By Connor Hart

Consumers are showing resilience amid economic uncertainty and higher prices, adjusting their shopping habits and cooking more meals at home, according to McCormick & Co. Chief Executive Brendan Foley.

These trends are benefiting the spice maker, as shoppers gravitate toward larger pack sizes that stretch budgets and buy more seasonings to zhuzh up home-cooked meals, Foley said Thursday on a call with analysts.

"We're not competing for calories. We're flavoring them," he said. "Our portfolio helps consumers bring creativity and enjoyment to the meals they're already preparing and is aligned with how people are eating today."

As a result, McCormick notched higher net sales in its latest quarter, largely driven by volume gains. Looking ahead, the company said it is well positioned to manage higher costs tied to tariffs and backed its outlook for the year.

Shares were trading 5.3% higher, at $77.55, in morning trading, extending their 10% gain over the past year.

McCormick has benefited from aligning itself with consumer trends, as well as remaining agile to changing conditions in the marketplace, Foley said. That stands in contrast to many packaged-food rivals that are grappling with declining volumes, as inflation-weary consumers hunt for deals and pull back on discretionary purchases.

General Mills logged lower profit and sales Wednesday, in part citing a pullback in consumer spending. The cereal maker expects stagnant sales for the year. And Campbell's earlier this month said its business was hurt by shoppers buying less snacks, though the rise in at-home cooking buoyed its meals and beverage unit. The soup maker also warned it will likely hit the low end of full-year guidance due to tariffs.

McCormick expects to incur about $50 million in tariff costs this year, Finance Chief Marcos Gabriel said, though the company expects to offset a significant portion of the levies. The company's global footprint allows many products to be manufactured within the region they are sold, limiting exposure. It also is pursuing alternative sourcing for certain raw materials and taking "a very targeted and surgical approach to pricing," he said.

The Hunt Valley, Md., company continues to expect net sales to be flat to up 2% for the year, boosted by volume-led growth across both its consumer and flavor-solutions segments, along with a gradual recovery in China. Wall Street projects sales to rise 1.3%, to $6.81 billion.

McCormick trimmed its per-share earnings outlook by a penny, now expecting $2.98 to $3.03, while maintaining its adjusted per-share earnings guide at $3.03 to $3.08. Analysts are looking for a profit of $3.01 a share, and adjusted earnings of $3.02 a share, according to FactSet.

The outlook comes as McCormick's fiscal second-quarter sales edged higher and earnings topped expectations.

The company's consumer segment, which includes spice and condiment sales in grocery stores, posted higher volumes, offsetting a decline in the flavor-solutions business, which was weighed down by slowing orders from large foodservice clients.

For its three months ended May 31, McCormick posted net income of $175 million, or 65 cents a share, compared with $184.2 million, or 68 cents a share, a year earlier. Adjusted per-share earnings of 69 cents came in ahead of the 65 cents that analysts expected.

Net sales ticked up 1% to $1.66 billion, in line with Wall Street estimates.

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

(END) Dow Jones Newswires

June 26, 2025 10:57 ET (14:57 GMT)

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