AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 31/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Broad distribution, disclosed category leadership and specialized customized flavor relationships support a differentiated position, corroborated by positive fiscal 2025 pricing and volume/product mix. Leadership remains an issuer assertion; relative cost leadership and material switching barriers are unproven.
durability · 2/4 · Leadership disclosures across fiscal 2023–2025 and decades-long relationships support persistence. Ongoing marketing investment and actual price elasticity limit confidence in durable protection.
customer dependency · 2/4 · Customized products and longstanding relationships indicate repeat commercial reliance, assessed indirectly. They do not establish costly switching; the top three Flavor Solutions customers account for 49% of segment sales and commercial terms reset frequently.
erosion resilience · 2/4 · Fiscal 2025 pricing and volume/product mix growth and positive 2026 pricing demonstrate resilience. Nine-month 2026 volume/product mix declined overall, with Consumer weakness partly offset by Flavor Solutions growth. Actual elasticity constrains resilience; generic buyer risks are not assumed realized losses.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 3/4 · Consolidated pricing contributed 0.5% in fiscal 2024, 0.7% in fiscal 2025 and 2.1% in nine-month 2026. These demonstrate favorable realized outcomes, but adverse elasticity and third-quarter APAC Flavor Solutions price reductions show limits.
retention · 2/4 · Decades-long commercial relationships demonstrate repeat demand. Indirect operating evidence is mixed: fiscal 2025 volume/product mix grew, whereas nine-month 2026 Consumer volume/product mix declined despite positive pricing. No retention rate or causal attribution of all volume weakness to pricing is inferred.
margin resilience · 2/4 · Fiscal 2025 gross margin declined 60 basis points despite pricing and productivity offsets. Third-quarter 2026 expansion demonstrates recovery but includes acquisition effects; year-to-date profitability also benefited from a tariff expense reversal. Pricing alone does not explain resilience.
contractual freedom · 2/4 · Frequent pricing and quantity setting, with most arrangements lasting one year or less, provides repricing opportunities. Powerful buyers and realized elasticity constrain practical freedom; the disclosures do not establish unilateral pricing authority.
Predictability100
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 1.72
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.78
- observedAnnualPeriods
- 5.00
Financial strength26
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 37.18
- netDebtEbitGrade
- 27.15
- interestCoverageGrade
- 40.52
- currentRatioGrade
- 0.00
- Debt / FCF (x)
- 5.40
- Net debt / operating income (x)
- 3.64
- Interest coverage (x)
- 5.46
- Current ratio (x)
- 0.70
Capital allocation86
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 10.90
- 3-year average dilution (%)
- 0.04
- 3-year average SBC / revenue (%)
- 0.78
- cashConversionGrade
- 100.00
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Fiscal 2025 net debt repayments and nine-month 2026 operating cash generation of $598.8 million support discipline. Acquisition spending of $729.9 million, capital expenditures of $131.2 million, increased short-term borrowing and financing fees raise exposure. Pending merger ownership changes and a bridge commitment up to $15.7 billion lack demonstrated investment returns; the commitment is not assumed drawn.
incentive alignment · 2/4 · Annual operating metrics, acquisition-adjusted three-year sales goals, completed PSU awards and actual forfeiture of unmet price-vested options establish performance linkage. Retirement-related early vesting and a closing/employment-based cash retention agreement temper alignment. Conditional retention awards are not treated as vested, and executive ownership alignment remains unestablished.
execution · 2/4 · Indirect operating evidence is mixed. Fiscal 2025 sales and operating income grew, and 2026 adjusted operating income improved. However, nine-month volume/product mix declined and GAAP operating income fell as special charges rose. Acquisition consolidation and tariff reversals limit attribution of improvement to underlying execution.
governance · 2/4 · Independent audit and compensation committees, hedging restrictions and a Lead Director provide substantive safeguards. A non-independent Chairman and lack of voting rights for MKC holders constrain shareholder oversight. Completed annual meeting votes and disclosed Audit Committee chair succession establish actual governance events without demonstrating exceptional effectiveness.
Evidence
Consumer Segment. From locations around the world, our brands reach consumers in approximately 150 countries and territories.
Business — Consumer distribution reach · Filed 22/01/2026
Within the spices and seasoning category, we are the brand leader globally and a category leader in our key markets.
Business — spices and seasoning category leadership · Filed 22/01/2026
We supply food manufacturers and foodservice customers with customized Flavor Solutions, and many of these customer relationships have been active for decades.
Business — customized Flavor Solutions and relationship duration · Filed 22/01/2026
Our customers benefit from our expertise in many areas, including sensory testing, culinary research, food safety, and flavor application.
Business — flavor expertise · Filed 22/01/2026
RESULTS OF OPERATIONS—2025 COMPARED TO 2024
2025
2024
Net sales
$
6,840.3
$
6,723.7
Percent growth
1.7
%
0.9
%
Components of percent change in net sales:
Volume and product mix
1.2
%
0.3
%
Pricing actions
0.7
%
0.5
%
Divestiture
—
%
(0.2)
%
Foreign exchange
(0.2)
%
0.3
%
Sales for 2025 increased by 1.7% from 2024 and by 1.9% on an organic basis (that is, excluding the impact of foreign currency exchange as more fully described under the caption, Non-GAAP Financial Measures).
MD&A — fiscal 2025 consolidated sales bridge · Filed 22/01/2026
Within the spices and seasoning category, we are the brand leader globally and a category leader in our key markets.
Fiscal 2023 business — category leadership · Filed 25/01/2024
In 2025, 2024, and 2023, the top three customers in our Flavor Solutions segment represented 49% of our global Flavor Solutions sales.
Business — Flavor Solutions customer concentration · Filed 22/01/2026
Additionally, in some instances, the pricing actions we take have been impacted by price elasticity which unfavorably impacts our sales volume and mix.
Risk discussion — realized adverse price elasticity · Filed 22/01/2026
Brand Marketing Support
Total brand marketing support costs, which are included in our consolidated income statement in the line entitled "Selling, general and administrative expense," were $276.7 million, $265.0 million, and $247.1 million for 2025, 2024, and 2023, respectively.
Accounting disclosures — brand marketing support costs · Filed 22/01/2026
Such consolidation could present a challenge to margin growth and profitability in that it has produced large, sophisticated customers with increased buying power who are more capable of operating with reduced inventories; resisting price increases; demanding lower pricing, increased promotional programs and specifically tailored products; and shifting shelf space currently used for our products to private label and other competitive products.
Risk factors — consolidated customers and buyer power · Filed 22/01/2026
Key sales terms, such as pricing and quantities ordered, are established on a frequent basis such that most customer arrangements and related incentives have a one-year or shorter duration.
Customer arrangements — pricing, quantities and duration · Filed 22/01/2026
Pricing favorably impacted sales by 2.1% with favorable pricing from our Consumer and Flavor Solutions segments of 2.4% and 1.7%, respectively.
MD&A — nine-month 2026 consolidated and segment pricing · Filed 01/10/2026
Unfavorable volume and product mix decreased sales by 0.5% with unfavorable volume and product mix from our Consumer segment of 1.2% partially offset by favorable volume and product mix from our Flavor Solutions segment of 0.4%.
MD&A — nine-month 2026 consolidated and segment volume/product mix · Filed 01/10/2026
Our gross profit margin was 39.3%, an increase of 190 basis points, driven by the impacts of the McCormick de Mexico acquisition, favorable pricing, and cost savings from the Company's CCI program, partially offset by increased commodity costs and higher freight costs, including the impact of the conflict in the Middle East.
MD&A — third-quarter 2026 gross margin drivers · Filed 01/10/2026
Our gross profit margin was 37.9%, a decrease of 60 basis points, driven by increased commodity costs including the impact of tariffs, unfavorable product mix, and increased conversion cost including costs to support capacity for future growth, partially offset by pricing actions and CCI program-led cost savings.
MD&A — fiscal 2025 gross margin decline and offsets · Filed 22/01/2026
During the second quarter of 2026, we determined that the refund was probable of recovery and we reduced cost of goods sold by $27.6 million, effectively reversing the IEEPA tariff expense previously recognized in connection with inventory sold to customers since the tariffs were enacted in the first quarter of 2025, and reduced the carrying value of inventory by $3.2 million.
Tariff disclosures — expense reversal and inventory adjustment · Filed 01/10/2026
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
(in millions)
Nine months ended August 31,
2026
2025
Operating activities
Net income
$
1,290.1
$
567.1
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization
213.1
172.1
Stock-based compensation
34.5
37.3
Amortization of inventory fair value adjustments associated with acquisition
15.0
—
Asset impairments included in special charges
43.1
—
Deferred income tax benefit
(21.8)
(15.8)
Income from unconsolidated operations
(25.7)
(58.3)
Gain on remeasurement of previously held equity interest
(866.8)
—
Changes in operating assets and liabilities (net of effect of businesses acquired)
Trade accounts receivable
10.2
(51.9)
Inventories
(44.6)
(26.0)
Trade accounts payable
(9.8)
(62.5)
Other assets and liabilities
(55.3)
(181.2)
Dividends from unconsolidated affiliates
16.8
39.4
Net cash flow provided by operating activities
598.8
420.2
Investing activities
Acquisition of business, net of cash acquired
(729.9)
(34.1)
Capital expenditures (including software)
(131.2)
(138.1)
Net cash flow used in investing activities
(861.1)
(172.2)
Financing activities
Short-term borrowings, net
958.8
13.2
Long-term debt borrowings (net of debt issuance costs of $1.1)
498.3
2.4
Debt financing fees paid
(75.0)
—
Long-term debt repayments
(506.7)
(15.7)
Proceeds from exercised stock options
23.9
15.1
Taxes withheld and paid on employee stock awards
(11.9)
(13.2)
Common stock acquired by purchase
Nine-month 2026 cash flow statement — operations, investment and financing · Filed 01/10/2026
The following table outlines our net borrowing activities:
2025
2024
2023
Net (decrease) increase in short-term borrowings
$
(101.4)
$
211.1
(964.6)
Proceeds from issuance of long-term debt, net of debt issuance costs
2.7
494.5
495.3
Repayments of long-term debt
(267.9)
(801.1)
(268.1)
Net cash (used in) net borrowing activities
$
(366.6)
$
(95.5)
$
(737.4)
In 2025, we repaid $267.9 million of long-term debt, including the $250.0 million, 3.25% notes that matured in November 2025.
Liquidity — fiscal 2025 borrowing activities and debt repayment · Filed 22/01/2026
In connection with the execution of the Merger Agreement, we entered into a commitment letter on March 31, 2026 (the "Bridge Commitment Letter") with Citigroup Global Markets Inc., Goldman Sachs Bank USA and Morgan Stanley Senior Funding, Inc., (the "Commitment Parties") pursuant to which the Commitment Parties committed to provide, subject to the terms and conditions set forth therein, a 364-day senior unsecured bridge term loan credit facility (the "Bridge Facility") in an aggregate principal amount of up to $15.7 billion.
Merger financing — conditional bridge commitment · Filed 01/10/2026
The transactions contemplated by the Merger Agreement are expected to result in current Unilever shareholders owning approximately 55.1% of the combined company, our current shareholders owning approximately 35.0% of the combined company, and Unilever retaining up to approximately 9.9% of the total outstanding equity of the combined company, assuming Unilever does not elect under the Merger Agreement to dispose of such interest.
Pending merger — expected ownership allocation · Filed 01/10/2026
Our annual incentive is based on a formula that includes adjusted earnings per share ("EPS") growth, net sales growth, volume sales growth, and adjusted operating income growth, adjusted for working capital charges and currency impact.
Proxy — annual incentive performance formula · Filed 18/02/2026
Cumulative net sales represents the cumulative growth rate for continuing operations over a three-year period, adjusted for items including foreign currency and the sales impact associated with acquisitions and divestitures.
Proxy — acquisition-adjusted three-year sales measure · Filed 18/02/2026
The PSUs that concluded their performance period at the end of fiscal 2025 were earned at 142.5% of target (or 47.5% of the maximum opportunity), reflecting strong three-year cumulative net sales and no TSR modifier.
Proxy — completed PSU performance period · Filed 18/02/2026
•Awards generally vest at a rate of one-third per year or, if earlier, upon the retirement eligibility date of the holder.
Proxy — award vesting and retirement eligibility · Filed 18/02/2026
The market conditions were not met in the five-year period from the date of grant and all price-vested options were forfeited in November 2025.
Stock compensation — forfeiture of price-vested options · Filed 22/01/2026
Foley) entered into a retention award agreement providing for a special one-time cash retention award of $1,000,000, 50% of which will vest on the Closing Date and 50% of which will vest on the six-month anniversary of the Closing Date, subject to the named executive officer’s continued employment through each such vesting date.
Executive arrangements — conditional cash retention award · Filed 25/06/2026
The Audit Committee of the Board of Directors, which is composed solely of independent directors, meets periodically with members of management, the internal auditors and the independent registered public accounting firm to review and discuss internal control over financial reporting and accounting and financial reporting matters.
Internal control — independent Audit Committee oversight · Filed 22/01/2026
YES. McCormick’s CHCC is comprised solely of independent directors.
Proxy — independent compensation committee · Filed 18/02/2026
Among other things, the Corporate Governance Guidelines make clear that directors and officers of the Company appointed by the Board (including all executive officers) may not pledge Company stock as collateral for a loan or otherwise use Company stock to secure a debt, and may not engage in any hedging transactions with respect to Company stock.
Proxy — officer and director pledging and hedging restrictions · Filed 18/02/2026
The Board also has the position of Lead Director who provides additional independent oversight of board matters in our current structure where the Chairman is not an independent director.
Proxy — Lead Director and non-independent Chairman · Filed 18/02/2026
Holders of Common Stock Non-Voting (NYSE: MKC) may not vote but are welcome to virtually attend the Annual Meeting at www.virtualshareholdermeeting.com/MKC2026.
Proxy — MKC non-voting shareholder rights · Filed 18/02/2026
On April 1, 2026, McCormick & Company, Incorporated (the “Registrant”) held its Annual Meeting of Stockholders, at which (i) directors were elected, (ii) Ernst & Young LLP’s appointment as the Registrant’s independent registered public accounting firm for the fiscal year ending November 30, 2026, was ratified, and (iii) the compensation paid to the Registrant’s Named Executive Officers was approved in an advisory vote.
Annual meeting results — elections, auditor ratification and advisory compensation approval · Filed 03/04/2026
Valarie Sheppard, current member of the Board and Audit Committee will assume the role of Chair of the Audit Committee effective September 1, 2026.
Board update — Audit Committee chair succession · Filed 28/08/2026
(in millions except per share data) Three Months Ended Nine Months Ended 8/31/2026 8/31/2025 8/31/2026 8/31/2025 Gross profit $ 794.9 $ 645.1 $ 2,282.0 $ 1,871.9 Impact of Special charges included in cost of goods sold — 1.0 15.0 1.0 Adjusted gross profit $ 794.9 $ 646.1 $ 2,297.0 $ 1,872.9 Gross profit margin(1) 39.3 % 37.4 % 39.1 % 37.5 % Impact of Special charges(1) — % 0.1 % 0.3 % — % Adjusted gross profit margin(1) 39.3 % 37.5 % 39.4 % 37.5 % Operating income $ 217.0 $ 288.7 $ 720.9 $ 759.7 Impact of Special charges 141.5 4.9 241.6 17.7 Adjusted operating income 358.5 293.6 962.5 777.4 Operating income margin(2) 10.7 % 16.7 % 12.4 % 15.2 % Impact of Special charges(2) 7.0 % 0.3 % 4.1 % 0.4 % Adjusted operating income margin(2) 17.7 % 17.0 % 16.5 % 15.6 % Income tax expense $ 49.9 $ 39.3 $ 162.1 $ 130.2 Impact of Special charges 19.8 1.3 30.7 4.3 Adjusted income tax expense $ 69.7 $ 40.6 $ 192.8 $ 134.5 Income tax rate(3) 32.3 % 15.9 % 29.0 % 20.4 % Impact of Special charges (9.7) % 0.2 % (5.5) % 0.1 % Adjusted income tax rate(3) 22.6 % 16.1 % 23.5 % 20.5 % Net income attributable to McCormick & Company $ 97.6 $ 225.5 $ 1,263.9 $ 562.8 Impact of Special charges, net of non- controlling interest(4)(5) 134.1 3.6 227.4 13.4 Gain on remeasurement of previously held equity interest — — (866.8) — Adjusted net income $ 231.7 $ 229.1 $ 624.5 $ 576.2 Earnings per share – diluted $ 0.36 $ 0.84 $ 4.69 $ 2.09 Impact of Special charges 0.50 0.01 0.85 0.05 Gain on remeasurement of previously held equity interest — — (3.22) — Adjusted earnings per share – diluted $ 0.86 $ 0.85 $ 2.32 $ 2.14
Third-quarter release — GAAP and adjusted profitability reconciliation · Filed 01/10/2026
Operating income increased 1% and adjusted operating income increased 2%.
Proxy — fiscal 2025 operating income growth · Filed 18/02/2026
Third Quarter 2026 Results Sales Metrics Third Quarter 2026 As Reported Organic(1) Acquisition Constant Currency % Change Volume/ Mix Price % Change % Change % Change Total Net Sales 17.4 % (0.3) % 2.2 % 1.9 % 14.6 % 16.5 % Total Consumer 24.9 % (1.1) % 2.2 % 1.1 % 23.2 % 24.3 % Americas 31.7 % (2.5) % 2.2 % (0.3) % 32.1 % 31.8 % EMEA 5.2 % 2.0 % 3.0 % 5.0 % — % 5.0 % APAC 10.7 % 4.1 % 0.3 % 4.4 % — % 4.4 % Total Flavor Solutions 7.7 % 0.8 % 2.2 % 3.0 % 3.4 % 6.4 % Americas 8.4 % (0.1) % 2.8 % 2.7 % 4.9 % 7.6 % EMEA 1.6 % (1.0) % 2.2 % 1.2 % — % 1.2 % APAC 14.2 % 10.0 % (1.7) % 8.3 % — % 8.3 % (1) Organic sales growth is defined as the impact of volume/mix and price and excludes the impact of acquisitions or divestitures, as applicable, and foreign currency.
Third-quarter release — segment and regional organic sales bridge · Filed 01/10/2026
There are numerous competitive brands of spices and seasonings and condiments and sauces in the U.S., as well as additional brands in international markets.
Business — competing consumer brands · Filed 22/01/2026
Other competitors include large publicly held flavor companies that are more global in nature and tend to focus on providing integrated solutions extending beyond flavor through the use of other functional and nutritional ingredients.
Business — global flavor competitor categories · Filed 22/01/2026
