Food flavoring company McCormick (NYSE: MKC) fell short of the market’s revenue expectations in Q1 CY2025, with sales flat year on year at $1.61 billion. Its non-GAAP profit of $0.60 per share was 6.8% below analysts’ consensus estimates.
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McCormick (MKC) Q1 CY2025 Highlights:
- Revenue: $1.61 billion vs analyst estimates of $1.62 billion (flat year on year, 0.6% miss)
- Adjusted EPS: $0.60 vs analyst expectations of $0.64 (6.8% miss)
- Adjusted EBITDA: $299 million vs analyst estimates of $289.3 million (18.6% margin, 3.4% beat)
- Management reiterated its full-year Adjusted EPS guidance of $3.05 at the midpoint
- Operating Margin: 14%, in line with the same quarter last year
- Free Cash Flow Margin: 4.9%, similar to the same quarter last year
- Sales Volumes rose 2.2% year on year (-1% in the same quarter last year)
- Market Capitalization: $21.54 billion
Brendan M. Foley, Chairman, President, and CEO, stated, "We are pleased to start the year with solid first quarter results that are in line with our expectations, as we are managing a dynamic environment. Our continued volume-driven performance reflects the success of our prioritized investments in the areas that are driving the greatest value and will sustain our momentum for the remainder of 2025 and beyond. We achieved share gains in core categories across key markets and delivered volume growth in both the Consumer and Flavor Solutions segments.
Company Overview
The classic red Heinz ketchup bottle’s competitor, McCormick (NYSE: MKC) sells food-flavoring products like condiments, spices, and seasoning mixes.
Shelf-Stable Food
As America industrialized and moved away from an agricultural economy, people faced more demands on their time. Packaged foods emerged as a solution offering convenience to the evolving American family, whether it be canned goods or snacks. Today, Americans seek brands that are high in quality, reliable, and reasonably priced. Furthermore, there's a growing emphasis on health-conscious and sustainable food options. Packaged food stocks are considered resilient investments. People always need to eat, so these companies can enjoy consistent demand as long as they stay on top of changing consumer preferences. The industry spans from multinational corporations to smaller specialized firms and is subject to food safety and labeling regulations.
Sales Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $6.73 billion in revenue over the past 12 months, McCormick is one of the larger consumer staples companies and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because there are only so many big store chains to sell into, making it harder to find incremental growth. To accelerate sales, McCormick likely needs to optimize its pricing or lean into new products and international expansion.
As you can see below, McCormick grew its sales at a sluggish 1.9% compounded annual growth rate over the last three years, but to its credit, consumers bought more of its products.
This quarter, McCormick’s $1.61 billion of revenue was flat year on year, falling short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 2.4% over the next 12 months, similar to its three-year rate. This projection is underwhelming and suggests its newer products will not accelerate its top-line performance yet.
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Volume Growth
Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful staples business as there’s a ceiling to what consumers will pay for everyday goods; they can always trade down to non-branded products if the branded versions are too expensive.
McCormick’s average quarterly volume growth was a healthy 1.1% over the last two years. This is pleasing because it shows consumers are purchasing more of its products. 
In McCormick’s Q1 2025, sales volumes jumped 2.2% year on year. This result was an acceleration from its historical levels, certainly a positive signal.
Key Takeaways from McCormick’s Q1 Results
It was encouraging to see McCormick beat analysts’ EBITDA expectations this quarter. On the other hand, its EPS missed and its revenue fell slightly short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 5.3% to $76.02 immediately following the results.
Is McCormick an attractive investment opportunity right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
