We delivered differentiated, volume-led organic growth and share gains, powered by sustained momentum from investing in our brands, expanding distribution, and driving innovation across our business. As a result, we realized operating income, growth, and margin expansion for the full year, all while continuing to invest to drive future growth. In the fourth quarter, total organic sales increased by 2%, supported by growth in both consumer and flavor solutions. In global consumer, organic sales growth was driven by volume, which grew for the seventh consecutive quarter, as well as price contributions.
In the Americas region, we delivered volume growth, even as pricing actions took effect, with elasticities coming in broadly in line with our expectations. In Asia Pacific, organic growth was supported by strong and continued momentum in Australia and our China retail business. Importantly, we achieved the gradual full-year recovery in China consumer for the year as planned. These headwinds were mostly offset, with growth from high-growth innovators, private label customers, and QSRs across the Americas and Asia Pacific.
Turning to profitability, fourth quarter gross margin was pressured by higher-than-expected inflation across our diverse basket of commodities, and we recognized more tariff costs than previously planned. In addition, as expected, we continue to invest in the business, advancing our supply chain capabilities, innovation, and growth platforms. Across the global consumer segment, we have held or improved share across many core categories in key markets for the last six quarters. McCormick-branded volume consumption growth continues to outpace the broader edible category in the U.S.
| Metric | Period | Current guidance |
|---|---|---|
| Organic net sales growth | FY2026 | 1% to 3% (New) |
| Currency impact on net sales, adjusted operating income and EPS | FY2026 | Approximately one-point positive (New) |
| Gross margin | FY2026 | Recover the 60 bps of margin compression seen in 2025 (New) |
| Incremental year-over-year tariff cost impact | FY2026 | Approximately $50 million (mostly to be offset) (New) |
| Cost inflation | FY2026 | Mid-single-digit, continuing at Q4 run rate (New) |
| Metric | YoY | Note |
|---|---|---|
| Consumer organic sales | +3% | Driven by both price and volume, with volume growth for the seventh consecutive quarter across core categories. |
| Consumer Americas organic sales | +3% | 1% volume growth plus 2% pricing reflecting cost inflation-related pricing implemented in September; elasticities broadly in line with expectations. |
| Consumer EMEA organic sales | +3% | 1% volume increase and 2% pricing from targeted actions on higher commodity costs; eighth consecutive quarter of volume growth. |
| Consumer Asia-Pacific organic sales | +2% | Primarily volume growth, with China in line with expectations and strong results in Australia. |
| Flavor solutions organic sales | +1% | 2% price contribution partially offset by approximately 1% volume decline. |
| Flavor solutions Americas organic sales | +1% | 3% price contribution offset by 2% volume decline tied to Latin America customer inventory reset and soft large CPG and branded food service volumes. |
| Flavor solutions EMEA organic sales | -3% | 2% price more than offset by 1% lower volume reflecting soft CPG customer volumes. |
| Flavor solutions Asia-Pacific organic sales | +3% | 5% volume growth from QSR customer promotions and limited-time offers, partially offset by 2% lower price. |
| Adjusted gross profit margin | -120 bps | Higher commodity costs, tariffs, and capacity investment costs, partially offset by CCI productivity savings. |
| SG&A expense | -120 bps | Lower employee-related benefits and CCI savings, partly offset by higher brand marketing and technology investment. |
| Adjusted operating income | +3% (+2% constant currency) | Improved SG&A partially offset by gross margin pressure and growth investments. |
| Adjusted EPS | +7% | Higher adjusted operating income, improved interest expense from debt paydown, and a favorable tax rate. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Tariffs and commodity inflation | Gross annualized exposure of $140 million | Exposure cut roughly 50% to about $70 million; mid-single-digit inflation expected to persist into 2026 | Steady |
| Volume-led consumer growth | — | Seventh consecutive quarter of consumer volume growth, eighth in EMEA | Rising |
| Flavor solutions profitability and recovery | — | Full-year operating margin expanded 90 bps; volumes expected to recover and grow in 2026 | Rising |
| ERP implementation and SG&A streamlining | — | Waves being compressed, shifting costs into 2026 to minimize risk, with last go-live in early 2027 | Rising |
| China consumer recovery | — | Achieved planned gradual full-year recovery; continued gradual improvement expected in 2026 | Rising |
| Reformulation pipeline with CPG and private label | — | Development activity increasing; commercialization weighted to late 2026 and more so 2027 | Rising |