McCormick Reports Modest Sales Growth and Operating Income Increase in Q2 2025

McCormick & Company, Incorporated reported its financial results for the second quarter and first half of fiscal 2025, revealing a modest increase in net sales and operating income compared to the previous year. For the three months ended May 31, 2025, net sales reached $1,659.5 million, a 1.0% increase from $1,643.2 million in the same period of 2024. The company’s operating income for the quarter was $245.8 million, up 5.0% from $234.1 million a year earlier. However, net income decreased to $175.0 million, down from $184.2 million, resulting in diluted earnings per share of $0.65, compared to $0.68 in the prior year.

In the first half of 2025, McCormick's net sales totaled $3,265.0 million, a slight increase from $3,245.9 million in the first half of 2024. Operating income for the six-month period was $471.0 million, compared to $467.6 million in the previous year. The company attributed the sales growth to favorable volume and product mix, which positively impacted net sales by 1.3%, although this was partially offset by a 0.6% decline due to foreign currency fluctuations. The gross profit margin for the second quarter was 37.5%, a decrease of 20 basis points, primarily due to increased commodity costs.

Strategically, McCormick has made significant moves, including the acquisition of Jurado, Inc., a supplier of chili mash, for approximately $38.1 million. This acquisition is expected to enhance the company's product offerings in the Consumer segment. Additionally, the company recorded special charges of $12.8 million in the second quarter, primarily related to employee severance and integration costs associated with the acquisition and ongoing organizational streamlining efforts. The company has also implemented cost-saving measures through its Comprehensive Continuous Improvement program, which contributed to a reduction in selling, general, and administrative expenses as a percentage of sales.

Operationally, McCormick's Consumer segment saw a 2.9% increase in sales for the second quarter, driven by growth across all regions, while the Flavor Solutions segment experienced a 1.3% decline in sales, primarily due to unfavorable volume and product mix in the Americas and EMEA regions. The company reported a total of 268.6 million average shares outstanding, with a quarterly dividend increase to $0.45 per share, up from $0.42 in the previous year. Looking ahead, McCormick anticipates net sales growth of 0% to 2% for fiscal 2025, with expectations for continued improvements in operating income and earnings per share, despite potential challenges from foreign currency rates and commodity costs.