By Connor Hart

McCormick & Co. posted higher sales in the fourth quarter but issued a soft adjusted earnings outlook for fiscal 2026 as higher costs are expected to dent profits.

Chief Executive Brendan Foley on Thursday said the company continues to face inflationary pressures and rising costs.

McCormick faced rising expenses and took a hit from steep tariffs last quarter, prompting it to slash its full-year earnings forecast.

Foley told analysts in October that the company was absorbing incremental costs, which had an impact on profitability as tariffs climbed higher than expected.

Shares recently fell 6.1% to $62.50 in premarket trading.

The spice and seasoning maker posted net income of $226.6 million, or 84 cents a share, for its quarter ended Nov. 30, compared with $215.2 million, or 80 cents a share, a year earlier.

Stripping out one-time items, earnings were 86 cents a share. Analysts polled by FactSet expected adjusted earnings of 88 cents a share.

Quarterly sales rose 2.9% to $1.85 billion, edging out Wall Street forecasts for $1.84 billion. Sales across the company's consumer segment climbed 3.9%, while sales across its flavor-solutions business ticked up 1.4%.

On an organic basis, sales increased 2.1%.

"While global trade dynamics continue to create headwinds and we are facing elevated costs for the year, we are leveraging our competitive advantages, productivity initiatives, and cost management discipline to help mitigate these pressures, sustain volume growth, and fund investments," Foley said.

Looking ahead, McCormick forecast net sales to grow between 13% and 17% in fiscal 2026, boosted by sustained volume growth and increased pricing benefits compared with the previous year. On an organic basis, sales are projected to climb between 1% and 3%.

The company also said its deal to acquire a controlling interest in McCormick de Mexico contributed to its sales outlook.

Adjusted earnings are projected to come in between $3.05 and $3.13 a share.

Wall Street modeled full-year sales of $7.45 billion, which would represent an 8.8% increase from the prior year, as well as adjusted earnings of $3.21 a share.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

January 22, 2026 08:12 ET (13:12 GMT)

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