment thesis depends on shifts in gross margins and operating expenses.
-
indeed, the effect of tariffs and cost inflation is constraining profit growth.
-
management lifted incremental cost estimates throughout the year.total gross annualized exposure now stands at $140 million versus the previous estimate of $90 million. the stock has weakened in response, as wall street seems worried that these challenges are not fully resolved. to combat the problems, management has sought alternative sourcing arrangements and improved supply chain efficiencies.
-
improved analytics may deliver better profitability.
source: company earnings report, 2026
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What could go wrong
the #1 risk is tariff and input-cost inflation across spices, packaging, and procurement.
med
cost inflation is still rising
gross annualized cost exposure climbed to $140M from the prior $90M estimate. that is moving the wrong way.
this matters because management is trying to defend roughly 21% operating margin while absorbing a bigger cost bill.
med
flavor solutions is close to stall speed
the segment grew just 0.6% in the latest quarter, with europe soft and chinese foodservice weaker.
if that business stays around this pace, the consolidated growth story keeps looking more like defense than expansion.
med
the growth headline may be flatter than it looks
reported annual revenue growth shows +37.1%, but fy2026 revenue is only estimated at $7B versus $6.8B last year.
in plain english: after the big headline number, the next leg looks like roughly 3% sales growth.
med
execution has to stay clean at 23x earnings
MKC trades at 23.0x trailing earnings despite only 9.0% return on capital and a bottom-5% technical score.
that multiple can hold for a stable staples business. it is less forgiving if margin repair slips or demand stays subdued.
combined, the business is balancing $140M of annualized cost exposure against a sales base expected to rise only from $6.8B to about $7B.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next report in jan
you need to see whether the latest $0.84 EPS quarter was a pause or the new pace.
metric
operating margin near 21%
the stock can tolerate slow growth more easily than margin erosion. that is the number carrying the valuation.
trend
flavor solutions versus consumer
2.6% growth in consumer versus 0.6% in flavor solutions is the operating split to watch. the gap is doing the talking right now.
risk
cost exposure after the jump to $140M
last quarter's estimate was $90M. if the next update rises again, the market will hear that louder than any small revenue beat.
Analyst rankings
short-term outlook
below average
momentum score 4 — in human-speak, analysts do not expect MKC to lead the market over the next 12 months.
stock safety
above average
stability score 2 — safer than roughly 80% of stocks. boring, here, is a feature.
chart momentum
bottom 5%
technical score 5 — relative performance is weak. the chart still looks defensive, not in demand.
earnings predictability
95 / 100
management usually gives reliable guidance. you are not buying this for surprise upside.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 389 buyers vs. 511 sellers in 3q2025. total institutional holdings: 0.2B shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$59
$102
$69
current price
$81
target midpoint · +17% from current · 3-5yr high: $120 (+75% · 17% ann'l return)
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