UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the fiscal year ended November 30, 2025
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the transition period from to
Commission file number 001-14920
McCORMICK & COMPANY, INCORPORATED
(Exact name of registrant as specified in its charter)
| Maryland | 52-0408290 | ||||
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | ||||
| 24 Schilling Road, Suite 1, | Hunt Valley, | Maryland | 21031 | ||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
Registrant’s telephone number, including area code: (410) 771-7301
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
| Common Stock, Par Value $0.01 per share | MKC.V | New York Stock Exchange | ||||||
| Common Stock Non-Voting, Par Value $0.01 per share | MKC | New York Stock Exchange | ||||||
Securities registered pursuant to Section 12(g) of the Act: Not applicable.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | ☒ | Accelerated Filer | ☐ | |||||||||||
| Non-accelerated Filer | ☐ | (Do not check if a smaller reporting company) | Smaller Reporting Company | ☐ | ||||||||||
| Emerging Growth Company | ☐ | |||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark if the registrant has filed a report on and attestation on its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked prices of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.
The aggregate market value of the Voting Common Stock held by non-affiliates at May 30, 2025: $1,099,419,345
The aggregate market value of the Non-Voting Common Stock held by non-affiliates at May 30, 2025: $18,403,576,766
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
| Class | Number of Shares Outstanding | Date | ||||||
| Common Stock | 14,851,729 | December 31, 2025 | ||||||
| Common Stock Non-Voting | 253,586,510 | December 31, 2025 | ||||||
DOCUMENTS INCORPORATED BY REFERENCE
| Document | Part of 10-K into Which Incorporated | ||||
| Proxy Statement for McCormick’s March 25, 2026 Annual Meeting of Stockholders (the “2026 Proxy Statement”) | Part III | ||||
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| PART I. | ||
As used herein, references to “McCormick,” “we,” “us,” and “our” are to McCormick & Company, Incorporated and its consolidated subsidiaries or, as the context may require, McCormick & Company, Incorporated only.
ITEM 1. BUSINESS
McCormick is a global leader in flavor. We manufacture, market, and distribute herbs, spices, seasoning mixes, condiments, and other flavorful products to the entire food and beverage industry: retailers, food manufacturers, and foodservice businesses. We also are partners in a number of joint ventures that are involved in the manufacture and sale of flavorful products, the most significant of which is McCormick de Mexico. Our major sales, distribution, and production facilities are located in North America, Europe, and China. Additional facilities are based in Australia, Central America, Thailand, and South Africa.
On January 2, 2026, we completed the purchase of an additional 25% ownership interest in McCormick de Mexico. The purchase price was $750 million, which increased our ownership to a 75% controlling interest. We believe the acquisition creates opportunities for further growth in the Mexican market and provides a strategic platform for further expansion in Latin America. McCormick de Mexico is a prominent food company in Mexico, with a broad portfolio, including mayonnaise, spices, marmalades, mustard, hot sauce, and tea, sold under McCormick brands.
Business Segments
We operate in two business segments: Consumer and Flavor Solutions. Demand for flavor is growing globally, and across both segments, we have the customer base and product breadth to participate in all types of eating occasions. Our products deliver flavor when cooking at home, dining out, purchasing a quick service restaurant meal, or enjoying a snack. We offer our customers and consumers a range of products, extending from premium to value-priced, to meet the increasing demand for certain product attributes including clean-label, organic, natural, reduced sodium, gluten-free, and non-GMO (genetically modified organisms).
Consistent with market conditions in each segment, our Consumer segment has a higher overall profit margin than our Flavor Solutions segment. In 2025, the Consumer segment contributed approximately 58% of consolidated net sales and 67% of consolidated operating income, and the Flavor Solutions segment contributed approximately 42% of consolidated net sales and 33% of consolidated operating income.
Consumer Segment. From locations around the world, our brands reach consumers in approximately 150 countries and territories. Our leading brands in the Americas include McCormick®, French’s®, Frank’s RedHot®, Lawry’s®, Cholula®, and Club House®, as well as brands such as Gourmet Garden® and OLD BAY®. We also market authentic regional brands such as Zatarain’s®, Stubb's®, Thai Kitchen®, and Simply Asia®. In the Europe, Middle East, and Africa (EMEA) region, our major brands include the Ducros®, Schwartz®, Kamis®, and La Drogheria® brands of spices, herbs, and seasonings and an extensive line of Vahiné® brand dessert items. In the Asia/Pacific (APAC) region, we market our spices and seasonings under the McCormick brand, DaQiao®, as well as other brands, our dessert products under the Aeroplane® brand, and packaged chilled herbs under the Gourmet Garden® brand.
Approximately two-thirds of our Consumer segment sales are spices and seasonings and condiments and sauces. Within the spices and seasoning category, we are the brand leader globally and a category leader in our key markets. In the condiments and sauces category, we are one of the brand leaders globally and in the U.S. 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. Some are owned by large food manufacturers, while others are supplied by small privately-owned companies. In this competitive environment, we are leading with innovation and brand marketing, applying our analytical tools to help customers optimize the profitability of their sales of these categories, while simultaneously working to increase our own sales and profit.
Our customers span a variety of retailers that include grocery, mass merchandise, warehouse clubs, discount and drug stores, and e-commerce retailers, served directly and indirectly through distributors or wholesalers. In addition to marketing our branded products to these customers, we are a leading supplier of private label items, also known as store brands. In our businesses in China, foodservice sales are managed by and reported in our Consumer segment.
Flavor Solutions Segment. In our Flavor Solutions segment, we provide a wide range of products to multinational food manufacturers and foodservice customers. The foodservice customers are supplied with branded, packaged products both directly by us and indirectly through distributors, with the exception of our businesses in China, where
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foodservice sales are managed by, and reported in, our Consumer segment. We supply food manufacturers and foodservice customers with customized Flavor Solutions, and many of these customer relationships have been active for decades. Our range of Flavor Solutions remains one of the broadest in the industry and includes seasoning blends, spices and herbs, condiments, coating systems, and compound flavors. In addition to a broad range of Flavor Solutions, our long-standing customer relationships are evidence of our effectiveness in building customer intimacy. Our customers benefit from our expertise in many areas, including sensory testing, culinary research, food safety, and flavor application.
Our Flavor Solutions segment has a number of competitors. Some tend to specialize in a particular range of products and have a limited geographic reach. 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.
Raw Materials
The most significant raw materials used in our business are dairy products, pepper, garlic, onion, capsicums (red peppers and paprika), salt, tomato products, sugar, and soybean oil. Pepper, along with various spices and herbs, is generally sourced from countries outside the U.S. Raw materials such as dairy products, onion and soybean oil are primarily obtained locally, either within the U.S. or from our international locations. Because these raw materials are agricultural products, they are subject to fluctuations in market price and availability caused by weather, growing and harvesting conditions, market conditions, including inflationary cost increases and global trade policies, and other factors beyond our control.
We respond to this volatility in a number of ways, including strategic raw material purchases, purchases of raw material for future delivery, customer price adjustments, and cost savings from our Comprehensive Continuous Improvement (CCI) program. There has been, and there could continue to be, a difference between the timing of when these customer price adjustments and cost savings impact our results of operations and when the impact of cost inflation occurs. Additionally, in some instances, the pricing actions we take have been impacted by price elasticity which unfavorably impacts our sales volume and mix.
In addition, we rely on third-party transportation providers to deliver raw materials and our products to our customers. There has been, and could continue to be, reduced availability of transportation capacity due to labor shortages and higher fuel costs, which have caused and may continue to cause an increase in transportation costs for us and our suppliers.
Customers
Our products are sold directly to customers as well as through brokers, wholesalers, and distributors. In the Consumer segment, products are then sold to consumers under a number of brands through a variety of retail channels, including grocery, mass merchandise, warehouse clubs, discount and drug stores, and e-commerce. In the Flavor Solutions segment, products are used by food and beverage manufacturers as ingredients in their finished goods and by foodservice customers for menu items, as well as provided to their own customers for dine-in and take-out occasions, all to enhance the flavor of their foods. Customers in the Flavor Solutions segment include food manufacturers and the foodservice industry, supplied through a variety of channels, including directly and indirectly through distributors, wholesale foodservice suppliers, and e-commerce.
We have a large number of customers for our products. Sales to one of our Consumer segment customers, Wal-Mart Stores, Inc., accounted for consolidated sales of approximately 12% in 2025, 2024, and 2023. Sales to one of our Flavor Solutions segment customers, PepsiCo, Inc., accounted for consolidated sales of approximately 12% in 2025, and 13% in both 2024 and 2023. In 2025, 2024, and 2023, the top three customers in our Flavor Solutions segment represented 49% of our global Flavor Solutions sales.
Trademarks, Licenses and Patents
We own a number of trademark registrations. Although in the aggregate these trademarks are material to our business, the loss of any one of those trademarks, with the exception of our “McCormick,” “French’s,” “Frank’s RedHot,” “Lawry’s,” “Zatarain’s,” “Cholula,” “Stubb's,” “Club House,” “Ducros,” “Schwartz,” “Vahiné,” "OLD BAY," "Simply Asia," "Thai Kitchen," “Kamis,” “La Drogheria,” "DaQiao," and "Gourmet Garden" trademarks, would not have a material adverse effect on our business. The “Mc – McCormick” trademark is extensively used in connection with the sale of our food products in the U.S. and certain non-U.S. markets. The terms of the trademark registrations are prescribed by law, and the registrations will be renewed as long as we deem them useful.
We have entered into a number of license agreements authorizing the use of our trademarks by affiliated and non-affiliated entities. The loss of these license agreements would not have a material adverse effect on our business.
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The term of the license agreements is generally two-to-three years or until such time as either party terminates the agreement. Those agreements with specific terms may be renewable upon agreement of the parties.
We also own various patents, none of which are individually material to our business.
Seasonality
Due to seasonal factors inherent in the business, our sales, operating income, and cash from operations are generally higher in the fourth quarter because of the holiday season. This seasonality reflects customer and consumer buying patterns, primarily in the Consumer segment.
Working Capital
In order to meet increased demand for our consumer products during our fourth quarter, we usually build our inventories during the third quarter of the fiscal year. We generally finance working capital items (inventory and receivables) through short-term borrowings, which include the use of lines of credit and the issuance of commercial paper. For a description of our liquidity and capital resources, see Note 5 of the notes to our consolidated financial statements and the “Liquidity and Financial Condition” section of “Management’s Discussion and Analysis.”
Competition
Each segment operates in highly competitive markets around the world. In this environment, our growth strategies include customer engagement and product innovation based on consumer insights. In the Consumer segment, we are building brand recognition and loyalty through advertising and promotions. In our Flavor Solutions segment, we differentiate ourselves through culinary and consumer-inspired flavor development, as well as the breadth of our product offering and customer engagement.
Governmental Regulation
We are subject to numerous laws and regulations around the world that apply to our global businesses. In the U.S., the safety, production, transportation, distribution, advertising, labeling, and sale of many of our products and their ingredients are subject to the Federal Food, Drug, and Cosmetic Act; the Food Safety Modernization Act; the Federal Trade Commission Act; state consumer protection laws; competition laws; anti-corruption laws; customs and trade laws; federal, state and local workplace health and safety laws; privacy laws; federal, state, and local environmental protection laws; and other federal, state, and local statutes and regulations. Outside the U.S., our business is subject to numerous similar statutes, laws, and regulatory requirements.
Human Capital
We believe in the power of people and that by working together, every employee is an integral part of driving our success. Our key human capital objective is to attract, develop, and retain the best talent and we employ various human resource programs in support of this objective.
Throughout our global business, we work to create ethical, safe, accessible, and supportive workplaces where all employees thrive and belong. We believe that unlocking the full potential of all employees through inclusion drives innovation, collaboration, and growth, and enhances our competitive advantage. Respect for human rights is central to our business and reflects our commitment to ethical conduct.
We are committed to the safety, health, and well-being of our employees. Our global safety programs focus on hazard prevention to ensure that all our employees have access to safe workplaces that allow them to succeed in their jobs. We offer total rewards programs that support the physical, emotional, and financial well being of our employees.
As of November 30, 2025, we had approximately 14,100 full-time employees worldwide. In the United States, approximately 400 employees are covered by a collective bargaining contract and at our subsidiaries outside the U.S., approximately 2,450 employees are covered by collective bargaining agreements or similar arrangements. We maintain positive and constructive employee relations and our operations have not been affected significantly by work stoppages.
Through our continuous listening strategy, we measure employee engagement and enablement, receiving valuable feedback from our employees on our work environment and culture. The results from these surveys are used to advance programs and processes to enhance employee engagement and improve the overall employee experience.
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Information about our Executive Officers
In addition to the executive officers indicated in the 2026 Proxy Statement incorporated by reference in Part III, Item 10 of this Report, the other executive officer of McCormick is Ana G. Sanchez.
Ms. Sanchez is 51 years old and, during the last five years, has held the following positions with McCormick: February 2022 to present - President, EMEA; and February 2020 to January 2022 – Vice President Consumer, EMEA.
Operations Outside of the U.S.
We are subject in varying degrees to certain risks typically associated with a global business, such as local economic and market conditions, exchange rate fluctuations, and restrictions on investments, royalties, and dividends. In fiscal year 2025, approximately 39% of sales were from non-U.S. operations. For information on how we manage some of these risks, see the “Market Risk Sensitivity” section of “Management’s Discussion and Analysis.”
Forward-Looking Information
Certain statements contained in this report, including statements concerning expected performance such as those relating to net sales, gross margin, earnings, cost savings, special charges including transaction and integration expenses, acquisitions, brand marketing support, volume and product mix, income tax expense, and the impact of foreign currency rates are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by the use of words such as “may,” “will,” “expect,” "should," "anticipate," "intend," “believe,” “plan,” and similar expressions. These statements may relate to: general economic and industry conditions, including consumer spending rates, recessions, interest rates, and availability of capital; expectations regarding sales growth potential in various geographies and markets, including the impact of brand marketing support, product innovation, and customer, channel, category, heat platform, and e-commerce expansion; the expected results of operations of businesses acquired, including the additional 25% ownership interest in McCormick de Mexico; expected trends in net sales, earnings performance, and other financial measures; the expected impact of pricing actions on the Company's results of operations, including our sales volume and mix as well as gross margins; the expected impact of the inflationary cost environment on our business; the anticipated effects of factors affecting our supply chain, including the availability and prices of commodities and other supply chain resources such as raw materials, packaging, labor, and transportation; the potential impact of trade policies, including tariffs; the impact of legal challenges to U.S tariffs; the expected impact of productivity improvements, including those associated with our CCI program and the Global Business Services operating model initiative; the ability to identify, attract, hire, retain, and develop qualified personnel and the next generation of leaders; the impact of ongoing or future geopolitical conflicts, including the potential for broader economic disruption; expected working capital improvements; the anticipated timing and costs of implementing our business transformation initiative, which includes the implementation of a global enterprise resource planning (ERP) system; the expected impact of accounting pronouncements; expectations regarding pension and postretirement plan contributions and anticipated charges associated with those plans; the holding period and market risks associated with financial instruments; the impact of foreign exchange fluctuations; the adequacy of internally generated funds and existing sources of liquidity, such as the availability of bank financing; the anticipated sufficiency of future cash flows to enable payments of interest, repayment of short- and long-term debt, working capital needs, planned capital expenditures, quarterly dividends, and our ability to obtain additional short- and long-term financing or issue additional debt securities; and expectations regarding purchasing shares of McCormick's common stock under the existing repurchase authorization.
These and other forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could significantly affect expected results. Results may be materially affected by factors such as: the Company's ability to drive revenue growth; the Company's ability to increase pricing to offset, or partially offset, inflationary pressures on the cost of our products; damage to the Company's reputation or brand name; loss of brand relevance; increased private label use; the Company's ability to offset cost pressures or business impacts related to trade policies, including tariffs; the Company's ability to drive productivity improvements, including those related to our CCI program and other streamlining actions; product quality, labeling, or safety concerns; negative publicity about our products; actions by, and the financial condition of, competitors and customers; the longevity of mutually beneficial relationships with our large customers; the ability to identify, interpret and react to changes in consumer preference and demand; business interruptions due to natural disasters, unexpected events or public health crises; issues affecting the Company's supply chain and procurement of raw materials, including fluctuations in the cost and availability of raw and packaging materials; labor shortage, turnover and labor cost increases; the impact of changing political and geopolitical conditions, including conflicts and the potential for broader economic disruption; government regulation, and changes in legal and regulatory requirements
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and enforcement practices; the lack of successful acquisition and integration of new businesses; global economic and financial conditions generally, availability of financing, interest and inflation rates, and the imposition of tariffs, quotas, trade barriers and other similar restrictions; foreign currency fluctuations; the effects of our amount of outstanding indebtedness and related level of debt service as well as the effects that such debt service may have on the Company's ability to borrow or the cost of any such additional borrowing, our credit rating, and our ability to react to certain economic and industry conditions; impairments of indefinite-lived intangible assets; assumptions we have made regarding the investment return on retirement plan assets, and the costs associated with pension obligations; the stability of credit and capital markets; risks associated with the Company's information technology systems, including the threat of data breaches and cyber-attacks; the Company's inability to successfully implement our business transformation initiative; fundamental changes in tax laws; including interpretations and assumptions we have made, and guidance that may be issued, and volatility in our effective tax rate; climate change; Environmental, Social and Governance (ESG) matters; infringement of intellectual property rights, and those of customers; litigation, legal and administrative proceedings; the Company's inability to achieve expected and/or needed cost savings or margin improvements; negative employee relations; and other risks described herein under Part I, Item 1A "Risk Factors."
Actual results could differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.
Available Information
Our principal corporate internet website address is: www.mccormickcorporation.com. We make available free of charge through our website our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such documents are electronically filed with, or furnished to, the U.S. Securities and Exchange Commission (the SEC). The information and other content contained on our website are not part of (or incorporated by reference in) this report or any other document we file with the SEC. The SEC maintains an internet website at www.sec.gov that contains reports, proxy and information statements, and other information regarding McCormick. Our website also includes our Corporate Governance Guidelines, Business Ethics Policy and charters of the Audit Committee, Compensation & Human Capital Committee, and Nominating/Corporate Governance Committee of our Board of Directors.
ITEM 1A. RISK FACTORS
The following are certain risk factors that could affect our business, financial condition and results of operations. These risk factors should be considered in connection with evaluating the forward-looking statements contained in this Annual Report on Form 10-K because these factors could cause the actual results and conditions to differ materially from those projected in forward-looking statements. Before you buy our Common Stock or Common Stock Non-Voting, you should know that making such an investment involves risks, including the risks described below. It is not possible for management to predict all such risks, nor can management assess the impact of all such risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ materially from those contained in any forward-looking statements. Additional risks and uncertainties that are not presently known to us or are currently deemed to be immaterial also may materially adversely affect our business, financial condition, or results of operations in the future. If any of the risks actually occur, our business, financial condition or results of operations could be negatively affected. In that case, the trading price of our securities could decline, and you may lose part or all of your investment.
Risks Related to Our Company, Business and Operations
Deterioration of global economic conditions, an economic recession or slow growth, periods of inflation, or economic uncertainty in our key markets may adversely affect customer and consumer spending as well as demand for our products.
Global economic conditions can be uncertain and volatile. Our business and results of operations have in the past been, and may continue to be, adversely affected by changes in global economic conditions including inflation, changes in prevailing interest rates, the impact of any U.S. federal government shutdown, changes in governmental rules and approaches to taxation, challenges in global supply chains including new or increased tariffs or trade restrictions, fluctuations in foreign currency interest rates, availability of capital markets, consumer spending rates, energy availability and costs, the negative impacts caused by pandemics and other local and global public health issues and the effect of governmental initiatives to manage economic conditions. As global economic conditions
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continue to be volatile or economic uncertainty remains, trends in consumer spending also remain unpredictable and subject to reductions due to credit constraints and uncertainties about the future. We are a manufacturer and distributor of flavor products. As such, many of our products are purchased by our customers based on end-user demand from consumers. Some of the factors that may influence consumer spending include general economic conditions, high levels of unemployment, pandemics and public health crises, higher consumer debt levels, reductions in net worth based on market declines and uncertainty, home foreclosures and reductions in home values, fluctuating interest and foreign currency exchange rates and credit availability, fluctuating fuel and other energy costs, fluctuating commodity prices, inflationary pressure, tax rates and general uncertainty regarding the overall future economic environment. Unfavorable economic conditions may lead customers and consumers to delay or reduce purchases of our products. Consumer demand for our products may not reach our targets, or may decline, when there is an economic downturn or economic uncertainty in our key markets. Our sensitivity to economic cycles and any related fluctuation in customer and consumer demand may have a material negative impact on our business, financial conditions or results of operations.
Damage to our reputation or brand name, loss of brand relevance, increase in use of private label or other competitive brands by customers or consumers, competitive pressures in marketing and technology, or product quality or safety concerns could negatively impact our business, financial condition or results of operations.
We have many iconic brands with long-standing consumer recognition. Our success depends on our ability to maintain our brand image for our existing products, extend our brands to new platforms, and expand our brand image with new product offerings.
We continually make efforts to maintain and improve relationships with our customers and consumers and to increase awareness and relevance of our brands through effective marketing and other measures. From time to time, our customers reevaluate their mix of product offerings, and consumers have the option to purchase private label or other competitive products instead of our branded products. In the event that we are unable to supply our products to customers in the time frame and quantities that they desire, whether due to increased demand or other factors, our customers may discontinue all or a portion of their purchases from us and source competitive brands. Certain competitors may also be more successful at utilizing data analytics, artificial intelligence, and other new and emerging technologies and digital experiences as part of their advertising practices. We must also be able to respond successfully to technological advances (including artificial intelligence and machine learning, which may become critical in interpreting consumer preferences in the future), and failure to do so could compromise our competitive position and negatively impact our product sales. If a significant portion of our branded business was switched to private label or competitive products, it could have a material negative impact on our Consumer segment.
Our reputation for manufacturing high-quality products is widely recognized. In order to safeguard that reputation, we have adopted rigorous quality assurance and quality control procedures which are designed to ensure the safety of our products. A serious breach of our quality assurance or quality control procedures, deterioration of our quality image, impairment of our customer or consumer relationships or failure to adequately protect the relevance of our brands may lead to litigation, customers purchasing from our competitors or consumers purchasing other brands or private label items that may or may not be manufactured by us, any of which could have a material negative impact on our business, financial condition or results of operations.
The food industry generally is subject to risks posed by food spoilage and contamination, product tampering, product recall, import alerts and consumer product liability claims. For instance, we may be required to recall certain of our products should they be mislabeled, contaminated or damaged. Additionally, certain of our raw materials could be blocked from entering the country if they were subject to government-imposed actions. We have and may continue to become involved in lawsuits and legal proceedings if it is alleged that the consumption of any of our products could cause injury or illness, or that any of our products are mislabeled or fail to meet applicable legal requirements (even if the allegation is untrue). A product recall, import alert or an adverse result in any such litigation, or negative perceptions regarding food products and ingredients, could result in our having to pay fines or damages, incur additional costs or cause customers and consumers in our principal markets to lose confidence in the safety and quality of certain products or ingredients, any of which could have a negative effect on our business or financial results and, depending upon the significance of the affected product, that negative effect could be material to our business or financial results. Negative publicity about these concerns, whether or not valid, may discourage customers and consumers from buying our products or cause disruptions in production or distribution of our products and adversely affect our business, financial condition or results of operations.
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The rising popularity of social networking and other consumer-oriented technologies has increased the speed and accessibility of information dissemination (whether or not accurate), and, as a result, negative, inaccurate, or misleading posts or comments on websites may generate adverse publicity that could damage our reputation or brands.
Customer consolidation, consumer behaviors, and competitive, economic and other pressures facing our customers, may impact our financial condition or results of operations.
A number of our customers, such as supermarkets, warehouse clubs and food distributors, have consolidated in recent years and consolidation could continue. 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. The economic and competitive landscape for our customers is constantly changing, such as the emergence of new sales channels like e-commerce, and our customers' responses to those changes could impact our business. The continued growth of e-commerce, which has encouraged the entry of new competitors and business models, and its impact of consumer habits and preferences has accelerated in many of the markets we serve and our financial results may be impacted if we are unable to adapt to changing consumer preferences and market dynamics. In addition, our Flavor Solutions segment may be impacted if the reputation or perception of the customers of our Flavor Solutions segment declines. These factors could have an adverse impact on our business, financial condition or results of operations.
The inability to maintain mutually beneficial relationships with large customers could adversely affect our business, financial condition and results of operations.
We have a number of major customers, including two large customers that, in the aggregate, constituted approximately 24% of consolidated sales in 2025. The loss of either of these large customers due to events beyond our control, or a material negative change in our relationship with these large customers or other major customers could have an adverse effect on our business, financial condition and results of operations.
Issues regarding procurement of raw materials may negatively impact us.
Our purchases of raw materials are subject to fluctuations in market price and availability caused by inflationary pressures, weather, growing and harvesting conditions, climate change, market conditions, governmental actions including global trade policies and other factors beyond our control, including outbreaks of illnesses, pandemics or other local or global health issues. The most significant raw materials used by us in our business are dairy products, pepper, garlic, onion, capsicums (red peppers and paprika), salt, tomato products, sugar, and soybean oil. While future price movements of raw material costs are uncertain, we seek to mitigate the market price risk in a number of ways, including strategic raw material purchases, purchases of raw material for future delivery, customer price adjustments and cost savings from our CCI program and other streamlining initiatives. In addition, we enter into financial hedging derivative transactions based on forecasted soybean oil purchases. Other than the soybean oil hedging transactions, we generally have not used derivatives to manage the volatility related to this risk. Any actions we take in response to market price fluctuations may not effectively limit or eliminate our exposure to changes in raw material prices. Therefore, we cannot provide assurance that future raw material price fluctuations will not have a negative impact on our business, financial condition or operating results.
In addition, we may have very little opportunity to mitigate the risk of availability of certain raw materials due to the effect of weather on crop yield, fire, natural disasters, growing and harvesting conditions, government actions, political unrest in producing countries, action or inaction by suppliers in response to laws and regulations, changes in agricultural programs and other factors beyond our control. Therefore, we cannot provide assurance that future raw material availability will not have a negative impact on our business, financial condition or operating results.
Political, socio-economic, cultural, and geopolitical conditions, as well as disruptions caused by terrorist activities or otherwise, could also create additional risks for regulatory compliance. Although we have adopted rigorous quality assurance and quality control procedures which are designed to ensure the safety of our imported products, we cannot provide assurance that such events will not have a negative impact on our business, financial condition or operating results.
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Changes in global trade policies have impacted and may continue to impact our financial condition or results of operations.
Changes in global trade policies, including tariffs, have caused inflationary pressures and higher costs on certain raw materials and imports. These actions have impacted our business through increased costs and uncertainty. If maintained, the tariffs, as well as related measures that have been taken and which could be taken by other countries in the future could pose a risk to our business and results of operations. The extent and duration of the tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as legal challenges to the applicability of these tariffs, negotiations between affected countries, the responses of other countries or regions, exemptions, exclusions or other relief that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets.
Our attempts to offset these pressures through supply chain management initiatives and increases in the selling prices of some of our products may not be successful or may result in reductions in sales volume. To the extent these actions are not sufficient to offset increase costs or result in significant decreases in sales volume, our business, financial condition, or operating results may be adversely affected.
Disruption of our supply chain could adversely affect our business.
Our ability to make, move, and sell products is critical to our success. Damage or disruption to or reduction or termination of raw material supplies or our manufacturing or distribution capabilities due to weather, climate change, natural disaster, fire, international disputes, geopolitical tensions or conflict, terrorism, cyber-attack, health epidemics, pandemics or other contagious outbreaks, governmental restrictions or mandates, strikes, import/export restrictions, global trade policies, or other factors could impair our ability to manufacture or sell our products. Production of certain of our products is highly concentrated, and some are manufactured at a single location. The failure of third parties on which we rely, including those third parties who supply our ingredients, packaging, capital equipment and other necessary operating materials, contract manufacturers, commercial transport, distributors, contractors, and external business partners, to meet their obligations to us, or significant disruptions in their ability to do so, may negatively impact our operations. Our suppliers’ policies and practices can damage our reputation and the quality and safety of our products. Disputes with significant suppliers, including disputes regarding pricing or performance, could adversely affect our ability to supply products to our customers and could materially and adversely affect our sales, financial condition, and results of operations. Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, particularly when a product is manufactured from a single location, could adversely affect our business and results of operations, as well as require additional resources to restore our supply chain.
Moreover, short term or sustained increases in consumer demand at our customers may exceed our production capacity or otherwise strain our supply chain. Our failure to meet the demand for our products could adversely affect our business and results of operations.
Our results of operations can be adversely affected by labor shortages, turnover and labor cost increases or any failure to effectively manage changes in our workforce.
Labor is a primary component of operating our business. A number of factors may adversely affect the labor force available to us or increase labor costs such as hybrid or remote work arrangements, higher unemployment subsidies, other government regulations and general macroeconomic factors. A sustained labor shortage or increased turnover rates within our employee base could lead to increased costs, such as increased overtime to meet demand and increased wage rates and employee benefits costs to attract and retain employees and could negatively affect our ability to efficiently operate our manufacturing and distribution facilities and overall business. If we are unable to hire and retain employees capable of performing at a high-level, or if mitigation measures we may take to respond to a decrease in labor availability, such as overtime and third-party outsourcing, have negative effects, our business could be adversely affected. In addition, we distribute our products and receive raw materials primarily by truck. Reduced availability of trucking capacity due to shortages of drivers has caused an increase in the cost of transportation for us and our suppliers. An overall labor shortage, lack of skilled labor, increased turnover or labor inflation could have a material adverse impact on our business, financial condition or operating results.
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We may not be able to increase prices to fully offset inflationary and other pressures on costs, such as raw and packaging materials, labor and distribution costs, which may impact our financial condition or results of operations.
As a manufacturer and distributor of flavor products, we rely on raw materials, packaging materials, plant labor, distribution resources, and transportation providers. We have experienced inflation of commodity and supply chain costs, including the costs of raw materials, packaging materials, labor, energy, fuel, transportation and other inputs necessary for the production and distribution of our products, and we expect inflation to continue in 2026 at a similar level to that experienced in 2025. In addition, many of these materials and costs are subject to price fluctuations from a number of factors, including, but not limited to, market conditions, demand for raw materials, weather, growing and harvesting conditions, climate change, energy costs, currency fluctuations, supplier capacities, governmental actions, import and export requirements, global trade policies (including tariffs and retaliatory measures), armed hostilities (including the ongoing geopolitical conflicts) and other factors beyond our control.
Our attempts to offset these cost pressures, such as through increases in the selling prices of some of our products, may not be successful. Higher product prices may result in reductions in sales volume. Consumers may be less willing to pay a price differential for our branded products and may increasingly purchase lower-priced offerings, or may forego some purchases altogether, during an economic downturn or times of increased inflationary pressure. To the extent that price increases are not sufficient to offset these increased costs adequately or in a timely manner, and/or if they result in significant decreases in sales volume, our business, financial condition or operating results may be adversely affected. Furthermore, we may not be able to fully offset any cost increases through our productivity or efficiency initiatives.
Our profitability may suffer as a result of competition in our markets.
The food industry is intensely competitive. Competition in our product categories is based on price, product innovation, product quality, brand recognition and loyalty, effectiveness of marketing and promotional activity, and the ability to identify and satisfy consumer preferences. Weak economic conditions, recessions, significant inflation and other factors, such as pandemics, could affect consumer preferences and demand. From time to time, we may need to reduce the prices for some of our products to respond to competitive and customer pressures, particularly during periods of economic uncertainty or significant inflation, which may adversely affect our profitability. Such pressures could reduce our ability to take appropriate remedial action to address commodity and other cost increases.
Changing political and geopolitical conditions, including conflicts and the related implications may negatively impact our operations.
Changes in the political conditions in markets in which we manufacture, sell or distribute our products, as well as changing geopolitical conditions, including conflicts, may be difficult to predict and may adversely affect our business and financial results. Results of elections, referendums, sanctions or other political processes and pressures in certain markets in which our products are manufactured, sold or distributed have created and could continue to create uncertainty regarding how existing governmental policies, laws and regulations may change, including with respect to sanctions, taxes, tariffs, import and export controls and the general movement of goods, materials, services, capital, data and people between countries.
The global economy has been negatively impacted by changing political and geopolitical conditions, including conflicts. Our business, financial condition and results of operations have been impacted in the past and may be impacted in the future by disruptions in the global economy associated with these changes in political and geopolitical conditions. Geopolitical instability has, and could result in, a negative impact on our ability to sell to, ship products to, collect payments from, and support customers in certain regions based on trade restrictions, embargoes and export control law restrictions, and logistics restrictions, and could increase the costs, risks and adverse impacts from supply chain and logistical challenges.
The scope and duration of such conflicts are uncertain, rapidly changing, and hard to predict. While we expect the impacts of these conflicts to continue to have an effect on our business, financial condition and results of operations, we are unable to predict the extent or nature of these impacts at this time. Further changes in political and geopolitical conditions, including increased trade barriers or restrictions on global trade, could result in, among other things, cyberattacks, supply disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets, any of which may adversely affect our business and supply chain operations. In addition, the effects of these political and geopolitical conditions could also heighten many of the other risk factors described herein.
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Our operations may be impaired as a result of disasters, business interruptions or similar events.
We could have an interruption in our business, loss of inventory or data, or be rendered unable to accept and fulfill customer orders as a result of a natural disaster, catastrophic event, epidemic, computer system failure, or cyber-attack. Natural disasters could include an earthquake, fire, floods, drought, tornado, hurricane or severe storm. A catastrophic event could include a terrorist attack. A health epidemic, pandemic, or other contagious outbreak could affect our operations, major facilities or employees’ and consumers’ health. In addition, some of our inventory and production facilities are located in areas that are susceptible to harsh weather; a severe storm, flood, wildfires, heavy snowfall or other similar event could prevent us from delivering products in a timely manner and negatively impact consumer spending and demand in affected areas. Production of certain of our products is highly concentrated, and some are manufactured at a single location.
We cannot provide assurance that our disaster recovery plan will address all of the issues we may encounter in the event of a disaster or other unanticipated issue, and our business interruption insurance may not adequately compensate us for losses that may occur from any of the foregoing. In the event that a natural disaster, terrorist attack or other catastrophic event were to destroy any part of our facilities or interrupt our operations for any extended period of time, or prevent us from delivering products in a timely manner, our business, financial condition or operating results could be adversely affected.
We may not be able to successfully consummate and manage ongoing acquisition, joint venture and divestiture activities which could have an impact on our results.
From time to time, we may, based on an evaluation of our business portfolio, acquire other businesses and/or divest existing businesses. These acquisitions, such as the additional 25% incremental ownership acquired in McCormick de Mexico on January 2, 2026, joint ventures and divestitures may present financial, managerial and operational challenges, including diversion of management attention from existing businesses, difficulty with integrating or separating personnel and financial and other systems, increased expenses and raw material costs, assumption of unknown liabilities and indemnities, and potential disputes with the buyers or sellers. In addition, we may be required to incur asset impairment charges (including charges related to goodwill and other intangible assets) in connection with acquired businesses, which may reduce our profitability. If we are unable to consummate such transactions, or successfully integrate and grow acquisitions and achieve contemplated revenue synergies and cost savings, our financial results could be adversely affected. Additionally, joint ventures inherently involve a lesser degree of control over business operations, thereby potentially increasing the financial, legal, operational, and/or compliance risks.
An impairment of the carrying value of goodwill or other indefinite-lived intangible assets could adversely affect our results.
As of November 30, 2025, we had approximately $5.3 billion of goodwill and approximately $3.0 billion of other indefinite-lived intangible assets. Goodwill and indefinite-lived intangible assets are initially recorded at fair value and not amortized but are tested for impairment at least annually or more frequently if impairment indicators arise. We test goodwill at the reporting unit level by comparing the carrying value of the net assets of the reporting unit, including goodwill, to the unit's fair value. Similarly, we test indefinite-lived intangible assets by comparing the fair value of those assets to their carrying values. If the carrying values of the reporting unit or indefinite-lived intangible assets exceed their fair value, the goodwill or indefinite-lived intangible assets are considered impaired and reduced to their estimated fair value. Factors that could result in an impairment include a change in revenue growth rates, operating margins, weighted average cost of capital, future economic and market conditions, higher income tax rates, or assumed royalty rates. The impairment of our goodwill or indefinite-lived intangible assets would have a negative impact on our consolidated results of operations.
Streamlining actions to reduce fixed costs, simplify or improve processes, and improve our competitiveness may have a negative effect on employee relations.
We regularly evaluate whether to implement changes to our organization structure to reduce fixed costs, simplify or improve processes, and improve our competitiveness, and we expect to continue to evaluate such actions in the future. From time to time, those changes are of such significance that we may transfer production from one manufacturing facility to another; transfer certain selling and administrative functions from one location to another; eliminate certain manufacturing, selling and administrative positions; and exit certain businesses or lines of business. These actions may result in a deterioration of employee relations at the impacted locations or elsewhere in our business.
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If we are unable to fully realize the benefits from our CCI program or streamlining actions to reduce fixed costs, simplify or improve our competitiveness, our financial results could be negatively affected.
Our future success depends in part on our ability to be an efficient producer in a highly competitive industry, including our plan to eliminate costs under our CCI program. Any failure by us to achieve our planned cost savings and efficiencies under our CCI program, an ongoing initiative to improve productivity and reduce costs throughout the organization, or other similar programs, could have an adverse effect on our business, results of operations and financial position.
Fluctuations in foreign currency markets may negatively impact us.
We are exposed to fluctuations in foreign currency in the following main areas: cash flows related to raw material purchases; the translation of foreign currency earnings to U.S. dollars; the effects of foreign currency on loans between subsidiaries and unconsolidated affiliates and on cash flows related to repatriation of earnings of unconsolidated affiliates. We have both translation and transaction exposures to the fluctuation of exchange rates. Translation exposures relate to exchange rate impacts of measuring income statements of foreign subsidiaries that do not use the U.S. dollar as their functional currency. Transaction exposures relate to the impact from input costs that are denominated in a currency other than the local reporting currency and the revaluation of transaction-related working capital balances or loans between subsidiaries and unconsolidated affiliates denominated in currencies other than the functional currency. Historically, weakening of certain foreign currencies versus the U.S. dollar have resulted in significant foreign exchange impacts leading to lower net sales, net earnings and cash flows. Primary exposures include the U.S. dollar versus the Euro, British pound sterling, Chinese renminbi, Canadian dollar, Australian dollar, Polish zloty, Singapore dollar, Swiss franc, and Mexican peso, as well as the Euro versus the British pound sterling and Australian dollar, and Polish zloty. We routinely enter into foreign currency exchange contracts to facilitate managing certain of these foreign currency risks. However, these contracts may not effectively limit or eliminate our exposure to a decline in operating results due to foreign currency exchange changes. Therefore, we cannot provide assurance that future exchange rate fluctuations will not have a negative impact on our business, financial position or operating results.
We face risks associated with certain pension assets and obligations.
We hold investments in equity and debt securities in our qualified defined benefit pension plans and in a rabbi trust for our U.S. non-qualified pension plan. Deterioration in the value of plan assets resulting from a general financial downturn or otherwise, or an increase in the actuarial valuation of the plans' liability due to a low interest rate environment, could cause (or increase) an underfunded status of our defined benefit pension plans, thereby increasing our obligation to make contributions to the plans. An obligation to make contributions to pension plans could reduce the cash available for working capital and other corporate uses, and may have an adverse impact on our operations, financial condition and liquidity.
Climate change, or legal, regulatory or market measures to address climate change, may negatively affect our business, financial condition and results of operations.
Unseasonable or unusual weather or long-term climate changes may negatively impact the price or availability of spices, herbs and other raw materials. Scientific consensus shows that greenhouse gases in the atmosphere have an adverse impact on global temperatures, weather patterns and the frequency and severity of extreme weather and natural disasters, which may result in more intense effects. In the event that such climate change has a negative effect on agricultural productivity or practices, we may be subject to decreased availability or less favorable pricing for certain commodities that are necessary for our products. As a result of climate change, we may also be subjected to decreased availability of water, deteriorated quality of water or less favorable pricing for water, which could adversely impact our manufacturing and distribution operations. In addition, such climate change may result in modifications to the eating preferences of the ultimate consumers of certain of our products, which may also unfavorably impact our sales and profitability. The physical effects and transitional costs of climate change and the legal, regulatory or market initiatives to address climate change could have a negative impact on our business, financial condition, and results of operations.
There has been an increased focus by foreign, federal, state and local regulatory and legislative bodies regarding environmental policies relating to climate change, regulating greenhouse gas emissions (including carbon pricing, cap and trade systems, or carbon taxes) and imposing mandatory reporting requirements, energy policies, and sustainability. Increased compliance costs and expenses due to the impacts of climate change and additional legal or regulatory requirements regarding climate change that are designed to reduce or mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment may cause disruptions in, or an increase in the
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costs associated with, the running of our manufacturing facilities and our business, as well as increase distribution and supply chain costs. Moreover, compliance with any such legal or regulatory requirements may require us to make significant changes in our business operations and strategy, which will likely require us to devote substantial time and attention to these matters and cause us to incur additional costs. Even if we make changes to align ourselves with such legal or regulatory requirements, we may still be subject to significant penalties or potential litigation if such laws and regulations are interpreted and applied in a manner inconsistent with our practices. The effects of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business and results of operations.
Additionally, we might fail to effectively address increased attention from the media, stockholders, activists and other stakeholders on climate change and related environmental sustainability matters. Such failure, or the perception that we have failed to act responsibly regarding climate change, whether or not valid, or based in fact, could result in adverse publicity and negatively affect our business and reputation.
Moreover, from time to time we establish and publicly announce goals and commitments, including to reduce our impact on the environment. For example, we established science-based target 2025 – 2030 goals for Scope 1, 2 and 3 greenhouse gas emissions. Our ability to achieve any stated goal, target or objective is subject to numerous factors and conditions, many of which are outside of our control. Examples of such factors include evolving regulatory requirements affecting sustainability standards or disclosures or imposing different requirements, the pace of changes in technology, the availability of requisite financing and the availability of suppliers that can meet our sustainability and other standards and changing business dynamics including acquisitions. Furthermore, standards for tracking and reporting such matters continue to evolve. Our selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others. Methodologies for reporting these data may be updated and previously reported data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations (including from acquisitions and divestitures), and other changes in circumstances, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future. If we fail to achieve, or are perceived to have failed or been delayed in achieving, or improperly report our progress toward achieving these goals and commitments, it could negatively affect consumer or customer preference for our products or investor confidence in our stock, as well as expose us to enforcement actions and litigation.
In addition, we could be criticized by those opposed to environmental and sustainability efforts for the scope or nature of our initiatives or goals or for any revisions to these goals. We could also be subjected to negative responses by governmental actors (such as legislation or retaliatory legislative treatment) or consumers (such as boycotts or negative publicity campaigns) that could adversely affect our reputation, business, financial performance and growth.
Climate change and sustainability issues may have an adverse effect on our business, financial condition and results of operations and damage our reputation.
Companies across all industries are facing increasing scrutiny relating to their sustainability policies. If we are unable to meet our goals or evolving investor, industry or stakeholder expectations and standards related to these issues, or if we are perceived to have not responded appropriately to the growing concern for these issues or negative incidents, it could erode customer confidence and customers and consumers may choose to stop purchasing our products or purchase products from another company or a competitor, and our reputation, business or financial condition may be adversely affected. Increased focus and activism on these topics may hinder our access to capital, as investors may reconsider their capital investment as a result of their assessment of our practices. In particular, these constituencies are increasingly focusing on environmental issues, including climate change, water use, deforestation, plastic waste, and other sustainability concerns. Changing consumer preferences may result in increased demands regarding plastics and packaging materials, including single-use and non-recyclable plastic packaging, and other components of our products and their environmental impact on sustainability; a growing demand for natural or organic products and ingredients; or increased consumer concerns or perceptions (whether accurate or inaccurate) regarding the effects of ingredients or substances present in certain consumer products. These demands could impact the profitability of some of our products or cause us to incur additional costs, to make changes to our operations to make additional commitments, set targets or establish additional goals and take actions to meet them, which could expose us to market, operational and execution costs or risk.
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In addition to environmental issues these constituencies are also focused on social and other governance issues, including matters such as, but not limited to, human capital and social issues. We have established initiatives that extend from individuals to entire communities, including those we serve and, just as importantly, those from which we source. Failure to attract, hire, develop, motivate and retain the best executive and employee talent, especially in light of changing worker expectations and talent marketplace variability regarding flexible and hybrid work models, relating to fostering inclusive culture for all employees could impact our ability to achieve our business objectives and adversely affect our future success.
Concern over climate change, including plastics and packaging materials, in particular, may result in new or increased legal and regulatory requirements. Increased regulatory requirements related to environmental causes, and related disclosure rules may result in increased compliance costs or increased costs of energy, raw materials or compliance with emissions standards, which may cause disruptions in the manufacture of our products or an increase in operating costs. Any failure to achieve our goals or a perception (whether or not valid) of our failure to act responsibly with respect to the environmental, human capital, or social issues, or to effectively respond to new, or changes in, legal or regulatory requirements concerning environmental or other sustainability matters, or increased operating or manufacturing costs due to increased regulation or environmental causes could adversely affect our business and reputation and increase risk of litigation.
Risks Relating to Credit and Capital Markets, Our Credit Rating, Borrowings and Dividends
Increases in interest rates or changes in our credit ratings may negatively impact us.
On November 30, 2025, we had total outstanding variable rate debt of approximately $351.8 million at a weighted-average interest rate of approximately 4.06%. The interest rates under our revolving credit facilities can vary based on our credit ratings. We also regularly access the commercial paper markets for ongoing funding requirements. A downgrade in our credit ratings would increase our borrowing costs and could affect our ability to issue commercial paper. Additionally, disruptions in the commercial paper market or other effects of volatile economic conditions on the credit markets could also reduce the amount of commercial paper that we could issue and raise our borrowing costs. Our policy is to manage our interest rate risk by entering into both fixed and variable rate debt arrangements. We also use interest rate swaps to minimize worldwide financing cost and to achieve a desired mix of fixed and variable rate debt. On November 30, 2025, we had total outstanding fixed to variable interest rate swaps with a notional value of $500 million. We utilize derivative financial instruments to enhance our ability to manage risk, including interest rate exposures that exist as part of our ongoing business operations. We do not enter into contracts for trading purposes, nor are we a party to any leveraged derivative instruments. Our use of derivative financial instruments is monitored through regular communication with senior management and the utilization of written guidelines. However, our use of these instruments may not effectively limit or eliminate our exposure to changes in interest rates. Therefore, we cannot provide assurance that future credit rating or interest rate changes will not have a material negative impact on our business, financial position or operating results.
Our credit ratings impact the cost and availability of future borrowings and, accordingly, our cost of capital.
Our credit ratings reflect each rating organization's opinion of our financial strength, operating performance and ability to meet our debt obligations. Any reduction in our credit ratings may limit our ability to borrow as well as the interest rates that are associated with any such borrowing. If our credit ratings are downgraded or put on watch for a potential downgrade, we may not be able to sell additional debt securities or borrow money in the amounts, at the times or interest rates, or upon the more favorable terms and conditions that might be available if our current credit ratings were maintained.
We may incur additional indebtedness to finance our acquisitions that may limit our ability to, among other matters, issue additional indebtedness, meet our debt service requirements, react to rising interest rates, comply with certain covenants and compete with less highly leveraged competitors.
We have a significant amount of indebtedness outstanding. As of November 30, 2025, our indebtedness of McCormick and its subsidiaries is approximately $4.0 billion. This substantial level of indebtedness could have important consequences to our business, including, but not limited to:
•increasing our debt service obligations, making it more difficult for us to satisfy our obligations;
•limiting our ability to borrow additional funds;
•increasing our exposure to negative fluctuations in interest rates;
•subjecting us to financial and other restrictive covenants, the non-compliance with which could result in an event of default;
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•increasing our vulnerability to, and reducing our flexibility to respond to, general adverse economic and industry conditions;
•limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and
•placing us at a competitive disadvantage as compared to our competitors, to the extent that they are not as highly leveraged.
The deterioration of credit and capital markets may adversely affect our access to sources of funding.
We rely on our revolving credit facilities, or borrowings backed by these facilities, to fund a portion of our working capital needs and other general corporate purposes, including funding of acquisitions. If any of the banks in the syndicates backing these facilities were unable to perform on its commitments, our liquidity could be impacted, which could adversely affect funding of seasonal working capital requirements. We engage in regular communication with all of the banks participating in our revolving credit facilities. During these communications, none of the banks have indicated that they may be unable to perform on their commitments. In addition, we periodically review our banking and financing relationships, considering the stability of the institutions, pricing we receive on services and other aspects of the relationships. Based on these communications and our monitoring activities, we believe the likelihood of one of our banks not performing on its commitment is remote.
In addition, global capital markets have experienced volatility in the past, including related to recession, financial instability or inflation, that has tightened access to capital markets and other sources of funding, and such volatility and tightened access could reoccur in the future. In the event that we need to access the capital markets or other sources of financing, there can be no assurance that we will be able to obtain financing on acceptable terms or within an acceptable time period. Our inability to obtain financing on acceptable terms or within an acceptable time period could have an adverse impact on our operations, financial condition and liquidity.
Uncertain global economic conditions expose us to credit risks from customers and counterparties.
Consolidations in some of the industries in which our customers operate have created larger customers, some of which are highly leveraged. In addition, competition has increased with the growth in alternative channels through our customer base. These factors have caused some customers to be less profitable and increased our exposure to credit risk. Current credit markets are volatile, and some of our customers and counterparties are highly leveraged. A significant adverse change in the financial and/or credit position of a customer or counterparty could require us to assume greater credit risk relating to that customer or counterparty and could limit our ability to collect receivables. This could have an adverse impact on our financial condition and liquidity.
The declaration, payment and amount of dividends is made at the discretion of our board of directors and depends on a number of factors.
The declaration, payment and amount of any dividends is made pursuant to our dividend policy and is subject to final determination each quarter by our board of directors in its discretion based on a number of factors that it deems relevant, including our financial position, results of operations, available cash resources, cash requirements and alternative uses of cash that our board of directors may conclude would be in the best interest of the company and our stockholders. Our dividend payments are subject to solvency conditions established by the Maryland General Corporation Law. Accordingly, there can be no assurance that any future dividends will be equal or similar in amount to any dividends previously paid or that our board of directors will not decide to reduce, suspend or discontinue the payment of dividends at any time in the future.
Risks Related to Intellectual Property, Information Technology, and Cybersecurity
Our intellectual property rights, and those of our customers, could be infringed, challenged or impaired, and reduce the value of our products and brands or our business with customers.
We possess intellectual property rights that are important to our business, and we are provided access by certain customers to particular intellectual property rights belonging to such customers. These intellectual property rights include ingredient formulas, trademarks, copyrights, patents, business processes and other trade secrets which are important to our business and relate to some of our products, our packaging, the processes for their production, and the design and operation of equipment used in our businesses. We protect our intellectual property rights, and those of certain customers, globally through a variety of means, including trademarks, copyrights, patents and trade secrets, third-party assignments and nondisclosure agreements, and monitoring of third-party misuses of intellectual property in traditional retail and digital environments. If we fail to obtain or adequately protect our intellectual
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property (and the intellectual property of customers to which we have been given access), the value of our products and brands could be reduced and there could be an adverse impact on our business, financial condition and results of operations.
Our operations and reputation may be impaired if our information technology systems fail to perform adequately or if we are the subject of a data breach or cyber-attack.
Our information technology systems are critically important to operating our business. We rely on our information technology systems, some of which are or may be managed or hosted by or outsourced to third party service providers, to manage our business data, communications, supply chain, order entry and fulfillment, and other business processes. If we do not allocate and effectively manage the resources necessary to build, sustain, and protect appropriate information technology systems and infrastructure, or we do not effectively implement system upgrades or oversee third party service providers, our business or financial results could be negatively impacted. The failure of our information technology systems to perform as we anticipate could disrupt our business and could result in transaction or reporting errors, processing inefficiencies and the loss of sales and customers, causing our business and results of operations to suffer.
Furthermore, our information technology systems, and the systems of our customers, vendors, suppliers, and other third-party service providers, are subject to cyber-attacks or other security incidents including computer viruses or other malicious codes, phishing attacks, unauthorized access attempts, cyber extortion, business email compromise, deepfake or social engineering schemes, denial of service attacks, hacking, ransomware, or other cyberattacks attempting to exploit vulnerabilities. Cybercriminals have increasingly demonstrated advanced capabilities, such as use of zero-day vulnerabilities, and rapid integration of new technology such as generative artificial intelligence. Such incidents could result in unauthorized access to information including customer, consumer or other company confidential data as well as disruptions to operations. Continued geopolitical conflicts have overall heightened the risk of cyberattacks. We, and the third-parties we do business with, have experienced in the past, and expect to continue to experience, cybersecurity threats and attacks, although to date none had a material impact on our operations or business. To address the risks to our information technology systems and data, we maintain an information security program that includes updating technology, developing security policies and procedures, implementing and assessing the effectiveness of controls, monitoring and routine testing of our information systems, conducting risk assessments of third-party service providers and designing business processes to mitigate the risk of such breaches. We believe that these preventative actions provide adequate measures of protection against security breaches and generally reduce our cybersecurity risks. However, cyber-threats are constantly evolving, are becoming more sophisticated including through the increased adoption of artificial intelligence and are being made by groups of individuals with a wide range of expertise and motives, which increases the difficulty of detecting and successfully defending against them. There can be no assurance that these measures will prevent or limit the impact of a future incident. Moreover, the development and maintenance of these measures require continuous monitoring as technologies change and efforts to overcome security measures evolve and leverage artificial intelligence. Additionally, we rely on services provided by third-party vendors for certain information technology processes and functions, which makes our operations vulnerable to a failure by any one of these vendors to perform adequately or maintain effective internal controls. If we are unable to prevent or adequately respond to and resolve an incident, it may have a material, negative impact on our operations or business reputation, and we may experience other adverse consequences such as loss of assets, remediation costs, litigation, regulatory investigations, and the failure by us to retain or attract customers following such an event.
If we are not able to successfully implement our business transformation initiative or utilize information technology systems and networks effectively, our ability to conduct our business may be negatively impacted.
We continue to implement our multi-year business transformation initiative to execute significant change to our global processes, capabilities and operating model , including in our Global Business Services (GBS) operating model initiative, in order to provide a scalable platform for future growth, while reducing costs. As technology provides the backbone for greater process alignment, information sharing and scalability, we are also making investments in our information systems, including the multi-year program to replace our enterprise resource planning (ERP) system currently underway, which includes the transformation of our financial processing systems to enterprise-wide systems solutions. These systems implementations are part of our ongoing business transformation initiative, and we currently plan to implement these systems throughout all parts of our businesses. If we do not allocate and effectively manage the resources necessary to build and sustain the proper information technology infrastructure, or if we fail to achieve the expected benefits from this initiative, it may impact our ability to process
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transactions accurately and efficiently and remain in step with the changing needs of our business, which could result in the loss of customers and revenue. In addition, failure to either deliver the applications on time or anticipate the necessary readiness and training needs, could lead to business disruption and loss of customers and revenue. In connection with these implementations and resulting business process changes, we continue to enhance the design and documentation of business processes and controls, including our internal control over financial reporting processes, to maintain effective controls over our financial reporting.
We utilize cloud-based services and systems and networks managed by third-party vendors to process, transmit and store information and to conduct certain of our business activities and transactions with employees, customers, vendors and other third parties. Our utilization of these cloud-based services and systems will increase as we implement our business transformation initiatives. If any of these third-party service providers or vendors do not perform effectively, or if we fail to adequately monitor their performance (including compliance with service-level agreements or regulatory or legal requirements), we may have to incur additional costs to correct errors made by such service providers, our reputation could be harmed or we could be subject to litigation, claims, legal or regulatory proceedings, inquiries or investigations. Depending on the function involved, such errors may also lead to business disruption, processing inefficiencies, the loss of or damage to intellectual property or sensitive data through security breaches or otherwise, incorrect or adverse effects on financial reporting, litigation or remediation costs, or damage to our reputation, which could have a negative impact on employee morale. In addition, the management of multiple third-party service providers increases operational complexity and decreases our control.
Risks Related to Our Global Business, Litigation, Laws and Regulations
Laws and regulations could adversely affect our business.
Food products are extensively regulated in most of the countries in which we sell our products. We are subject to numerous laws and regulations relating to the growing, sourcing, manufacturing, storage, labeling, marketing, advertising and distribution of food products, as well as laws and regulations relating to financial reporting requirements, the environment, consumer protection, product design, competition, anti-corruption, privacy, machine learning and artificial intelligence, relations with distributors and retailers, foreign supplier verification, customs and trade laws, including the import and export of products and product ingredients, employment, and health and safety. Changes in global trade policies, including tariffs, have impacted and may continue to impact our financial condition or results of operations. Enforcement of existing laws and regulations, including changes in the enforcement priorities of regulators, changes in legal requirements, and/or evolving interpretations of existing regulatory requirements may result in increased compliance costs and create other obligations, financial or otherwise, that could adversely affect our business, financial condition or operating results. Increased regulatory scrutiny of, and increased litigation involving, product claims and concerns regarding the attributes of food products and ingredients may increase compliance costs and create other obligations that could adversely affect our business, financial condition or operating results. Governments may also impose requirements and restrictions that impact our business, such as labeling disclosures pertaining to ingredients. For example, "Proposition 65, the Safe Drinking Water and Toxic Enforcement Act of 1986," in California exposes all food companies to the possibility of having to provide warnings on their products in that state. If we were required to add warning labels to any of our products or place warnings in locations where our products are sold in order to comply with Proposition 65, the sales of those products and other products of our company could suffer, not only in those locations but elsewhere. We are subject to continued legislative and regulatory developments with respect to food ingredients at the state and federal levels, as well as related changes in consumer expectations and behavior. In April 2025, the Food and Drug Administration (FDA) called on the industry to phase out all “petroleum-based synthetic dyes” from the nation’s food supply, and in May 2025, the Make America Healthy Again (MAHA) Commission published an assessment report discussing factors contributing to chronic childhood disease including diet, environmental exposure, lack of physical activity and healthcare. The MAHA Commission publicly released its strategy report, setting forth certain recommendations for addressing chronic childhood disease, in September 2025. While the effects of these proposals remain uncertain at this time, changes to laws and regulations could impact our business, financial condition and results of operations.
In addition, there are various compliance obligations for companies that process personal data of certain individuals, including such obligations required by the European Union’s General Data Protection Regulation (GDPR), which affects all member states of the European Economic Area, and the California Consumer Privacy Act (CCPA) and other state comprehensive privacy laws. These types of data privacy laws create a range of compliance obligations for companies that process personal data of certain individuals and increases financial penalties for non-compliance. We expect there will continue to be new, and amendments to existing, laws, regulations and industry standards concerning privacy, data protection and information security proposed and enacted in the U.S. and outside of the U.S. Our efforts to comply with these privacy and data protection laws may not be successful, or may
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be perceived to be unsuccessful, which could adversely affect our business in the U.S., the European Union and in other countries.
There also is the threat of consumer class actions related to these laws and the overall protection of personal data. Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our reputation and our business.
Litigation, legal or administrative proceedings could have an adverse impact on our business and financial condition or damage our reputation.
We are party to a variety of legal claims and proceedings in the ordinary course of business. In addition, we may be subject to additional kinds of claims in the future, including consumer class actions related to privacy and data security and the overall protection of personal data. Since litigation is inherently uncertain, there is no guarantee that we will be successful in defending ourselves against such claims or proceedings, or that management’s assessment of the materiality or immateriality of these matters, including any reserves taken in connection with such matters, will be consistent with the ultimate outcome of such claims or proceedings. In the event that management’s assessment of the materiality or immateriality of current claims and proceedings proves inaccurate, or litigation that is material arises in the future, there may be a material adverse effect on our financial condition. Any adverse publicity resulting from allegations made in litigation claims or legal or administrative proceedings (even if untrue) may also adversely affect our reputation. These factors and others could have an adverse impact on our business and financial condition or damage our reputation.
Our international and cross-border operations are subject to additional risks.
We operate our business and market our products internationally. In fiscal year 2025, approximately 39% of our sales were generated in countries other than the U.S. Our international operations are subject to additional risks, including fluctuations in currency values, foreign currency exchange controls, discriminatory fiscal policies, compliance with U.S. and foreign laws, enforcement of remedies in foreign jurisdictions and other economic or political uncertainties. Several countries within the European Union continue to experience sovereign debt and credit issues, which causes more volatility in the economic environment throughout the European Union and the U.K. Additionally, sales in countries other than the U.S., together with finished goods and raw materials imported into the U.S., are subject to risks related to fundamental changes to tax laws as well as the imposition of tariffs, quotas, trade barriers and other similar restrictions. All of these risks could result in increased costs or decreased revenues, which could adversely affect our profitability.
The global nature of our business, changes in tax legislation and the resolution of tax uncertainties create volatility in our effective tax rate.
As a global business, our tax rate from period to period can be affected by many factors, including changes in tax
legislation, our global mix of earnings, the tax characteristics of our income, acquisitions and dispositions, adjustments to our reserves related to uncertain tax positions, changes in valuation allowances, and the portion of the income of international subsidiaries that we expect to remit to the U.S. and that will be taxable.
In addition, significant judgment is required in determining our effective tax rate and in evaluating our tax positions. We establish accruals for certain tax contingencies when, despite the belief that our tax return positions are appropriately supported, the positions are uncertain. The tax contingency accruals are adjusted in light of changing facts and circumstances, such as the progress of tax audits, case law and emerging legislation. Our effective tax rate includes the impact of tax contingency accruals and changes to those accruals, including related interest and penalties, as considered appropriate by management. When particular matters arise, a number of years may elapse before such matters are audited and finally resolved. Favorable resolution of such matters could be recognized as a reduction to our effective tax rate in the year of resolution. Unfavorable resolution of any particular issue could increase the effective tax rate and may require the use of cash in the year of resolution.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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ITEM 1C. CYBERSECURITY
Risk Management and Strategy
Cybersecurity risk management is overseen both as a critical component of our overall Enterprise Risk Management program and as a standalone program. We have implemented a risk-based, multilayered approach to assessing, identifying, and managing cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents.
The team devotes significant resources to our cybersecurity risk management, which focuses on developing and implementing strategies and processes to protect the confidentiality, integrity, and availability of our assets and those of our consumers, customers and employees and seeks to continually improve our policies and practices to protect our platforms, adapt to changes in regulations, identify potential and emerging security risks such as those due to the increased availability of artificial intelligence and develop mitigation strategies for those risks. As part of this effort, the team periodically benchmarks our practices against the NIST Cyber Security and Privacy Frameworks, and other good practice control methods, which include updating technology, developing data privacy and security policies and procedures, implementing and assessing the effectiveness of controls, monitoring and routine testing of our information systems, conducting risk assessments of third-party service providers, providing data privacy and cybersecurity awareness training to employees and designing business processes to protect private data and mitigate the risk of cybersecurity incidents. We periodically conduct tests on our systems to help discover potential vulnerabilities, which enable improved decision-making and prioritization and promote monitoring and reporting across compliance functions. We believe that these actions provide adequate measures of protection against security breaches and generally reduce our cybersecurity risks, and we have not had a material cybersecurity threat or attack to date.
Our processes also address cybersecurity risks associated with our use of third-party service providers including suppliers, and software and cloud-based service providers. We proactively evaluate the cybersecurity risk of our third-party service providers by utilizing a repository of risk assessments, external monitoring sources, threat intelligence and predictive analytics to better inform ourselves during contracting and vendor selection processes. Third-party service providers security issues are documented, tracked, and monitored in order to mitigate risk.
Our employees, including part-time and temporary employees, undertake an annual cybersecurity training program, which is augmented by additional training and communications on information security and data privacy matters throughout the year.
We have adopted an incident response plan that applies in the event of a cybersecurity threat or incident to provide a standardized framework for responding to such cybersecurity threats or incidents. The plan sets out a coordinated approach to investigating, containing, documenting, and mitigating incidents, including reporting findings and keeping our Management Committee, the Audit Committee, the Board, and other key stakeholders informed and involved as appropriate. The plan is aligned to NIST guidance. It also includes the involvement of any personnel who may detect incidents, respond to incidents, resolve incidents, and manage communications and responsibilities with authorities about those incidents. The plan applies to all personnel (including third-party contractors, vendors, and partners) that perform functions or services requiring access to secure Company information, and to all devices and network services that are owned or managed by us.
Further, we currently maintain a cybersecurity insurance that provides coverage for certain types of incidents; however, such insurance may not be sufficient in type or amount to cover claims related to all cyber threats or risks.
While we have not experienced any material cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition, as of the date of this Annual Report on Form 10-K, there can be no guarantee that we will not be the subject of future threats or incidents. Additional information on cybersecurity risks we face can be found in Item 1A, Risk Factors, which should be read in conjunction with the foregoing information.
Governance and Oversight
Our Board and the Audit Committee are actively engaged in the oversight of our cybersecurity and data privacy program. The Board, at least annually, and the Audit Committee, periodically throughout the year, receive regular reports from our Chief Information Security Officer (“CISO”) and members of the information security team on, among other things, recent developments, the state of the information security program, assessments of risks and threats to our information security systems, information security considerations arising with respect to our peers and
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third parties, third-party and independent reviews, and processes to maintain and strengthen information security systems. Under the oversight of the Audit Committee, we engage third-party experts to assess the state of our cybersecurity and data privacy program. The Audit Committee also provides regular updates to the Board, and the Board would be notified between such updates regarding significant new cybersecurity threats or incidents.
We have protocols by which certain cybersecurity incidents that meet established reporting thresholds are escalated internally and, where appropriate, reported to the Management Committee, the Audit Committee or the Board in a timely manner.
We have an Executive Cybersecurity Steering Committee that is facilitated by our CISO, which is designed to engage business leadership and employ best practices, including ongoing enhancements to governance, risk and compliance. We have adopted governance policies and procedures related to artificial intelligence development, deployment and monitoring. Our internal audit function also performs independent testing on aspects of the operations of our cybersecurity program and the supporting controls based upon its risk-based internal audit plan and reports the results of these audits in its periodic reports to the Audit Committee. Our CISO currently reports to our Chief Information and Digital Officer and is responsible for training and leading a dedicated information security team tasked with protecting data and preventing, identifying, and appropriately addressing cybersecurity threats. The CISO is a Certified Information Systems Security Professional with over 20 years of experience developing and maturing information security programs, including experience with leading privacy, enterprise risk, records management, business continuity and operational risk programs, among others.
ITEM 2. PROPERTIES
Our principal executive offices and primary research facilities are leased and owned, respectively, and are located in suburban Baltimore, Maryland.
The following is a list of our principal manufacturing properties, all of which are owned except for the facilities in Commerce, California; Lakewood, New Jersey; Melbourne, Australia; and Florence, Italy, which are leased. The manufacturing facilities that we own in Guangzhou, Shanghai, and Wuhan, China are each located on land subject to long-term leases:
United States:
Hunt Valley, Maryland–Consumer and Flavor Solutions
(3 principal plants)
Gretna, Louisiana–Consumer and Flavor Solutions
South Bend, Indiana–Consumer and Flavor Solutions
Atlanta, Georgia–Flavor Solutions
Commerce, California–Consumer
Irving, Texas–Flavor Solutions
Lakewood, New Jersey–Flavor Solutions
Geneva, Illinois–Flavor Solutions
Springfield, Missouri–Consumer and Flavor Solutions
Belcamp, Maryland–Consumer and Flavor Solutions
Canada:
London, Ontario–Consumer and Flavor Solutions
Mexico:
Cuautitlán de Romero Rubio–Consumer and Flavor Solutions (2 principal plants)
San Luis Potosí–Consumer and Flavor Solutions
United Kingdom:
Haddenham, England–Consumer and Flavor Solutions
Peterborough, England–Flavor Solutions
France:
Carpentras–Consumer and Flavor Solutions
Monteux–Consumer and Flavor Solutions
Poland:
Stefanowo–Consumer
Italy:
Florence–Consumer and Flavor Solutions (2 principal plants)
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China:
Guangzhou–Consumer and Flavor Solutions
Shanghai–Consumer and Flavor Solutions
Wuhan–Consumer and Flavor Solutions
Australia:
Melbourne–Consumer and Flavor Solutions
Palmwoods–Consumer
Thailand:
Chonburi–Consumer and Flavor Solutions
In addition to distribution facilities and warehouse space available at our manufacturing facilities, we lease the following regional distribution facilities: (i) U.S.: Baltimore, Maryland; Salinas, California; Byhalia, Mississippi; Irving, Texas; and Springfield, Missouri; (ii) Canada: Mississauga and London, Ontario; (iii) Heywood, U.K.; and (iv) Compans, France. We also own a distribution facility in Monteux, France. In addition, we own, lease, or contract other properties used for manufacturing Consumer and Flavor Solutions products and for sales, warehousing, distribution, and administrative functions.
We believe our plants are well maintained and suitable for their intended use. We further believe that these plants generally have adequate capacity or the ability to expand, and can accommodate seasonal demands, changing product mixes, and additional growth.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings in which we or any of our subsidiaries are a party or to which any of our or their property is the subject.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
| PART II. | ||
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our Common Stock and Common Stock Non-Voting are listed and traded on the New York Stock Exchange (NYSE). Our Common Stock and Common Stock Non-Voting trade under the ticker symbols MKC.V and MKC, respectively. We have disclosed the information related to the dividends declared and paid on our classes of common stock in Note 16 of the accompanying financial statements. The market price of our common stock at the close of business on December 31, 2025 was $68.01 per share for the Common Stock and $68.11 per share for the Common Stock Non-Voting.
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The approximate number of holders of our common stock based on record ownership as of December 31, 2025 was as follows:
| Title of class | Approximate number of record holders | ||||
| Common Stock, par value $0.01 per share | 1,745 | ||||
| Common Stock Non-Voting, par value $0.01 per share | 7,924 | ||||
The following table summarizes our purchases of Common Stock (CS) and Common Stock Non-Voting (CSNV) during the fourth quarter of 2025:
ISSUER PURCHASES OF EQUITY SECURITIES
| Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may yet be purchased under the plans or programs | ||||||||||
| September 1, 2025 to September 30, 2025 | CS - 19,883 CSNV - 0 | $64.39 - | 19,883 - | $418 million | ||||||||||
| October 1, 2025 to October 31, 2025 | CS - 15,384 CSNV - 0 | $67.12 - | 15,384 - | $417 million | ||||||||||
| November 1, 2025 to November 30, 2025 | CS - 51,912 CSNV - 0 | $64.81 - | 51,912 - | $414 million | ||||||||||
| Total | CS - 87,179 CSNV - 0 | $65.12 - | 87,179 - | $414 million | ||||||||||
On November 11, 2025, various trusts affiliated with Lawrence Kurzius, former McCormick Chairman, President and CEO who retired from our Board as Executive Chairman on March 26, 2025 and current beneficial owner of more than five percent of the CS of the Company, sold 39,014 shares of McCormick CS as a part of McCormick's authorized share repurchase program for $2,517,964. The repurchase price per share was equal to the average of the high and low trading price of the CSNV on the date McCormick agreed to repurchase the shares.
As of November 30, 2025, approximately $414 million remained of a $600 million share repurchase authorization approved by the Board of Directors in November 2019. The timing and amount of any shares repurchased is determined by our management based on its evaluation of market conditions and other factors.
In certain circumstances, we issue shares of CS in exchange for shares of CSNV, or issue shares of CSNV in exchange for shares of CS, in either case pursuant to the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended. Typically, these exchanges are made in connection with the administration of our employee benefit plans, executive compensation programs and dividend reinvestment/direct purchase plans. The number of shares issued in an exchange is generally equal to the number of shares received in the exchange, although the number may differ slightly to the extent necessary to comply with the requirements of the Employee Retirement Income Security Act of 1974. During fiscal 2025, we issued 1,105,409 shares of CSNV in exchange for shares of CS and issued 24,157 shares of CS in exchange for shares of CSNV.
ITEM 6. [RESERVED]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand McCormick & Company, Incorporated, our operations, and our present business environment from the perspective of management. MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes thereto contained in Item 8 of this report. We use certain non-GAAP information—more fully described below under the caption Non-GAAP Financial Measures—that we believe is important for purposes of comparison to prior periods and development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of our ongoing operations and analyze our business performance and trends. The dollar and share information in the charts and tables in MD&A are in millions, except per share data.
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McCormick is a global leader in flavor. We manufacture, market, and distribute spices, seasoning mixes, condiments, and other flavorful products to the entire food and beverage industry–retailers, food manufacturers, and foodservice businesses. We manage our business in two operating segments, Consumer and Flavor Solutions, as described in Item 1 of this report.
Our long-term annual growth objectives in constant currency are to increase sales 4% to 6%, increase adjusted operating income 7% to 9%, and increase adjusted earnings per share 9% to 11%. Our actual annual results can vary from our long-term growth objectives.
Over time, we expect to grow sales with similar contributions from: 1) our base business – driven by brand marketing support, category management, and differentiated customer engagement; 2) new products; and 3) acquisitions.
Base Business – We expect to drive sales growth by optimizing our brand marketing investment through improved speed, quality, and effectiveness. We measure the return on our brand marketing investment and identify digital marketing as one of our highest return investments in brand marketing support. Through digital marketing, we are connecting with consumers in a personalized way to deliver recipes, provide cooking advice, and help them discover new products.
New Products – For our Consumer segment, we believe that scalable and differentiated innovation continues to be one of the best ways to distinguish our brands from our competition, including private label. We are introducing products for every type of cooking occasion, from gourmet, premium items to convenient and value-priced flavors.
For Flavor Solutions customers, we are developing seasonings for snacks and other food products, as well as flavors for new menu items. We have a strong pipeline of Flavor Solutions products aligned with our customers’ new product launch plans, many of which include clean-label, organic, natural, and “better-for-you” innovation. With over 20 product innovation centers around the world, we are supporting the growth of our brands and those of our Flavor Solutions customers with products that appeal to local consumers.
Acquisitions – Acquisitions are expected to approximate one-third of our sales growth over time. We focus on acquisition opportunities that meet the growing demand for flavor and health. Geographically, our focus is on acquisitions that build scale where we currently have presence in both developed and emerging markets.
Recent Event
On January 2, 2026 we acquired an additional 25% ownership interest in McCormick de Mexico for a purchase price of $750 million, which increased our ownership to a 75% controlling interest. We believe the acquisition creates opportunities for further growth in the Mexican market and provides a strategic platform for further expansion in Latin America. McCormick de Mexico is a prominent food company in Mexico, with a broad portfolio, including mayonnaise, spices, marmalades, mustard, hot sauce, and tea, sold under McCormick brands.
Executive Summary
In 2025, we achieved net sales growth of 1.7% as compared to 2024 due to the following factors:
•Volume and product mix favorably impacted net sales growth by 1.2%. The Consumer segment experienced favorable volume and product mix of 2.1% and the Flavor Solutions segment experienced unfavorable volume and product mix of 0.2%.
•Pricing favorably impacted net sales by 0.7%.
•Fluctuations in currency rates negatively impacted net sales by 0.2%, Fluctuations in currency rates positively impacted our Consumer segment sales growth by 0.2% and negatively impacted our Flavor Solutions segment sales growth by 0.6%.
Operating income was $1,070.8 million in 2025, compared to $1,060.3 million in 2024, reflecting an increase of 1.0%. Our gross profit margin decreased by 60 basis points primarily driven by increased commodity costs including the impact of tariffs, unfavorable product mix, and increased conversion costs including costs to support capacity for future growth, partially offset by pricing actions and CCI-led cost savings. Selling, general, and administrative (SG&A) expense as a percentage of sales decreased by 70 basis points, primarily driven by lower performance-based employee compensation expense, lower distribution expense, and CCI-led cost savings including SG&A streamlining initiatives, partially offset by increased brand marketing expense. Excluding special charges, adjusted operating income was $1,094.0 million in 2025, reflecting an increase of 2.3% compared to $1,069.8 million in 2024. In constant currency, adjusted operating income increased 2.8%. For further details and a reconciliation of non-GAAP to reported amounts, see the subsequent discussion under the heading "Non-GAAP Financial Measures".
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Diluted earnings per share was $2.93 in 2025 and $2.92 in 2024, driven by higher operating income and decreased interest expense, partially offset by an increase in the effective tax rate, higher special charges, a decrease in other income, and a decrease in income from unconsolidated operations. Special charges lowered earnings per share by $0.07 and $0.03 in 2025 and 2024, respectively. Excluding the effects of special charges, adjusted diluted earnings per share was $3.00 in 2025, compared to $2.95 in 2024, representing an increase of 1.7%.
Net cash provided by operating activities was $962.2 million, $921.9 million, and $1,237.3 million in 2025, 2024, and 2023, respectively. In 2025, we continued to have a balanced use of cash for debt repayment, capital expenditures, and the return of cash to shareholders through dividends and share repurchases. We are using our cash to fund shareholder dividends, with annual increases in each of the past 40 years, and to fund capital expenditures and acquisitions. In 2025, the return of cash to our shareholders through dividends and share repurchases was $517.8 million.
A detailed review of our fiscal 2025 performance compared to fiscal 2024 appears in the section titled “Results of Operations – 2025 Compared to 2024.” A detailed review of our fiscal 2024 performance compared to our fiscal 2023 performance is set forth in Part II, Item 7 of our Form 10-K for the fiscal year ended November 30, 2024 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – 2024 Compared to 2023,” which is incorporated herein by reference.
2026 Outlook
Our fiscal 2026 outlook continues to reflect prioritized investments in key categories to sustain our volume trends and drive long-term profitable growth while appreciating the uncertainty of the consumer and macro environment, including global trade policies. Our CCI program is continuing to fuel growth investments while also driving operating margin expansion. Our fiscal 2026 outlook also reflects meaningful contributions from the acquisition of a controlling interest in McCormick de Mexico, which closed on January 2, 2026. Amounts are rounded with percentages calculated from the underlying amounts.
Our outlook for 2026 adjusted operating income and adjusted earnings per share are non-GAAP financial measures that exclude or otherwise adjust for items impacting comparability of financial results. We are unable to reconcile projected adjusted operating income to projected reported operating income because we cannot reasonably predict the amount of special charges, including transaction and integration expenses, during this time period. We expect 2026 transaction and integration expenses to include a step-up in inventory to fair value related to the recent acquisition of an additional 25% ownership interest in McCormick de Mexico. This step-up will be recognized in cost of goods sold as the related inventory is sold.
We are unable to reconcile projected adjusted earnings per share to projected reported earnings per share due to the same factors affecting reported operating income, and because we cannot reasonably predict the amount of the anticipated non-cash gain from remeasuring the previously held equity interest in McCormick de Mexico to fair value.
In 2026, we expect net sales to grow between 13% and 17% compared to 2025, including an 11% to 13% increase as a result of the acquisition of a controlling interest in McCormick de Mexico and a 1% favorable impact from foreign currency rates, or to grow from 1% to 3% on an organic basis. We anticipate that net sales will benefit from favorable volume and product mix and pricing.
In 2026, we expect an increase in adjusted operating income of 16% to 20% compared to 2025, including a 1% favorable impact from foreign currency rates, or to increase by 15% to 19% on a constant currency basis. This anticipated increase in adjusted operating income reflects recovery of adjusted gross margin, accretion from the acquisition of the controlling interest in McCormick de Mexico and cost savings from our CCI program, partially offset by increased commodity costs and an increase in SG&A expense, including performance-based employee compensation expenses and investments aimed at driving volume growth, particularly in brand marketing. We project our brand marketing investments in 2026 to rise by low to mid-teens digits, including the impact from the acquisition of the controlling interest in McCormick de Mexico, compared to 2025.
We estimate that our 2026 adjusted effective tax rate, including the net favorable impact of anticipated discrete tax items, although at a lower amount than in 2025, will be 24.0% as compared to 21.5% in 2025.
Excluding the per share impact of special charges, adjusted diluted earnings per share was $3.00 in 2025. Adjusted diluted earnings per share is projected to range from $3.05 to $3.13 in 2026. We expect adjusted diluted earnings
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per share to increase by 2% to 5%, which includes a 1% favorable impact from currency rates, or to increase by 1% to 4% on a constant currency basis.
RESULTS OF OPERATIONS—2025 COMPARED TO 2024
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). Pricing actions favorably impacted sales by 0.7%. Favorable volume and product mix increased sales by 1.2% driven by favorable volume and product mix from our Consumer segment of 2.1% offset by unfavorable volume and product mix from our Flavor Solutions segment of 0.2%. Foreign currency rates decreased sales by 0.2%.
| 2025 | 2024 | |||||||
| Gross profit | $ | 2,592.2 | $ | 2,591.0 | ||||
| Gross profit margin | 37.9 | % | 38.5 | % | ||||
Gross profit for 2025 increased by $1.2 million, which is comparable to 2024. 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. Excluding the impact of special charges related to the step up of acquired inventory included in cost of goods sold, adjusted gross margin was 37.9% for 2025.
| 2025 | 2024 | |||||||
| Selling, general & administrative expense | $ | 1,500.3 | $ | 1,521.2 | ||||
| Percent of net sales | 21.9 | % | 22.6 | % | ||||
SG&A expense decreased by $20.9 million in 2025 as compared to 2024, driven primarily by lower performance-based employee compensation expense, lower distribution expense, and CCI-led cost savings including the impact of SG&A streamlining actions, partially offset by increased brand marketing expense and higher selling and marketing costs. SG&A as a percent of net sales decreased by 70 basis points.
| 2025 | 2024 | |||||||
| Special charges | $ | 21.1 | $ | 9.5 | ||||
We regularly evaluate whether to implement changes to our organization structure to reduce fixed costs, simplify or improve processes, and improve our competitiveness, and we expect to continue to evaluate such actions in the future. From time to time, those changes are of such significance in terms of both up-front costs and organizational/structural impact that we obtain advance approval from our Management Committee and classify expenses related to those changes as special charges in our financial statements.
During 2025, we recorded $21.1 million of special charges, including transaction and integration expenses. Those expenses consisted principally of $15.9 million of employee severance and related benefits associated with our SG&A streamlining actions, $3.3 million associated with other actions and $1.9 million of transaction and integration costs.
During 2024, we recorded $9.5 million of special charges, consisting principally of $4.5 million associated with the Global Operating Effectiveness program and $5.0 million associated with the transition of a manufacturing facility in EMEA.
Details with respect to the composition of special charges, including transaction and integration expenses, are included in the accompanying notes to our financial statements contained in Item 8 of this report.
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| 2025 | 2024 | |||||||
| Interest expense | $ | 196.2 | $ | 209.4 | ||||
| Other income, net | 38.4 | 47.4 | ||||||
Interest expense decreased by $13.2 million in 2025 compared to the prior year, due to a reduction in average borrowing levels and lower interest rates on borrowings.
Other income, net, decreased by $9.0 million compared to the prior year primarily due to a lower level of interest income driven by lower interest rates and lower non-service cost income associated with our pension and postretirement benefit plans.
| 2025 | 2024 | |||||||
| Income from consolidated operations before income taxes | $ | 913.0 | $ | 898.3 | ||||
| Income tax expense | 195.8 | 184.0 | ||||||
| Effective tax rate | 21.4 | % | 20.5 | % | ||||
The effective tax rate for 2025 was 21.4%, compared to 20.5% in 2024, primarily driven by the lower level of net discrete tax benefits recorded for 2025. Specifically, net discrete tax benefits amounted to $27.6 million in 2025, a decrease of $4.1 million from $31.7 million in 2024.
The $27.6 million of net discrete tax benefits for 2025 principally included (i) $10.1 million of tax benefits from the reversal of certain reserves for unrecognized tax benefits and related interest, including $5.9 million associated with the expiration of statutes of limitations, (ii) $7.9 million of tax benefits resulting from state tax matters, and related deferred taxes, (iii) a $5.0 million tax benefit resulting from the revaluation of deferred taxes associated with enacted legislation, (iv) $3.6 million of tax benefits resulting from an adjustment to a prior year tax accrual, and related deferred taxes, based on the final return filed, and (v) $1.1 million of excess tax benefits associated with stock compensation.
The $31.7 million of net discrete tax benefits for 2024 principally included (i) $19.4 million of tax benefits associated with the recognition of a deferred tax asset related to an international legal entity reorganization, (ii) $12.3 million of tax benefit from the reversal of certain reserves for unrecognized tax benefits and related interest associated with both the effective settlement from the conclusion of a tax examination and the expiration of statutes of limitations, (iii) $6.0 million of tax benefits resulting from state tax matters, and related deferred taxes, (iv) $1.8 million of tax benefit from an adjustment to a prior year tax accrual and related deferred taxes based on final returns filed, (v) $6.2 million of tax expense associated with the adjustment of valuation allowances due to changes in judgment about the realizability of deferred tax assets, and (vi) $1.8 million of tax expense related to certain unremitted prior year earnings.
On July 4, 2025, legislation known as the One Big Beautiful Bill Act (OBBBA) was signed into law. The OBBBA makes changes to the United States corporate income tax system, including, among other provisions, the immediate expensing of research and development expenditures, and 100 percent bonus depreciation on qualified property. While we expect certain provisions of the OBBBA to change the timing of cash tax payments related to the current fiscal year and future year periods, we do not expect the legislation to have a material impact on our consolidated financial statements.
See Note 12 of notes to our consolidated financial statements for a more detailed reconciliation of the U.S. federal tax rate with the effective tax rate.
| 2025 | 2024 | |||||||
| Income from unconsolidated operations | $ | 72.2 | $ | 74.2 | ||||
Income from unconsolidated operations, which is presented net of the elimination of earnings attributable to non-controlling interests, decreased $2.0 million in 2025, driven by the results of our largest joint venture, McCormick de Mexico, where unfavorable impacts from foreign exchange rates were partially offset by improved operating results. We own 50% of most of our unconsolidated joint ventures. McCormick de Mexico comprised 93% and 95% of the income of our unconsolidated operations in 2025 and 2024, respectively.
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The following table outlines the major components of the change in diluted earnings per share from 2024 to 2025.
2024 Earnings per share—diluted | $ | 2.92 | |||
| Increase in operating income | 0.07 | ||||
| Increase in special charges, net of taxes | (0.04) | ||||
| Decrease in other income | (0.02) | ||||
| Decrease in income from unconsolidated operations | (0.01) | ||||
| Decrease in interest expense | 0.04 | ||||
| Impact of change in effective income tax rate, excluding taxes on special charges | (0.03) | ||||
2025 Earnings per share—diluted | $ | 2.93 | |||
Results of Operations—Segments
We measure the performance of our business segments based on operating income, excluding special charges. See Note 15 of notes to our consolidated financial statements for additional information on our segment measures as well as for a reconciliation by segment of operating income, excluding special charges. In the following discussion, we refer to our previously described measure of segment profit as "Segment operating income."
Consumer Segment
| 2025 | 2024 | |||||||
| Net sales | $ | 3,950.3 | $ | 3,848.5 | ||||
| Percent growth | 2.6 | % | 1.1 | % | ||||
| Components of percent change in net sales: | ||||||||
| Pricing actions | 0.3 | % | — | % | ||||
| Volume and product mix | 2.1 | % | 0.8 | % | ||||
| Foreign exchange | 0.2 | % | 0.3 | % | ||||
| Segment operating income | $ | 734.9 | $ | 740.3 | ||||
| Segment operating income margin | 18.6 | % | 19.2 | % | ||||
In 2025, sales of our Consumer segment increased by 2.6% as compared to 2024 and increased by 2.4% on an organic basis. Favorable volume and product mix increased sales by 2.1%, driven by growth across all regions. Favorable pricing increased sales by 0.3%. The favorable impact of foreign currency rates increased sales by 0.2% and is excluded from our measure of sales growth of 2.4% on an organic basis.
In the Americas region, Consumer segment sales increased 2.0% in 2025 as compared to 2024 and increased by 2.3% on an organic basis. Unfavorable pricing decreased sales by 0.1%. Favorable volume and product mix increased sales by 2.4% driven by growth across core categories. The unfavorable impact of foreign currency rates decreased sales by 0.3% and is excluded from our measure of sales growth of 2.3% on an organic basis.
In the EMEA region, Consumer segment sales increased 6.0% in 2025 as compared to 2024 and increased by 3.5% on an organic basis. Favorable pricing impacted sales by 2.1%. Favorable volume and product mix increased sales by 1.4% driven by growth in France and Poland. The favorable impact of foreign currency exchange rates increased sales by 2.5% and is excluded from our measure of sales growth of 3.5% on an organic basis.
In the APAC region, Consumer segment sales increased 1.0% in 2025 as compared to 2024 and increased by 1.9% on an organic basis. Favorable pricing impacted sales by 0.2%. Favorable volume and product mix increased sales by 1.7% driven by higher sales to foodservice customers in China. The unfavorable impact from foreign currency rates decreased sales by 0.9% and is excluded from our measure of sales growth of 1.9% on an organic basis.
Segment operating income for our Consumer segment decreased by $5.4 million, or 0.7%, in 2025 as compared to 2024, driven by a decrease in gross profit, partially offset by a decrease in SG&A expense. The decrease in gross profit was driven by unfavorable product mix, increased commodity costs including the impact of tariffs, and increased conversion costs including costs to support increased capacity for future growth, partially offset by higher sales volume, the favorable impact of pricing actions, and CCI-led cost savings. The decrease in SG&A expense was driven by the items described in the consolidated discussion. Segment operating margin decreased by 60 basis points to 18.6%. On a constant currency basis, segment operating income decreased by 0.6%.
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Flavor Solutions Segment
| 2025 | 2024 | |||||||
| Net sales | $ | 2,890.0 | $ | 2,875.2 | ||||
| Percent growth | 0.5 | % | 0.7 | % | ||||
| Components of percent change in net sales: | ||||||||
| Pricing actions | 1.3 | % | 1.2 | % | ||||
| Volume and product mix | (0.2) | % | (0.3) | % | ||||
| Divestiture | — | % | (0.5) | % | ||||
| Foreign exchange | (0.6) | % | 0.3 | % | ||||
| Segment operating income | $ | 359.1 | $ | 329.5 | ||||
| Segment operating income margin | 12.4 | % | 11.5 | % | ||||
Sales of our Flavor Solutions segment increased 0.5% in 2025 as compared to 2024 and increased by 1.1% on an organic basis. Favorable pricing increased sales by 1.3% in 2025 driven by pricing actions in the Americas region. Unfavorable volume and product mix decreased sales by 0.2% driven by the Americas and EMEA regions partially offset by growth in the APAC region. The unfavorable impact of foreign currency rates decreased sales by 0.6% and is excluded from our measure of sales growth of 1.1% on an organic basis.
In the Americas region, Flavor Solutions segment sales increased by 0.5% during 2025 as compared to 2024 and increased by 1.9% on an organic basis. Favorable pricing impacted sales by 2.6%. Unfavorable volume and product mix decreased sales by 0.7%. The unfavorable impact of foreign currency rates decreased sales by 1.4% and is excluded from our measure of sales growth of 1.9% on an organic basis.
In the EMEA region, Flavor Solutions segment sales in 2025 decreased by 2.2% as compared to 2024 and decreased by 4.3% on an organic basis. Unfavorable pricing impacted sales by 2.1%. Unfavorable volume and product mix decreased segment sales by 2.2% driven by the effects of lower sales to packaged food customers. The favorable impact of foreign currency rates increased sales by 2.1% and is excluded from our measure of sales decline of 4.3% on an organic basis.
In the APAC region, Flavor Solutions segment sales increased 6.2% in 2025 as compared to 2024 and increased by 6.7% on an organic basis. Unfavorable pricing impacted sales by 1.9%. Favorable volume and product mix increased sales by 8.6%, driven by growth in China. The unfavorable impact of foreign currency rates decreased sales by 0.5% and is excluded from our measure of sales growth of 6.7% on an organic basis.
Segment operating income for our Flavor Solutions segment increased by $29.6 million, or 9.0%, in 2025 as compared to 2024 driven by an increase in gross profit and lower SG&A expense. The increase in gross profit was driven by the impacts of favorable pricing and CCI-led cost savings, partially offset by increased commodity costs including the impact of tariffs, and conversion costs including costs to support increased capacity for future growth. The decrease in SG&A expense was driven primarily by lower performance-based employee compensation expense, lower distribution expense, and CCI-led cost savings, partially offset by higher selling and marketing costs. Segment operating margin increased by 90 basis points to 12.4%. On a constant currency basis, segment operating income increased by 10.7%.
NON-GAAP FINANCIAL MEASURES
The following tables include financial measures of organic net sales, adjusted gross profit, adjusted gross profit margin, adjusted operating income, adjusted operating income margin, adjusted income tax expense, adjusted income tax rate, adjusted net income, and adjusted diluted earnings per share. These represent non-GAAP financial measures which are prepared as a complement to our financial results prepared in accordance with United States generally accepted accounting principles. These financial measures exclude the impact, as applicable, of the following:
•Special charges – Special charges consist of expenses and income associated with certain actions undertaken by us to reduce fixed costs, simplify or improve processes, and improve our competitiveness and are of such significance in terms of both up-front costs and organizational/structural impact to require advance approval by our Management Committee. Expenses associated with the approved actions are classified as special charges upon recognition and monitored on an ongoing basis through completion. Included in special charges are transaction and integration costs incurred in conjunction with acquisitions.
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Details with respect to the composition of special charges, including transaction and integration expenses, set forth below are included in Note 2 of the notes to our accompanying consolidated financial statements.
We believe that these non-GAAP financial measures are important. The exclusion of the items noted above provides additional information that enables enhanced comparisons to prior periods and, accordingly, facilitates the development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of our ongoing operations and analyze our business performance and trends.
These non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP; however, they should not be viewed as a substitute for, or superior to, GAAP results. Furthermore, these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, as they may calculate them differently than we do. We intend to continue providing these non-GAAP financial measures as part of our future earnings discussions, ensuring consistency in our financial reporting.
A reconciliation of these non-GAAP financial measures to GAAP financial results is provided below:
| 2025 | 2024 | 2023 | |||||||||
| Gross profit | $ | 2,592.2 | $ | 2,591.0 | $ | 2,502.5 | |||||
| Impact of special charges included in cost of goods sold | 2.1 | — | — | ||||||||
| Adjusted gross profit | $ | 2,594.3 | $ | 2,591.0 | $ | 2,502.5 | |||||
Gross profit margin(1) | 37.9 | % | 38.5 | % | 37.6 | % | |||||
Impact of special charges(1) | — | % | — | % | — | % | |||||
Adjusted gross profit margin(1) | 37.9 | % | 38.5 | % | 37.6 | % | |||||
Operating income | $ | 1,070.8 | $ | 1,060.3 | $ | 963.0 | |||||
| Impact of special charges | 23.2 | 9.5 | 61.2 | ||||||||
| Adjusted operating income | $ | 1,094.0 | $ | 1,069.8 | $ | 1,024.2 | |||||
| % increase versus prior year | 2.3 | % | 4.5 | % | 11.6 | % | |||||
Operating income margin(2) | 15.7 | % | 15.8 | % | 14.5 | % | |||||
Impact of special charges(2) | 0.3 | % | 0.1 | % | 0.9 | % | |||||
Adjusted operating income margin(2) | 16.0 | % | 15.9 | % | 15.4 | % | |||||
| Income tax expense | $ | 195.8 | $ | 184.0 | $ | 174.5 | |||||
| Impact of special charges | 5.5 | 2.4 | 14.5 | ||||||||
| Adjusted income tax expense | $ | 201.3 | $ | 186.4 | $ | 189.0 | |||||
Income tax rate(3) | 21.4 | % | 20.5 | % | 21.8 | % | |||||
| Impact of special charges | 0.1 | % | — | % | 0.2 | % | |||||
Adjusted income tax rate(3) | 21.5 | % | 20.5 | % | 22.0 | % | |||||
| Net income | $ | 789.4 | $ | 788.5 | $ | 680.6 | |||||
| Impact of special charges | 17.7 | 7.1 | 46.7 | ||||||||
| Adjusted net income | $ | 807.1 | $ | 795.6 | $ | 727.3 | |||||
| % increase versus prior year | 1.4 | % | 9.4 | % | 6.3 | % | |||||
| Earnings per share—diluted | $ | 2.93 | $ | 2.92 | $ | 2.52 | |||||
| Impact of special charges | 0.07 | 0.03 | 0.18 | ||||||||
| Adjusted earnings per share—diluted | $ | 3.00 | $ | 2.95 | $ | 2.70 | |||||
| % increase versus prior year | 1.7 | % | 9.3 | % | 6.7 | % | |||||
| (1) | Gross margin, impact of special charges, and adjusted gross profit margin are calculated as gross profit, impact of special charges, and adjusted gross profit as a percentage of net sales for each period presented. | ||||||||||
| (2) | Operating income margin, impact of special charges, and adjusted operating income margin are calculated as operating income, impact of special charges, and adjusted operating income as a percentage of net sales for each period presented. | ||||||||||
| (3) | Income tax rate is calculated as income tax expense as a percentage of income from consolidated operations before income taxes. Adjusted income tax rate is calculated as adjusted income tax expense as a percentage of income from consolidated operations before income taxes excluding special charges of $936.2 million, $907.8 million, and $859.9 million for the years ended November 30, 2025, 2024, and 2023, respectively. | ||||||||||
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We are unable to reconcile projected adjusted earnings per share to projected reported earnings per share because our 2026 adjusted earnings per share is a non-GAAP measure that excludes certain elements that will be included in fiscal 2026 GAAP results that cannot be reasonably predicted. Given the recent acquisition date of an additional 25% ownership in McCormick de Mexico on January 2, 2026, we cannot reasonably predict the amount of special charges, including transaction and integration expenses, or the expected non-cash gain associated with remeasuring our previously held equity interest in McCormick de Mexico to fair value.
Because we are a multi-national company, we are subject to variability of our reported U.S. dollar results due to changes in foreign currency exchange rates. Those changes can be volatile. The exclusion of the effects of foreign currency exchange, or what we refer to as amounts expressed “on a constant currency basis,” is a non-GAAP measure. We believe that this non-GAAP measure provides additional information that enables enhanced comparison to prior periods excluding the translation effects of changes in rates of foreign currency exchange and provides additional insight into the underlying performance of our operations located outside the U.S. It should be noted that our presentation herein of amounts and percentage changes on a constant currency basis does not exclude the impact of foreign currency transaction gains and losses (that is, the impact of transactions denominated in other than the local currency of any of our subsidiaries in their local currency reported results).
We provide organic net sales growth rates for our consolidated net sales and segment net sales. We believe that organic net sales growth rates provide useful information to investors because they provide transparency to underlying performance in our net sales by excluding the effect that foreign currency exchange rate fluctuations, acquisitions, and divestitures, as applicable, have on year-to-year comparability. A reconciliation of these measures from reported net sales growth rates, the relevant GAAP measures, are included in the tables set forth below.
Percentage changes in organic sales and adjusted operating income expressed on a constant currency basis are presented excluding the impact of foreign currency exchange. To present this information for historical periods, current year results for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the prior fiscal year, rather than at the actual average exchange rates in effect during the current fiscal year. As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in the average foreign currency exchange rate between the current year and the prior fiscal year.
Rates of constant currency and organic growth (decline) follow:
For the year ended November 30, 2025 | |||||||||||
| Percentage change as reported | Impact of foreign currency exchange | Percentage change on both a constant currency and organic basis | |||||||||
| Net sales: | |||||||||||
| Consumer segment: | |||||||||||
| Americas | 2.0 | % | (0.3) | % | 2.3 | % | |||||
| EMEA | 6.0 | % | 2.5 | % | 3.5 | % | |||||
| APAC | 1.0 | % | (0.9) | % | 1.9 | % | |||||
| Total Consumer | 2.6 | % | 0.2 | % | 2.4 | % | |||||
| Flavor Solutions segment: | |||||||||||
| Americas | 0.5 | % | (1.4) | % | 1.9 | % | |||||
| EMEA | (2.2) | % | 2.1 | % | (4.3) | % | |||||
| APAC | 6.2 | % | (0.5) | % | 6.7 | % | |||||
| Total Flavor Solutions | 0.5 | % | (0.6) | % | 1.1 | % | |||||
| Total net sales | 1.7 | % | (0.2) | % | 1.9 | % | |||||
For the year ended November 30, 2025 | |||||||||||
| Percentage change as reported | Impact of foreign currency exchange | Percentage change on constant currency basis | |||||||||
| Adjusted operating income: | |||||||||||
| Consumer segment | (0.7) | % | (0.1) | % | (0.6) | % | |||||
| Flavor Solutions segment | 9.0 | % | (1.7) | % | 10.7 | % | |||||
| Total adjusted operating income | 2.3 | % | (0.5) | % | 2.8 | % | |||||
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For the year ended November 30, 2024 | |||||||||||||||||
| Percentage change as reported | Impact of foreign currency exchange | Percentage change on constant currency basis | Impact of Acquisitions & Divestitures | Percentage change on organic basis | |||||||||||||
| Net sales: | |||||||||||||||||
| Consumer segment: | |||||||||||||||||
| Americas | 0.6 | % | (0.1) | % | 0.7 | % | — | % | 0.7 | % | |||||||
| EMEA | 7.3 | % | 3.0 | % | 4.3 | % | — | % | 4.3 | % | |||||||
| APAC | (5.1) | % | (1.0) | % | (4.1) | % | — | % | (4.1) | % | |||||||
| Total Consumer | 1.1 | % | 0.3 | % | 0.8 | % | — | % | 0.8 | % | |||||||
| Flavor Solutions segment: | |||||||||||||||||
| Americas | 1.4 | % | (0.1) | % | 1.5 | % | — | % | 1.5 | % | |||||||
| EMEA | (3.5) | % | 2.4 | % | (5.9) | % | (2.3) | % | (3.6) | % | |||||||
| APAC | 4.1 | % | (1.0) | % | 5.1 | % | — | % | 5.1 | % | |||||||
| Total Flavor Solutions | 0.7 | % | 0.3 | % | 0.4 | % | (0.5) | % | 0.9 | % | |||||||
| Total net sales | 0.9 | % | 0.3 | % | 0.6 | % | (0.2) | % | 0.8 | % | |||||||
For the year ended November 30, 2024 | |||||||||||
| Percentage change as reported | Impact of foreign currency exchange | Percentage change on constant currency basis | |||||||||
| Adjusted operating income: | |||||||||||
| Consumer segment | 0.7 | % | — | % | 0.7 | % | |||||
| Flavor Solutions segment | 14.1 | % | (0.4) | % | 14.5 | % | |||||
| Total adjusted operating income | 4.5 | % | (0.1) | % | 4.6 | % | |||||
To present the percentage change in projected 2026 net sales, adjusted operating income, and adjusted earnings per share (diluted) on a constant currency basis, the projected local currency net sales, adjusted operating income, and adjusted net income for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at forecasted exchange rates. These figures are then compared to the 2026 local currency projected results, which are translated into U.S. dollars at the average actual exchange rates in effect during the corresponding months of fiscal year 2025. This comparison determines what the 2026 consolidated U.S. dollar net sales, adjusted operating income, and adjusted earnings per share (diluted) would have been if the relevant currency exchange rates had not changed from those of the comparable 2025 periods.
| Projections for the Year Ending November 30, 2026 | |||||||||||||||||
| Percentage change in net sales | 13% to 17% | ||||||||||||||||
| Impact of favorable foreign currency exchange | 1 | % | |||||||||||||||
| Percentage change in net sales in constant currency | 12% to 16% | ||||||||||||||||
| Impact of acquisition | 11% to 13% | ||||||||||||||||
| Percentage change in organic net sales | 1% to 3% | ||||||||||||||||
| Percentage change in adjusted operating income | 16% to 20% | ||||||||||||||||
| Impact of favorable foreign currency exchange | 1 | % | |||||||||||||||
| Percentage change in adjusted operating income in constant currency | 15% to 19% | ||||||||||||||||
| Percentage change in adjusted earnings per share - diluted | 2% to 5% | ||||||||||||||||
| Impact of favorable foreign currency exchange | 1 | % | |||||||||||||||
| Percentage change in adjusted earnings per share - diluted | 1% to 4% | ||||||||||||||||
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LIQUIDITY AND FINANCIAL CONDITION
| 2025 | 2024 | 2023 | |||||||||
| Net cash flow provided by operating activities | $ | 962.2 | $ | 921.9 | $ | 1,237.3 | |||||
| Net cash flow used in investing activities | (255.2) | (269.0) | (260.5) | ||||||||
| Net cash flow used in financing activities | (840.9) | (583.1) | (1,184.2) | ||||||||
The primary objective of our financing strategy is to maintain a prudent capital structure that provides the flexibility to pursue our growth objectives. We use a combination of equity and short- and long-term debt. We use short-term debt, primarily in the form of commercial paper, principally to finance ongoing operations, including our requirements for working capital (accounts receivable, prepaid expenses and other current assets, and inventories, less accounts payable, accrued payroll, and other accrued liabilities). We are committed to maintaining investment grade credit ratings.
Our cash flow from operations enables us to fund operating projects and investments that are designed to meet our growth objectives, service our debt, fund or increase our quarterly dividends, fund capital projects and other investments, and make share repurchases, when appropriate. Due to the cyclical nature of a portion of our business, our cash flow from operations has historically been the strongest during the fourth quarter of our fiscal year. Due to the timing of the interest payments on our debt, interest payments are higher in the first and third quarters of our fiscal year.
We believe that our sources of liquidity, which include existing cash balances, cash flows from operations, existing credit facilities, our commercial paper program, and access to capital markets, will provide sufficient liquidity to meet our debt obligations, including any repayment or refinancing of debt, working capital needs, planned capital expenditures, the payment associated with an acquisition and payment of anticipated quarterly dividends for at least the next twelve months.
In the consolidated cash flow statement, the changes in operating assets and liabilities are presented excluding the translation effects of changes in foreign currency exchange rates, as these do not reflect actual cash flows. In addition, in the cash flow statement, the changes in operating assets and liabilities are presented excluding the effect of acquired or disposed operating assets and liabilities, as the cash flow associated with acquisition or disposition of businesses is presented as an investing activity. Accordingly, the amounts in the cash flow statement do not agree with changes in the operating assets and liabilities that are presented in the balance sheet.
The reported values of our assets and liabilities held in non-U.S. subsidiaries and affiliates can be significantly affected by fluctuations in foreign exchange rates between periods. As of November 30, 2025, the exchange rates for the Euro, British pound sterling, Canadian dollar, Mexican peso, Chinese renminbi, Polish zloty, and Australian dollar were higher against the U.S. dollar than on November 30, 2024.
Operating Cash Flow – Operating cash flow was $962.2 million in 2025, $921.9 million in 2024, and $1,237.3 million in 2023. Net income as well as our working capital management, as more fully described below, impacted operating cash flow. In 2025, working capital was impacted by a decreased use of cash associated with inventory offset by a lower source of cash associated with accounts payable. In 2024, the decrease in operating cash flow was primarily driven by higher cash used for working capital, including higher inventory levels and higher employee incentive payments related to the prior year, and the timing of income tax payments partially offset by higher net income. In 2023, the increase was primarily driven by an improvement in cash provided by working capital, which was driven by the lower inventory levels and the lower amount of employee incentive payments associated with the prior year, as well as an increase in dividends received from unconsolidated affiliates. This was partially offset by an increased use of cash associated with accounts payable which partially resulted from our lower level of inventory.
Our working capital management – principally related to inventory, trade accounts receivable, and accounts payable – impacts our operating cash flow. The change in inventory was a moderate source of cash from operations in 2025, a significant use of cash in 2024, and a significant source of cash from operations in 2023. The change in trade accounts receivable was a moderate use of cash in 2025 and 2024, and a source of cash in 2023. The change in accounts payable was a source of cash in 2025, significant source of cash in 2024, and a use of cash in 2023.
In addition to operating cash flow, we also use a cash conversion cycle (CCC) to measure our working capital management. This metric is different than operating cash flow in that it uses average balances instead of specific point in time measures. CCC is a calculation of the number of days, on average, that it takes us to convert a cash outlay for resources, such as raw materials, to a cash inflow from collection of accounts receivable. Our goal is to lower our CCC over time. We calculate CCC as follows:
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Days sales outstanding (average trade accounts receivable divided by average daily net sales) plus days in inventory (average inventory divided by average daily cost of goods sold) less days payable outstanding (average trade accounts payable divided by average daily cost of goods sold plus the average daily change in inventory).
The following table outlines our cash conversion cycle (in days) over the last three years:
| 2025 | 2024 | 2023 | |||||||||
| Cash Conversion Cycle | 42 | 36 | 40 | ||||||||
The increase in CCC in 2025 from 2024 was primarily due to an increase in our days in inventory as a result of inventory management including the impacts of strategic forward purchases and inventory acquired in conjunction with the Jurado acquisition. The decrease in CCC in 2024 from 2023 was primarily due to a reduction in our days in inventory as a result of inventory management based on demand planning.
As more fully described in Note 1 of notes to our consolidated financial statements, we participate in a Supply Chain Financing program (SCF) with several global financial institutions (SCF Banks). Under the SCF, qualifying suppliers may elect to sell their receivables from us to an SCF Bank, enabling participating suppliers to negotiate their receivables sales arrangements directly with the respective SCF Bank. We are not party to those agreements and have no economic interest in a supplier’s decision to sell a receivable. All outstanding amounts related to suppliers participating in the SCF are recorded within the line item 'Trade accounts payable' in our consolidated balance sheets, and the associated payments are included in operating activities in our consolidated cash flow statement. As of November 30, 2025, 2024, and 2023 the amounts due to suppliers participating in the SCF and included in trade accounts payable were approximately $332.1 million, $417.4 million, and $300.5 million, respectively.
The terms of our payment obligations are not impacted by a supplier's participation in the SCF. Our payment terms with our suppliers for similar materials within individual markets are consistent between those suppliers that elect to participate in the SCF and those suppliers that do not participate. Accordingly, our average days outstanding are not significantly impacted by the portion of suppliers included in the SCF. Future changes in our suppliers’ financing policies or economic developments, such as shifts in interest rates, general market liquidity, or our creditworthiness relative to participating suppliers, could affect those suppliers’ participation in the SCF and/or our ability to negotiate extended payment terms with them. However, any such impacts are difficult to predict.
Investing Cash Flow – Net cash used in investing activities was $255.2 million in 2025, $269.0 million in 2024, and $260.5 million in 2023. Our primary investing cash flows include cash used for capital expenditures as well as cash used in the acquisition of a business. Capital expenditures, including expenditures for capitalized software, were $221.8 million in 2025, $274.9 million in 2024, and $263.9 million in 2023. Cash used for the acquisition of a business was $34.1 million in 2025. We expect 2026 capital expenditures to approximate $275 million.
Financing Cash Flow – Net cash associated with financing activities was a use of cash of $840.9 million in 2025, $583.1 million in 2024, and $1,184.2 million in 2023. The variability between years is principally a result of changes in our net borrowings, share repurchase activity, and dividends, all as described below.
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.
In 2024, we repaid $801.1 million of long-term debt, including the $700.0 million, 3.15% notes that matured in August 2024 as well as $55.0 million, 7.63% to 8.12% notes that matured in August and October 2024. We also issued $500.0 million of 4.70% notes due 2034, with net cash proceeds received of $495.5 million.
In 2023, we repaid $268.1 million of long-term debt, including the $250.0 million, 3.50% notes that matured on September 1, 2023. We also issued $500.0 million of 4.95% notes due 2033, with net cash proceeds received of $496.4 million.
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The following table outlines the activity in our share repurchase program:
| 2025 | 2024 | 2023 | |||||||||
| Number of shares of common stock | 0.5 | 0.7 | 0.5 | ||||||||
| Dollar amount | $ | 34.8 | $ | 53.1 | $ | 35.7 | |||||
As of November 30, 2025, $414 million remained of a $600 million share repurchase program that was authorized by our Board of Directors in November 2019. The timing and amount of any shares repurchased is determined by our management based on its evaluation of market conditions and other factors.
During 2025, 2024, and 2023, we received proceeds from exercised stock options of $20.9 million, $17.5 million, and $16.6 million, respectively. We repurchased $13.2 million, $9.0 million, and $10.8 million of common stock during 2025, 2024, and 2023, respectively, in conjunction with employee tax withholding requirements associated with our stock compensation plans.
Our dividend history over the past three years is as follows:
| 2025 | 2024 | 2023 | |||||||||
| Total dividends paid | $ | 483.0 | $ | 451.0 | $ | 418.5 | |||||
| Dividends paid per share | 1.80 | 1.68 | 1.56 | ||||||||
| Percentage increase per share | 7.1 | % | 7.7 | % | 5.4 | % | |||||
In November 2025, the Board of Directors approved a 6.7% increase in the quarterly dividend from $0.45 to $0.48 per share.
Most of our cash is in our subsidiaries outside of the U.S. We manage our worldwide cash requirements by considering available funds among our subsidiaries through which we conduct our business and the cost effectiveness with which those funds can be accessed. Those balances are generally available without legal restrictions to fund ordinary business operations, capital projects, and future acquisitions. As of November 30, 2025, we have $1.7 billion of earnings from our non-U.S. subsidiaries and joint ventures that are considered indefinitely reinvested. We have not provided any deferred taxes with respect to items such as foreign withholding taxes, other income taxes, or foreign exchange gains or losses with respect to these earnings. It is not practicable for us to determine the amount of unrecognized tax expense on these reinvested international earnings.
At November 30, 2025 and 2024, we temporarily used $592.5 million and $509.2 million, respectively, of cash from our non-U.S. subsidiaries to pay down short-term debt in the U.S. During the year, our short-term borrowings vary, but are lower at the end of a year or quarter. The average short-term borrowings outstanding for the years ended November 30, 2025, 2024, and 2023 were $1,089.7 million, $1,043.1 million, and $1,121.9 million, respectively. Those average short-term borrowings outstanding for the years ended November 30, 2025, 2024, and 2023 included average commercial paper borrowings of $1,087.2 million, $1,033.8 million, and $1,098.4 respectively. The total average debt outstanding for the years ended November 30, 2025, 2024, and 2023 was $4,878.6 million, $4,966.4 million, and $5,197.8 million, respectively.
Credit and Capital Markets – The following summarizes the more significant impacts of credit and capital markets on our business:
CREDIT FACILITIES – Cash flows from operating activities are our primary source of liquidity for funding growth, share repurchases, dividends, and capital expenditures. We also rely on our revolving credit facilities, or borrowings backed by these facilities, to fund working capital needs and other general corporate requirements.
Our committed revolving credit facilities include a five-year $2.0 billion revolving credit facility, which will expire in May 2030. The current pricing for the five-year credit facility, on a fully drawn basis, is Term SOFR plus 1.125%. The pricing of that credit facility is based on a credit rating grid that contains a fully drawn maximum pricing of the credit facility equal to Term SOFR plus 1.50%. Also, in January 2026, we entered into a 364-day $500 million revolving credit facility, which will expire in January 2027. The current pricing for the 364-day credit facility, on a fully drawn basis, is Term SOFR plus 1.125%. The pricing of the credit facility is based on a credit rating grid that contains a fully drawn maximum pricing of the credit facility equal to Term SOFR plus 1.50%.
The provisions of our revolving credit facilities restrict subsidiary indebtedness and require us to maintain a minimum interest coverage ratio. We do not expect that this covenant would limit our access to our revolving credit facilities for the foreseeable future. The terms of those revolving credit facilities are more fully described in Note 5 of the notes to the consolidated financial statements.
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We generally use our revolving credit facilities to support our issuance of commercial paper. If the commercial paper market is not available or viable, we could borrow directly under our revolving credit facilities. These facilities are made available by a syndicate of banks, with various commitments per bank. If any of the banks in these syndicates are unable to perform on their commitments, our liquidity could be impacted, which could reduce our ability to grow through funding of seasonal working capital. We engage in regular communication with all banks participating in our credit facilities. During these communications, none of the banks have indicated that they may be unable to perform on their commitments. In addition, we periodically review our banking and financing relationships, considering the stability of the institutions and other aspects of the relationships. Based on these communications and our monitoring activities, we believe our banks will perform on their commitments. In addition to our committed revolving credit facilities, we have uncommitted facilities of $346.9 million as of November 30, 2025 that can be withdrawn based upon the lenders' discretion. See Note 5 of notes to our consolidated financial statements for more details on our financing arrangements.
We will continue to have cash requirements to support seasonal working capital needs and capital expenditures, to pay interest, to service debt, and to fund acquisitions. As part of our ongoing operations, we enter into contractual arrangements that obligate us to make future cash payments. Our primary obligations include principal and interest payments on our outstanding short-term borrowings and long-term debt. In the next year, our most significant debt service obligation is the maturity of our $500.0 million, 0.90% notes due in February 2026. Detail on these contractual obligations follows:
MATERIAL CASH REQUIREMENTS
The following table reflects a summary of our future material cash requirements as of November 30, 2025:
| Total | Less than 1 year | 1–3 years | 3–5 years | More than 5 years | |||||||||||||
| Short-term borrowings | $ | 381.4 | $ | 381.4 | $ | — | $ | — | $ | — | |||||||
| Long-term debt, including finance leases | 3,654.7 | 509.1 | 770.2 | 532.3 | 1,843.1 | ||||||||||||
Interest payments(a) | 834.7 | 110.4 | 190.7 | 224.4 | 309.2 | ||||||||||||
| Total contractual cash obligations | $ | 4,870.8 | $ | 1,000.9 | $ | 960.9 | $ | 756.7 | $ | 2,152.3 | |||||||
(a)Interest payments include expected interest payments on long-term debt. Our short-term borrowings, principally consisting of commercial paper, have short-term maturities. See Note 5 of notes to our consolidated financial statements for additional information.
Our other cash requirements at November 30, 2025, include raw material purchases, lease payments, income taxes, and pension and postretirement benefits. We acquire various raw materials to satisfy our obligations to our customers, and these outstanding purchase obligations can fluctuate throughout the year based on our response to varying raw material cycles; however, these commitments generally do not extend past one year. In addition, we also have a series of commercial commitments, largely consisting of standby letters of credit. Our standby letters of credit, leases, and pension and other post-retirement obligations are more fully described in Notes 5, 6, and 10, respectively, of notes to our consolidated financial statements.
On January 2, 2026, we acquired an additional 25% ownership interest in McCormick de Mexico from Grupo Herdez, for $750 million which increased our ownership interest to a 75% controlling interest. The purchase of the additional 25% ownership interest was funded through a combination of cash on hand and commercial paper.
These obligations impact our liquidity and capital resource needs. To meet those cash requirements, we intend to use our existing cash, cash equivalents and internally generated funds, to borrow under our existing credit facilities or under other short-term borrowing facilities, and depending on market conditions and upon the significance of the cost of a particular debt maturity or acquisition to our then-available sources of funds, to obtain additional short- and long-term financing. We believe that cash provided from these sources will be adequate to meet our future cash requirements.
PENSION ASSETS AND OTHER INVESTMENTS – We hold investments in equity and debt securities in both our qualified defined benefit pension plans and through a rabbi trust for our nonqualified defined benefit pension plan. Cash contributions to pension plans, including unfunded plans, were $9.2 million in 2025, $10.0 million in 2024, and $9.2 million in 2023. It is expected that the 2026 total pension plan contributions will be approximately $13.0 million. Future increases or decreases in pension liabilities and required cash contributions are highly dependent upon changes in interest rates and the actual return on plan assets. We base our investment of plan assets, in part, on the duration of each plan’s liabilities. Across all of our qualified defined benefit pension plans, approximately 16% of assets are invested in equities, 77% in fixed income investments and 7% in other investments. Assets associated
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with our nonqualified defined benefit pension plan are primarily invested in corporate-owned life insurance, the value of which approximates an investment mix of 40% in equities and 60% in fixed income investments. See Note 10 of notes to our consolidated financial statements, which provides details on our pension funding.
CUSTOMERS AND COUNTERPARTIES – See the subsequent section of this discussion under the heading "Market Risk Sensitivity–Credit Risk."
PERFORMANCE GRAPH — SHAREHOLDER RETURN
The following line graph compares the yearly change in McCormick’s cumulative total shareholder return (stock price appreciation plus reinvestment of dividends) on McCormick’s Non-Voting Common Stock with (1) the cumulative total return of the Standard & Poor’s 500 Stock Price Index, assuming reinvestment of dividends, and (2) the cumulative total return of the Standard & Poor’s Packaged Foods & Meats Index, assuming reinvestment of dividends.
MARKET RISK SENSITIVITY
We utilize derivative financial instruments to enhance our ability to manage risk, including foreign exchange and interest rate exposures, which exist as part of our ongoing business operations. We do not enter into contracts for trading purposes, nor are we a party to any leveraged derivative instrument. The use of derivative financial instruments is monitored through regular communication with senior management and the utilization of written guidelines. The information presented below should be read in conjunction with Notes 5 and 7 of notes to our consolidated financial statements.
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Foreign Exchange Risk – We are exposed to fluctuations in foreign currency in the following main areas: cash flows related to raw material purchases; the translation of foreign currency earnings to U.S. dollars; the effects of foreign currency on loans between subsidiaries and unconsolidated affiliates; and cash flows related to repatriation of earnings from unconsolidated affiliates. Primary exposures include the U.S. dollar versus the Euro, British pound sterling, Chinese renminbi, Canadian dollar, Australian dollar, Polish zloty, Singapore dollar, Swiss franc, and Mexican peso, as well as the Euro versus the British pound sterling, Australian dollar, and Polish zloty, and finally the Canadian dollar versus the British pound sterling. We routinely enter into foreign currency exchange contracts to manage certain of these foreign currency risks.
During 2025, the foreign currency translation component in other comprehensive income was principally related to the impact of exchange rate fluctuations on our net investments in our subsidiaries with a functional currency of the Mexican peso, Euro, British pound sterling, Swiss franc, Polish zloty, and Chinese renminbi.
We also utilize cross currency interest rate swap contracts, which are designated as net investment hedges, to manage the impact of exchange rate fluctuations on our net investments in subsidiaries with a functional currency of the British pound sterling and Euro. Gains and losses on these instruments are included in foreign currency translation adjustments in accumulated other comprehensive income (loss).
The following table summarizes the foreign currency exchange contracts held at November 30, 2025. All contracts are valued in U.S. dollars using year-end 2025 exchange rates and have been designated as hedges of foreign currency transactional exposures, firm commitments, or anticipated transactions.
FOREIGN CURRENCY EXCHANGE CONTRACTS AT November 30, 2025
| Currency sold | Currency received | Notional value | Average contractual exchange rate | Fair value | ||||||||||
| British pound sterling | U.S. dollar | $ | 258.5 | 1.34 | $ | 2.3 | ||||||||
| Canadian dollar | U.S. dollar | 53.2 | 1.36 | 1.1 | ||||||||||
| Euro | U.S. dollar | 41.2 | 1.18 | 0.5 | ||||||||||
| Polish zloty | U.S. dollar | 8.4 | 3.69 | (0.1) | ||||||||||
| U.S. dollar | Australian dollar | 81.5 | 0.65 | 1.1 | ||||||||||
| Swiss franc | U.S. dollar | 82.3 | 0.79 | (0.3) | ||||||||||
| U.S. dollar | British pound sterling | 45.0 | 1.31 | 0.4 | ||||||||||
| U.S. dollar | Euro | 129.9 | 1.15 | 0.5 | ||||||||||
| U.S. dollar | Chinese renminbi | 289.4 | 7.04 | 0.6 | ||||||||||
| Polish zloty | Euro | 11.4 | 4.34 | (0.2) | ||||||||||
| British pound sterling | Euro | 5.8 | 0.88 | — | ||||||||||
We had a number of smaller contracts at November 30, 2025 with an aggregate notional value of $11.6 million to purchase or sell other currencies. The aggregate fair value of these contracts was $(0.1) million at November 30, 2025.
At November 30, 2024, we had foreign currency exchange contracts with an aggregate notional value of $1,034.2 million to purchase or sell other currencies. The aggregate fair value of these contracts was $(7.3) million at November 30, 2024.
We also utilized cross currency interest rate swap contracts that are considered net investment hedges.
As of November 30, 2025 and 2024, we had cross currency interest rate swap contracts of (i) $250 million notional value to receive $250 million at USD Secured Overnight Financing Rate (SOFR) plus 0.907% and pay £194.1 million at three-month GBP SONIA plus 0.859% and (ii) £194.1 million notional value to receive £194.1 million at three-month GBP SONIA plus 0.859% and pay €221.8 million at three-month Euro EURIBOR plus 0.808%. These cross-currency interest rate swap contracts expire in August 2027.
As of November 30, 2025 and 2024, we also had cross currency interest rate swap contracts of (i) $250 million notional value to receive $250 million at USD SOFR plus 0.684% and pay £184.1 million at GBP SONIA plus 0.574% and (ii) £184.1 million notional value to receive £184.1 million at GBP SONIA plus 0.574% and pay €219.2 million at Euro ESTR plus 0.667%. These contracts expire in April 2030.
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Interest Rate Risk – Our policy is to manage interest rate risk by entering into both fixed and variable rate debt arrangements. We are exposed to interest rate volatility, with primary exposures related to movements in U.S. Treasury rates, Secured Overnight Financing Rate (SOFR), and commercial paper rates.
We also use interest rate swaps to minimize financing costs and to achieve a desired mix of fixed and variable rate debt. As of November 30, 2025 and 2024, we had interest rate swap contracts of $500 million and $600 million notional value outstanding, respectively, to receive fixed rate interest and pay variable rate interest. The table that follows provides principal cash flows and related interest rates, excluding the effect of interest rate swaps and the amortization of any discounts or fees, by fiscal year of maturity at November 30, 2025. For foreign currency-denominated debt, the information is presented in U.S. dollar equivalents. Variable interest rates are based on the weighted-average rates of the portfolio at the end of the year presented.
YEARS OF MATURITY AT November 30, 2025
| 2026 | 2027 | 2028 | 2029 | Thereafter | Total | Fair value | |||||||||||||||||
| Debt | |||||||||||||||||||||||
| Fixed rate | $ | 538.7 | $ | 759.8 | $ | 10.4 | $ | 20.7 | $ | 2,354.7 | $ | 3,684.3 | $ | 3,535.5 | |||||||||
| Average interest rate | 1.09 | % | 3.40 | % | 3.45 | % | 1.82 | % | 3.59 | % | |||||||||||||
| Variable rate | $ | 351.8 | $ | — | $ | — | $ | — | $ | — | $ | 351.8 | $ | 351.8 | |||||||||
| Average interest rate | 4.06 | % | — | — | — | — | |||||||||||||||||
The table above displays the debt, including finance leases, by the terms of the original debt instrument without consideration of fair value, interest rate swaps, and any loan discounts or origination fees. Interest rate swaps have the following effects:
•We issued $750 million of 3.40% notes due in 2027 in August 2017. Forward treasury lock agreements settled upon issuance of these notes effectively set the interest rate on these $750 million notes at a weighted-average fixed rate of 3.44%. Separately, the fixed interest rate on $250 million of the 3.40% notes due in August 2027 was effectively converted to a variable rate by interest rate swaps through the notes maturity in 2027. Net interest payments are based on USD SOFR plus 0.907% with an effective variable rate of 4.98% as of November 30, 2025.
•We issued $500 million of 2.50% notes due April 15, 2030. Forward treasury lock agreements settled upon issuance of these notes effectively set the interest rate on these $500 million notes at a weighted-average fixed rate of 2.62%. Separately, the fixed interest rate on $250 million of the 2.50% notes due in April 2030 was effectively converted to a variable rate by interest rate swaps through the notes maturity in 2030. Net interest payments are based on USD SOFR plus 0.684% with an effective variable rate of 4.53% as of November 30, 2025.
•We issued $500 million of 4.95% notes due April 15, 2033. Forward treasury lock agreements settled upon issuance of these notes effectively set the interest rate on these $500 million notes at a weighted-average fixed rate of 5.00%.
•We issued $500 million of 4.70% notes due October 15, 2034. Forward treasury lock agreements settled upon issuance of these notes effectively set the interest rate on these $500 million notes at a weighted-average fixed rate of 4.68%.
Commodity Risk – We purchase certain raw materials which are subject to price volatility caused by weather, market conditions, growing and harvesting conditions, governmental actions, and other factors beyond our control. In 2025, our most significant raw materials were dairy products, pepper, garlic, onion, capsicums (red peppers and paprika), salt, tomato products, sugar, and soybean oil. While future movements of raw material costs are uncertain, we respond to this volatility in a number of ways, including strategic raw material purchases, purchases of raw material for future delivery, and customer price adjustments. Other than soybean oil hedging transactions used by McCormick de Mexico, we generally have not used derivatives to manage the volatility related to this risk.
Credit Risk – The customers of our Consumer segment are predominantly food retailers and food wholesalers. Consolidations in these industries have created larger customers. In addition, competition has increased with the growth in alternative channels including mass merchandisers, dollar stores, warehouse clubs, discount chains and e-commerce. This has caused some customers to be less profitable and increased our exposure to credit risk. Some of our customers and counterparties are highly leveraged. We continue to closely monitor the credit worthiness of our customers and counterparties. We feel that the allowance for doubtful accounts properly recognizes trade receivables at realizable value. We consider nonperformance credit risk for other financial instruments to be insignificant.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
New accounting pronouncements are issued periodically that affect our current and future operations. See Note 1 of notes to our consolidated financial statements for further details of these impacts.
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CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
In preparing the financial statements, we are required to make estimates and assumptions that have an impact on the assets, liabilities, revenue, and expenses reported. These estimates can also affect supplemental information disclosed by us, including information about contingencies, risk, and financial condition. We believe, given current facts and circumstances, our estimates and assumptions are reasonable, adhere to U.S. GAAP and are consistently applied. Inherent in the nature of an estimate or assumption is the fact that actual results may differ from estimates, and estimates may vary as new facts and circumstances arise. In preparing the financial statements, we make routine estimates and judgments in determining the net realizable value of accounts receivable, inventory, fixed assets and prepaid allowances. Our most critical accounting estimates and assumptions, which are those that have or are reasonably likely to have a material impact on our financial condition or results of operations, are in the following areas:
Customer Contracts
In several of our major geographic markets, the Consumer segment sells our products by entering into annual or multi-year customer arrangements. Known or expected pricing or revenue adjustments, such as trade discounts, rebates, or returns, are estimated at the time of sale. Where applicable, future reimbursements are estimated based on current expectations regarding what was earned through these programs as of the balance sheet date. 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. Estimates that affect revenue, such as trade incentives and product returns, are monitored and adjusted each period until the incentives or product returns are realized. Certain of our customer arrangements are annual arrangements such that the degree of estimates that affects revenue reduces as a year progresses. We do not believe that there will be significant changes to our estimates of customer consideration when any uncertainties are resolved with customers.
Goodwill Impairment
Our reporting units are aligned with our operating segments. Determining the fair value of a reporting unit involves significant judgment and the use of estimates and assumptions, as detailed in Note 1 of our consolidated financial statements. We estimate fair value using a discounted cash flow model, which calculates this value by present valuing the future expected cash flows of our reporting units with a market-based discount rate. As required by the quantitative goodwill impairment test, we then compare the calculated estimated fair value of each reporting unit to its carrying amount, including intangible assets and goodwill. If the carrying amount exceeds the estimated fair value, an impairment charge is recognized.
Our reporting units are aligned with our operating segments. Determining the fair value of a reporting unit involves significant judgment and the use of estimates and assumptions, as detailed in Note 1 of our consolidated financial statements. We estimate fair value using a discounted cash flow model, which calculates this value by present valuing the future expected cash flows of our reporting units with a market-based discount rate. As required by the quantitative goodwill impairment test, we then compare the calculated estimated fair value of each reporting unit to its carrying amount, including intangible assets and goodwill. If the carrying amount exceeds the estimated fair value, an impairment charge is recognized.
As of November 30, 2025, we had $5,301.3 million of goodwill recorded in our balance sheet ($3,645.6 million in the Consumer segment and $1,655.7 million in the Flavor Solutions segment). Our fiscal year 2025 impairment testing indicated that the estimated fair values of our reporting units were significantly in excess of their carrying values. Accordingly, we believe that only significant changes in the cash flow assumptions would result in an impairment of goodwill. However, variances between the actual performance of the businesses and the assumptions that were used in developing the estimates of fair value could result in impairment charges in future periods.
Indefinite-lived Intangible Asset Impairment
Our indefinite-lived intangible assets consist of brand names and trademarks. We estimate fair values through the use of the relief-from-royalty method and then compare those fair values to the related carrying amounts of the indefinite-lived intangible asset. In the event that the fair value of any of the brand names or trademarks are less than their related carrying amounts, a non-cash impairment loss would be recognized in an amount equal to the difference.
The estimation of fair values of our brand names and trademarks requires us to make significant assumptions, including expectations regarding sales and profits of the respective brands and trademarks, related royalty rates, income tax rates, and appropriate discount rates. These discount rates are based, in part, on current interest rates, adjusted for our assessment of reasonable country- and brand-specific risks, considering both past performance and anticipated future performance of the related brand names and trademarks. The assumptions used to assess impairment consider historical trends, macroeconomic conditions, and projections consistent with our operating strategy. Changes in these estimates can have a significant impact on the assessment of fair value which could result in material impairment losses.
As of November 30, 2025, we had $3,048.8 million of brand name assets and trademarks recognized in our consolidated balance sheet, and none of the balances exceeded their estimated fair values at that date. Of the $3,048.8 million in brand name assets and trademarks as of November 30, 2025: (i) $2,320.0 million relates to the
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French’s, Frank’s RedHot, and Cattlemen’s brand names and trademarks which we group for purposes of our impairment analysis; (ii) $380.0 million relates to the Cholula brand names and trademarks associated with the acquisition of Cholula in November 2020; and (iii) $348.8 million represents various other brand name assets and trademarks with individual carrying values ranging from $0.2 million to $106.4 million. The percentage excess of estimated fair value over respective book values for each of our brand names and trademarks exceeded 20% as of our fourth quarter annual impairment assessment except for three brand names that have an aggregate carrying value of $45.0 million.
Income Taxes
We estimate income taxes and file tax returns in each taxing jurisdiction where we operate and are required to do so. At the end of each year, we record an estimate for income taxes in our financial statements. Tax returns are typically filed in the third or fourth quarter of the subsequent year. At that time, we perform a reconciliation of the estimate to the final tax return, which may result in changes to the original estimate. While we believe our tax return positions are appropriately supported, tax authorities may challenge certain positions. We evaluate our uncertain tax positions in accordance with GAAP guidance for uncertainty in income taxes. We recognize a tax benefit when it is more likely than not that the position will be sustained upon examination, based on its technical merits. The tax position is measured at the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. Any change in judgment regarding the expected resolution of uncertain tax positions is recognized in earnings in the quarter of such change. We believe our reserve for uncertain tax positions, including related interest and penalties, is adequate.
As of November 30, 2025, the Company had $14.4 million of unrecognized tax benefits, including interest and penalties, recorded in Other long-term liabilities. The amounts ultimately paid upon resolution of audits could differ materially from those previously included in our income tax expense, potentially impacting our tax provision, net income, and cash flows. We have also recorded valuation allowances to reduce our deferred tax assets to the amount that is more likely than not to be realized. In making this assessment, we have considered future taxable income and tax planning strategies, both of which involve a number of estimates, as more fully described in Note 1 of notes to our consolidated financial statements.
Pension Benefits
Pension plan costs require the use of assumptions regarding discount rates, investment returns, projected salary increases, and mortality rates. We review the actuarial assumptions used in our pension benefit reporting annually and compare them with external benchmarks to ensure they accurately reflect our future pension benefit obligations. While we believe these assumptions are appropriate, changes in various factors—such as actual returns on plan assets versus expected returns, as well as projected future rates of return—can affect the pension expense or income recognized. Specifically, a 1% increase or decrease in the actuarial assumption for the discount rate would impact our 2026 pension benefit expense by approximately $0.1 million. Similarly, a 1% increase or decrease in the expected return on plan assets would affect the 2026 pension expense by approximately $9.4 million.
We will continue to evaluate the appropriateness of the assumptions used in the measurement of our pension benefit obligations. In addition, see Note 10 of notes to our consolidated financial statements for a discussion of these assumptions and the effects on the financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This information is set forth in the “Market Risk Sensitivity” section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Note 7 of our notes to consolidated financial statements.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF MANAGEMENT
We are responsible for the preparation and integrity of the consolidated financial statements appearing in our Annual Report. The consolidated financial statements were prepared in conformity with United States generally accepted accounting principles and include amounts based on our estimates and judgments. All other financial information in this report has been presented on a basis consistent with the information included in the financial statements.
We are also responsible for establishing and maintaining adequate internal control over financial reporting. We maintain a system of internal control that is designed to provide reasonable assurance as to the fair and reliable preparation and presentation of the consolidated financial statements, as well as to safeguard assets from unauthorized use or disposition.
Our control environment is the foundation for our system of internal control over financial reporting and is embodied in our Business Ethics Policy. It sets the tone of our organization and includes factors such as integrity and ethical values. Our internal control over financial reporting is supported by formal policies and procedures which are reviewed, modified and improved as changes occur in business conditions and operations.
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. The independent registered public accounting firm and internal auditors report to the Audit Committee and accordingly have full and free access to the Audit Committee at any time.
We conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). This assessment included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this assessment. Although there are inherent limitations in the effectiveness of any system of internal control over financial reporting, based on our assessment, we have concluded with reasonable assurance that our internal control over financial reporting was effective as of November 30, 2025.
Our internal control over financial reporting as of November 30, 2025 has been audited by Ernst & Young LLP.
| Brendan M. Foley | ||
| Chairman, President & Chief Executive Officer | ||
| Marcos M. Gabriel | ||
Executive Vice President & Chief Financial Officer | ||
| Gregory P. Repas | ||
| Vice President & Controller | ||
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of McCormick & Company, Incorporated
Opinion on Internal Control Over Financial Reporting
We have audited McCormick & Company, Incorporated’s internal control over financial reporting as of November 30, 2025, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, McCormick & Company, Incorporated (the Company) maintained, in all material respects, effective internal control over financial reporting as of November 30, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of November 30, 2025 and 2024, the related consolidated income statements, statements of comprehensive income, cash flow statements and statements of shareholders’ equity for each of the three years in the period ended November 30, 2025, and the related notes and the financial statement schedule listed in the Index at item 15(2) and our report dated January 22, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Baltimore, Maryland
January 22, 2026
42
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of McCormick & Company, Incorporated
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of McCormick & Company, Incorporated (the Company) as of November 30, 2025 and 2024, the related consolidated income statements, statements of comprehensive income, cash flow statements and statements of shareholders’ equity for each of the three years in the period ended November 30, 2025, and the related notes and financial statement schedule listed in the Index at item 15(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at November 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended November 30, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of November 30, 2025, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated January 22, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.
43
| Valuation of Indefinite-lived Intangible Assets | |||||
| Description of the Matter | At November 30, 2025, the Company's indefinite-lived intangible assets consist of brand names and trademarks with an aggregate carrying value of approximately $3.0 billion. As explained in Note 1 to the consolidated financial statements, these assets are assessed for impairment at least annually using the relief-from-royalty methodology to determine their fair values. If the fair value of any brand name or trademark is less than its carrying amount, an impairment loss is recognized in an amount equal to the difference. Auditing the Company's impairment assessments is complex due to the significant estimation required in determining the fair value of the brand names and trademarks. Significant management judgment is also involved in determining whether individual brand names and trademarks should be grouped for purposes of the fair value determination or must be evaluated individually. The Company's methodologies for estimating the fair value of these assets involve significant assumptions and inputs, including projected financial information for net sales and operating profit by brand, royalty rates, and discount rates, all of which are sensitive to and affected by economic, industry, and company-specific qualitative factors. These significant assumptions and inputs are forward-looking and could be affected by future economic and market conditions. | ||||
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company's controls over the Company’s indefinite-lived intangible asset impairment assessments, including controls over management’s review of its asset groupings and the significant assumptions described above. We tested controls over the review of methodologies used, significant assumptions and inputs, asset groupings, and completeness and accuracy of the data used in the measurements. To test the estimated fair value of the Company’s indefinite-lived intangible assets, we performed audit procedures that included, among others, evaluating the asset groupings used by the Company to perform its impairment assessments, assessing the methodologies, and testing the significant assumptions discussed above and the underlying data used by the Company in its analyses. We compared the significant assumptions to current industry, market and economic trends, to the Company's historical results, to other guideline companies within the same industry, and to other relevant data. In addition, we evaluated management’s ability to estimate net sales by comparing the current year actual net sales for certain brand names or trademarks to the estimates made in the Company’s prior year impairment assessments. We also performed sensitivity analyses of certain significant assumptions to evaluate the potential change in the fair values of the brand names and trademarks resulting from hypothetical changes in underlying assumptions. We used an internal valuation specialist to assist in our evaluation of the methodologies used and significant assumptions and inputs used by the Company to determine the estimated fair value of certain brand names and trademarks. | ||||
We have served as the Company’s auditor since 1982.
Baltimore, Maryland
January 22, 2026
44
CONSOLIDATED INCOME STATEMENTS
| for the year ended November 30 (millions except per share data) | 2025 | 2024 | 2023 | ||||||||
| Net sales | $ | 6,840.3 | $ | 6,723.7 | $ | 6,662.2 | |||||
| Cost of goods sold | 4,248.1 | 4,132.7 | 4,159.7 | ||||||||
| Gross profit | 2,592.2 | 2,591.0 | 2,502.5 | ||||||||
| Selling, general and administrative expense | 1,500.3 | 1,521.2 | 1,478.3 | ||||||||
| Special charges | 21.1 | 9.5 | 61.2 | ||||||||
| Operating income | 1,070.8 | 1,060.3 | 963.0 | ||||||||
| Interest expense | 196.2 | 209.4 | 208.2 | ||||||||
| Other income, net | 38.4 | 47.4 | 43.9 | ||||||||
| Income from consolidated operations before income taxes | 913.0 | 898.3 | 798.7 | ||||||||
| Income tax expense | 195.8 | 184.0 | 174.5 | ||||||||
| Net income from consolidated operations | 717.2 | 714.3 | 624.2 | ||||||||
| Income from unconsolidated operations | 72.2 | 74.2 | 56.4 | ||||||||
| Net income | $ | 789.4 | $ | 788.5 | $ | 680.6 | |||||
| Earnings per share–basic | $ | 2.94 | $ | 2.94 | $ | 2.54 | |||||
| Earnings per share–diluted | $ | 2.93 | $ | 2.92 | $ | 2.52 | |||||
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| for the year ended November 30 (millions) | 2025 | 2024 | 2023 | ||||||||
| Net income | $ | 789.4 | $ | 788.5 | $ | 680.6 | |||||
| Net income attributable to non-controlling interest | 6.1 | 7.5 | 5.5 | ||||||||
| Other comprehensive income (loss): | |||||||||||
| Unrealized components of pension and other postretirement plans | 14.3 | (24.3) | (3.1) | ||||||||
| Currency translation adjustments | 123.4 | (90.7) | 92.5 | ||||||||
| Change in derivative financial instruments | (6.4) | 3.3 | (6.8) | ||||||||
| Deferred taxes | (3.5) | 4.6 | 8.0 | ||||||||
| Total other comprehensive income (loss) | 127.8 | (107.1) | 90.6 | ||||||||
| Comprehensive income | $ | 923.3 | $ | 688.9 | $ | 776.7 | |||||
See Notes to Consolidated Financial Statements.
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CONSOLIDATED BALANCE SHEETS
| at November 30 (millions) | 2025 | 2024 | ||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 95.9 | $ | 186.1 | ||||
| Trade accounts receivable, net of allowances | 628.9 | 587.4 | ||||||
| Inventories | 1,272.0 | 1,239.9 | ||||||
| Prepaid expenses and other current assets | 141.3 | 125.6 | ||||||
| Total current assets | 2,138.1 | 2,139.0 | ||||||
| Property, plant and equipment, net | 1,448.8 | 1,413.0 | ||||||
| Goodwill | 5,301.3 | 5,227.5 | ||||||
| Intangible assets, net | 3,293.1 | 3,318.9 | ||||||
| Other long-term assets | 1,019.1 | 971.9 | ||||||
| Total assets | $ | 13,200.4 | $ | 13,070.3 | ||||
| Liabilities | ||||||||
| Short-term borrowings | $ | 381.4 | $ | 483.1 | ||||
| Current portion of long-term debt | 509.1 | 265.2 | ||||||
| Trade accounts payable | 1,259.4 | 1,238.1 | ||||||
| Other accrued liabilities | 912.3 | 896.4 | ||||||
| Total current liabilities | 3,062.2 | 2,882.8 | ||||||
| Long-term debt | 3,105.8 | 3,593.6 | ||||||
| Deferred taxes | 835.8 | 840.5 | ||||||
| Other long-term liabilities | 428.5 | 436.6 | ||||||
| Total liabilities | 7,432.3 | 7,753.5 | ||||||
| Shareholders’ equity | ||||||||
Common stock; 640.0 shares authorized; 14.9 and 15.7 shares issued and outstanding, respectively | 582.4 | 587.6 | ||||||
Common stock non-voting; 640.0 shares authorized; 253.5 and 252.3 shares issued and outstanding, respectively | 1,700.8 | 1,649.6 | ||||||
| Retained earnings | 3,816.4 | 3,545.0 | ||||||
| Accumulated other comprehensive loss | (363.1) | (491.2) | ||||||
| Total McCormick shareholders’ equity | 5,736.5 | 5,291.0 | ||||||
| Non-controlling interests | 31.6 | 25.8 | ||||||
| Total shareholders’ equity | 5,768.1 | 5,316.8 | ||||||
| Total liabilities and shareholders’ equity | $ | 13,200.4 | $ | 13,070.3 | ||||
See Notes to Consolidated Financial Statements.
46
CONSOLIDATED CASH FLOW STATEMENTS
| for the year ended November 30 (millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Operating activities | |||||||||||||||||
| Net income | $ | 789.4 | $ | 788.5 | $ | 680.6 | |||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Depreciation and amortization | 231.3 | 208.8 | 199.3 | ||||||||||||||
| Stock-based compensation | 46.2 | 47.4 | 63.4 | ||||||||||||||
| Loss on the sale of a business | — | — | 1.2 | ||||||||||||||
| (Gain) loss on sale of assets | — | (2.1) | 0.2 | ||||||||||||||
| Deferred income tax benefit | (6.5) | (30.3) | (5.4) | ||||||||||||||
| Income from unconsolidated operations | (72.2) | (74.2) | (56.4) | ||||||||||||||
| Changes in operating assets and liabilities (net of effect of businesses acquired and disposed) | |||||||||||||||||
| Trade accounts receivable | (14.7) | (20.5) | 3.4 | ||||||||||||||
| Inventories | 23.9 | (125.0) | 225.0 | ||||||||||||||
| Trade accounts payable | 1.2 | 135.1 | (68.1) | ||||||||||||||
| Other assets and liabilities | (94.2) | (72.6) | 109.0 | ||||||||||||||
| Dividends received from unconsolidated affiliates | 57.8 | 66.8 | 85.1 | ||||||||||||||
| Net cash flow provided by operating activities | 962.2 | 921.9 | 1,237.3 | ||||||||||||||
| Investing activities | |||||||||||||||||
| Acquisition of business | (34.1) | — | — | ||||||||||||||
| Proceeds from sale of business | — | — | 1.0 | ||||||||||||||
| Capital expenditures (including software) | (221.8) | (274.9) | (263.9) | ||||||||||||||
| Other investing activities | 0.7 | 5.9 | 2.4 | ||||||||||||||
| Net cash flow used in investing activities | (255.2) | (269.0) | (260.5) | ||||||||||||||
| Financing activities | |||||||||||||||||
| Short-term borrowings (repayments), net | (101.4) | 211.1 | (964.6) | ||||||||||||||
| Long-term debt borrowings | 2.7 | 495.5 | 496.4 | ||||||||||||||
| Payment of debt issuance costs | — | (1.0) | (1.1) | ||||||||||||||
| Long-term debt repayments | (267.9) | (801.1) | (268.1) | ||||||||||||||
| Proceeds from exercised stock options | 20.9 | 17.5 | 16.6 | ||||||||||||||
| Taxes withheld and paid on employee stock awards | (13.2) | (9.0) | (10.8) | ||||||||||||||
| Common stock acquired by purchase | (34.8) | (53.1) | (35.7) | ||||||||||||||
| Dividends paid | (483.0) | (451.0) | (418.5) | ||||||||||||||
| Other financing activities | 35.8 | 8.0 | 1.6 | ||||||||||||||
| Net cash flow used in financing activities | (840.9) | (583.1) | (1,184.2) | ||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 43.7 | (50.3) | 40.0 | ||||||||||||||
| Increase (decrease) in cash and cash equivalents | (90.2) | 19.5 | (167.4) | ||||||||||||||
| Cash and cash equivalents at beginning of year | 186.1 | 166.6 | 334.0 | ||||||||||||||
| Cash and cash equivalents at end of year | $ | 95.9 | $ | 186.1 | $ | 166.6 | |||||||||||
See Notes to Consolidated Financial Statements.
47
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
| (millions) | Common Stock Shares | Common Stock Non-Voting Shares | Common Stock Amount | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Non-controlling Interests | Total Shareholders’ Equity | ||||||||||||||||
| Balance, November 30, 2022 | 17.4 | 250.6 | $ | 2,138.6 | $ | 3,022.5 | $ | (480.6) | $ | 18.7 | $ | 4,699.2 | |||||||||||
| Net income | — | 680.6 | — | — | 680.6 | ||||||||||||||||||
| Net income attributable to non-controlling interest | — | — | — | 5.5 | 5.5 | ||||||||||||||||||
| Other comprehensive income (loss), net of tax | — | — | 92.0 | (1.4) | 90.6 | ||||||||||||||||||
| Dividends | — | (426.6) | — | — | (426.6) | ||||||||||||||||||
| Stock-based compensation | 63.4 | — | — | — | 63.4 | ||||||||||||||||||
| Shares purchased and retired | (0.6) | — | (20.6) | (26.8) | — | — | (47.4) | ||||||||||||||||
| Shares issued | 0.7 | — | 18.2 | — | — | — | 18.2 | ||||||||||||||||
| Equal exchange | (0.7) | 0.7 | — | — | — | — | — | ||||||||||||||||
| Balance, November 30, 2023 | 16.8 | 251.3 | $ | 2,199.6 | $ | 3,249.7 | $ | (388.6) | $ | 22.8 | $ | 5,083.5 | |||||||||||
| Net income | — | 788.5 | — | — | 788.5 | ||||||||||||||||||
| Net income attributable to non-controlling interest | — | — | — | 7.5 | 7.5 | ||||||||||||||||||
| Other comprehensive income (loss), net of tax | — | — | (102.6) | (4.5) | (107.1) | ||||||||||||||||||
| Dividends | — | (459.1) | — | — | (459.1) | ||||||||||||||||||
| Stock-based compensation | 47.4 | — | — | — | 47.4 | ||||||||||||||||||
| Shares purchased and retired | (0.9) | — | (29.6) | (34.1) | — | — | (63.7) | ||||||||||||||||
| Shares issued | 0.8 | — | 19.8 | — | — | — | 19.8 | ||||||||||||||||
| Equal exchange | (1.0) | 1.0 | — | — | — | — | — | ||||||||||||||||
| Balance, November 30, 2024 | 15.7 | 252.3 | $ | 2,237.2 | $ | 3,545.0 | $ | (491.2) | $ | 25.8 | $ | 5,316.8 | |||||||||||
| Net income | 789.4 | — | — | 789.4 | |||||||||||||||||||
| Net income attributable to non-controlling interest | — | — | — | 6.1 | 6.1 | ||||||||||||||||||
| Other comprehensive income (loss), net of tax | — | — | 128.1 | (0.3) | 127.8 | ||||||||||||||||||
| Dividends | — | (491.2) | — | — | (491.2) | ||||||||||||||||||
| Stock-based compensation | 46.2 | — | — | — | 46.2 | ||||||||||||||||||
| Shares purchased and retired | (0.6) | — | (24.6) | (26.8) | — | — | (51.4) | ||||||||||||||||
| Shares issued | 0.9 | 0.1 | 24.4 | — | — | — | 24.4 | ||||||||||||||||
| Equal exchange | (1.1) | 1.1 | — | — | — | — | — | ||||||||||||||||
| Balance, November 30, 2025 | 14.9 | 253.5 | $ | 2,283.2 | $ | 3,816.4 | $ | (363.1) | $ | 31.6 | $ | 5,768.1 | |||||||||||
See Notes to Consolidated Financial Statements.
48
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements include the accounts of our majority-owned or controlled subsidiaries and affiliates. Intercompany transactions have been eliminated. Investments in unconsolidated affiliates, over which we exercise significant influence, but not control, are accounted for by the equity method. Accordingly, our share of net income or loss from unconsolidated affiliates is included in net income. Certain prior period amounts have been reclassified to conform with the current period presentation.
Foreign Currency Translation
For majority-owned or controlled subsidiaries and affiliates located outside of the U.S. that use functional currencies other than the U.S. dollar, asset and liability accounts are translated at the exchange rates in effect at the balance sheet date. The resulting translation adjustments are included in accumulated other comprehensive income (loss), which is a separate component of shareholders’ equity. Income and expense items are translated at average monthly exchange rates. Gains and losses from foreign currency transactions of these majority-owned or controlled subsidiaries and affiliates—specifically, transactions denominated in currencies other than their functional currency—are included in net income, except for intercompany transactions designated as long-term investments.
Our unconsolidated affiliates located outside the U.S. generally use their local currencies as their functional currencies. The asset and liability accounts of those unconsolidated affiliates are translated at the rates of exchange at the balance sheet date, with the resultant translation adjustments included in accumulated other comprehensive income (loss) of those affiliates. Income and expense items of those affiliates are translated at average monthly rates of exchange. We record our ownership share of the net assets and accumulated other comprehensive income (loss) of our unconsolidated affiliates in our consolidated balance sheet on the lines entitled “Other long-term assets” and “Accumulated other comprehensive loss,” respectively. We record our ownership share of the net income of our unconsolidated affiliates, or a gain or loss associated with the sale of our ownership interest in our unconsolidated affiliates, in our consolidated income statement on the line entitled “Income from unconsolidated operations.”
Use of Estimates
Preparation of financial statements that follow accounting principles generally accepted in the U.S. requires us to make estimates and assumptions that affect the amounts reported in the financial statements and notes. Actual amounts could differ from these estimates.
Cash and Cash Equivalents
All highly liquid investments purchased with an original maturity of three months or less are classified as cash equivalents.
Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined under the first-in, first-out costing method (FIFO), including the use of average costs which approximate FIFO.
Property, Plant and Equipment
Property, plant and equipment is stated at historical cost and depreciated over its estimated useful life using the straight-line method for financial reporting and both accelerated and straight-line methods for tax reporting. The estimated useful lives range from 20 to 50 years for buildings and 3 to 15 years for machinery, equipment and other assets. Assets leased under finance leases are depreciated over the shorter of the lease term or their estimated useful lives unless it is reasonably certain that we will obtain ownership by the end of the lease term. Repairs and maintenance costs are expensed as incurred.
Computer Software
We capitalize costs of software developed or obtained for internal use. Capitalized software development costs include only (1) direct costs paid to others for materials and services to develop or buy the software, (2) payroll and payroll-related costs for employees who work directly on the software development project, and (3) interest costs while developing the software. Capitalization of these costs stops, and amortization begins, when the project is substantially complete and ready for use.
49
Capitalized software is classified within "Other long-term assets" in the consolidated balance sheet. Software is amortized using the straight-line method over estimated useful lives ranging from 3 to 13 years, but not exceeding the expected life of the product.
Goodwill and Other Intangible Assets
We review the carrying value of goodwill and indefinite-lived intangible assets and conduct tests of impairment on an annual basis as described below. We also test goodwill for impairment if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is below its carrying amount and test indefinite-lived intangible assets for impairment if events or changes in circumstances indicate that the asset might be impaired. Separable intangible assets that have finite useful lives are amortized over those lives.
Determining the fair value of a reporting unit or an indefinite-lived purchased intangible asset is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, assumed royalty rates, future economic and market conditions and determination of appropriate market comparables. We base our fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from these estimates.
Goodwill Impairment
Our reporting units used to assess potential goodwill impairment are the same as our business segments. We estimate the fair value of a reporting unit by using a discounted cash flow model and then compare that to the carrying amount of the reporting unit, including intangible assets and goodwill. An impairment charge would be recognized to the extent that the carrying amount of the reporting unit exceeds the estimated fair value of the reporting unit.
Indefinite-lived Intangible Asset Impairment
Our indefinite-lived intangible assets consist of acquired brand names and trademarks. We estimate fair value by using a relief-from-royalty method and then compare that to the carrying amount of the indefinite-lived intangible asset. If the carrying amount of the indefinite-lived intangible asset exceeds its estimated fair value, an impairment charge would be recorded to the extent the recorded indefinite-lived intangible asset exceeds the fair value.
Long-lived Asset Impairment
Fixed assets and amortizable intangible assets are reviewed for impairment as events or changes in circumstances occur indicating that the carrying value of the asset may not be recoverable. Undiscounted cash flow analyses are used to determine if an impairment exists. If an impairment is determined to exist, the loss would be calculated based on the excess of the asset’s carrying value over its estimated fair value.
Accounts Payable - Supplier Finance Program
In order to manage our cash flow and related liquidity, we work with our suppliers to optimize our terms and conditions, which include the extension of payment terms. We offer certain suppliers access to a third-party Supply Chain Finance program (SCF) with several global financial institutions (SCF Banks). The terms of our payment obligation are not impacted by a supplier’s participation in the SCF. Under the SCF, qualifying suppliers may elect to sell their receivables from us to a SCF Bank. These participating suppliers negotiate their receivables sales arrangements directly with the respective SCF Bank. While we are not party to those agreements, the SCF Banks allow the participating suppliers to utilize our creditworthiness in establishing credit spreads and associated costs. This generally provides the suppliers with more favorable terms than they would be able to secure on their own. We have no economic interest in a supplier’s decision to sell a receivable. Once a qualifying supplier elects to participate in the SCF and reaches an agreement with a SCF Bank, the supplier elects which of our individual invoices they sell to the SCF bank. Regardless of whether an individual invoice is sold by the supplier to the SCF Bank, all of our payments to participating suppliers are paid to the SCF Bank on the invoice due date. The SCF Bank pays the supplier on the invoice due date for any invoices that were not previously sold by the supplier to the SCF Bank.
Our current payment terms with our suppliers, which we deem to be commercially reasonable, generally range from zero to 180 days dependent upon their respective industry and geography. All outstanding amounts related to suppliers participating in the SCF are recorded within the line entitled "Trade accounts payable" in our consolidated balance sheets, and the associated payments are included in operating activities within our consolidated cash flow statement.
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The following table presents a roll forward of our obligations relating to suppliers participating in the SCF program for the year ended November 30, 2025:
| (millions) | 2025 | ||||
| Obligation at beginning of year | $ | 417.4 | |||
| 1,124.8 | |||||
| Invoice amounts paid | (1,209.7) | ||||
| Foreign currency translation and other adjustments | (0.4) | ||||
| Obligation at end of year | $ | 332.1 | |||
Leases
We determine whether a contract is or contains a lease at contract inception based on the presence of identified assets and our right to obtain substantially all the economic benefit from or to direct the use of such assets. When we determine a lease exists, we record a right-of-use (“ROU”) asset and corresponding lease liability on our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the lease term. Lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets are recognized at the lease commencement date at the value of the lease liability and are adjusted for any prepayments, lease incentives received, and initial direct costs incurred. Lease liabilities are recognized at the lease commencement date based on the present value of remaining lease payments over the lease term. As the discount rate implicit in the lease is not readily determinable in most of our leases, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We do not record lease contracts with a term of 12 months or less on our consolidated balance sheets.
When our real estate lease arrangements include lease and non-lease components (for example, common area maintenance), we account for each component separately, based on their relative standalone prices. For all other asset categories, we combine lease components and non-lease components into a single lease commitment.
We recognize fixed lease expense for operating leases on a straight-line basis over the lease term. For finance leases, we recognize amortization expense over the shorter of the estimated useful life of the underlying assets or the lease term. In instances of title transfer, expense is recognized over the useful life. Interest expense on a finance lease is recognized using the effective interest method over the lease term.
Revenue Recognition
We manufacture, market, and distribute spices, seasoning mixes, condiments and other flavorful products to the entire food industry—retailers, food manufacturers, and foodservice businesses. Our revenue arrangements generally include a single performance obligation relating to the fulfillment of a customer order, which in some cases is governed by a master sales agreement, for the purchase of our products. We recognize revenue at a point in time when control of the ordered products passes to the customer, which principally occurs either upon shipment or delivery to the customer or upon pick-up by the customer, depending upon terms included in the particular customer arrangement. Revenues are recorded net of trade and sales incentives and estimated product returns. Known or expected pricing or revenue adjustments, such as trade discounts, rebates and returns, are estimated at the time of sale. All taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from a customer for sales, value added and other excise taxes are excluded from net sales. We account for product shipping and handling activities that occur before the customer has obtained control of a good as fulfillment activities (i.e., an expense) rather than as a promised service with costs for these activities recorded within Cost of goods sold. We expense any incremental costs of obtaining a contract when the contract is for a period of one year or less.
Amounts billed and due from our customers are classified as accounts receivable on the balance sheet and require payment on a short-term basis. Our allowance for doubtful accounts represents our estimate of probable non-payments and credit losses in our existing receivables, as determined based on a review of past due balances and other specific account data.
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The following table sets forth our net sales by the Americas, Europe, Middle East and Africa (EMEA), and Asia/Pacific (APAC) geographic regions:
| (millions) | Americas | EMEA | APAC | Total | ||||||||||
| 2025 | $ | 4,867.8 | $ | 1,268.5 | $ | 704.0 | $ | 6,840.3 | ||||||
| 2024 | $ | 4,801.9 | $ | 1,239.3 | $ | 682.5 | $ | 6,723.7 | ||||||
| 2023 | $ | 4,756.9 | $ | 1,212.8 | $ | 692.5 | $ | 6,662.2 | ||||||
Performance Obligations
Our revenues primarily result from contracts or purchase orders with customers, which generally are both short-term in nature and have a single performance obligation—the delivery of our products to customers. We assess the goods and services promised in our customers’ contracts or purchase orders and identify a performance obligation for each promise to transfer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, we consider all the goods or services promised, whether explicitly stated or implied based on customary business practices.
Significant Judgments
Sales are recorded net of trade and sales incentives and estimated product returns. Known or expected pricing or revenue adjustments, such as trade discounts, rebates or returns, are estimated at the time of sale. Where applicable, future reimbursements are estimated based on a combination of historical patterns and the Company's then-current expectations regarding what was earned through these programs as of the balance sheet date. 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. Estimates that affect revenue, such as trade incentives and product returns, are monitored and adjusted each period until the incentives or product returns are realized. The adjustments recognized during the years ended November 30, 2025, 2024, and 2023 resulting from updated estimates of revenue for prior year product sales were not significant. The unsettled portion remaining in accrued liabilities for these activities was $228.8 million and $206.4 million at November 30, 2025 and 2024, respectively.
Shipping and Handling
Shipping and handling costs on our products sold to customers related to activities that occur before the customer has obtained control of a good are included in cost of goods sold in the consolidated income statement.
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. Brand marketing support costs include advertising and promotions but exclude trade funds paid to customers for such activities. All trade funds paid to customers are reflected in the consolidated income statement as a reduction of net sales. Promotion costs include public relations, shopper marketing, social marketing activities, general consumer promotion activities and depreciation of assets used in these promotional activities. Advertising costs include the development, production and communication of advertisements through television, digital, print and radio. Development and production costs are expensed in the period in which the advertisement is first run. All other costs of advertising are expensed as incurred. Advertising expense was $225.1 million, $218.8 million, and $198.1 million for 2025, 2024, and 2023, respectively.
Research and Development
Research and development costs are expensed as incurred and are included in our consolidated income statement in the line entitled "Selling, general and administrative expense." Research and development expense was $106.1 million, $102.9 million, and $94.9 million for 2025, 2024, and 2023, respectively.
Income Taxes
Income taxes are recognized in accordance with the liability method of accounting. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax law. Inherent in determining our annual tax rate are judgments regarding business plans, planning opportunities, and expectations about future outcomes. Realization of certain deferred tax assets, primarily net operating loss and other carryforwards, is dependent upon generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods. Changes in enacted tax rates are reflected in the tax provision as they occur.
We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. When assessing the need for valuation allowances, we consider future taxable income and ongoing
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prudent and feasible tax planning strategies. Should a change in circumstances lead to a change in judgment about the realizability of deferred tax assets in future years, we would adjust related valuation allowances in the period that the change in circumstances occurs, along with a corresponding adjustment to our provision for income taxes.
We recognize a tax position in our financial statements when it is more likely than not that the position will be sustained upon examination based on the technical merits of the position. That position is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The resolution of tax reserves and changes in valuation allowances could be material to our results of operations for any period but is not expected to be material to our financial position.
We are subject to a U.S. tax requirement that certain income earned by foreign subsidiaries, referred to as Global Intangible Low-Taxed Income (GILTI), must be included in the gross income of the subsidiary’s U.S. shareholder. Accounting principles generally accepted in the U.S. provide for an accounting policy election of either recognizing deferred taxes for temporary differences expected to reverse as GILTI in future years or recognizing such taxes as a current period expense when incurred. We have elected to treat GILTI as a current period expense when incurred.
Stock-Based Compensation
We recognize stock-based compensation expense associated with options and restricted stock units (RSUs), which contain provisions that such awards fully vest upon an employee’s retirement, ratably over the shorter of the vesting period or the employees’ retirement eligibility date. Accordingly, we recognize stock-based compensation associated with options and RSUs subject to immediate retirement eligible vesting provisions on the date of grant.
Compensation expense associated with our long-term performance plan (LTPP) is recorded in the income statement over the three-year period of the program based on the number of shares ultimately expected to be awarded using our estimate of the most likely outcome of achieving the performance objectives.
We recognize stock-based compensation expense associated with price-vested stock options ratably over the vesting period as such options do not contain provisions that fully vest these awards upon an employee becoming retirement eligible.
We estimate forfeitures associated with all stock-based compensation at the time of grant based on historical experience and revise this estimate in subsequent periods if actual forfeitures differ.
Derivative Instruments
We record all derivatives on our balance sheet at fair value. The fair value of derivative instruments is recorded in our consolidated balance sheet on the lines entitled “Other current assets," "Other long-term assets," "Other accrued liabilities," or "Other long-term liabilities" depending on their fair value and maturity. Gains and losses representing either hedge ineffectiveness, hedge components excluded from the assessment of effectiveness, or hedges of translational exposure are recorded in our consolidated income statement in the lines entitled "Other income (expense), net" or "Interest expense." In our consolidated cash flow statement, settlements of cash flow and fair value hedges are classified as operating activities; settlements of all other derivative instruments, including instruments for which hedge accounting has been discontinued, are classified consistent with the nature of the instruments.
Cash flow hedges. Qualifying derivatives are accounted for as cash flow hedges when the hedged item is a forecasted transaction. Gains and losses on these instruments are recorded in our consolidated balance sheet on the line entitled “Accumulated other comprehensive income (loss)" until the underlying transaction is recorded in earnings. When the hedged item is realized, gains or losses are reclassified from "Accumulated other comprehensive income (loss)" in our consolidated balance sheet to our consolidated income statement on the same line items as the underlying transactions.
Fair value hedges. Qualifying derivatives are accounted for as fair value hedges when the hedged item is a recognized asset, liability, or firm commitment. Gains and losses on these instruments are recorded in earnings, offsetting gains and losses on the hedged item.
Net investment hedges. Qualifying derivative and nonderivative financial instruments are accounted for as net investment hedges when the hedged item is a nonfunctional currency investment in a subsidiary. Gains and losses on these instruments are included in foreign currency translation adjustments, a component of “Accumulated other comprehensive income (loss)" in our consolidated balance sheet.
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Employee Benefit and Retirement Plans
We sponsor defined benefit pension plans in the U.S. and certain foreign locations. In addition, we sponsor defined contribution plans in the U.S. We contribute to defined contribution plans in locations outside the U.S., including government-sponsored retirement plans. We also currently provide postretirement medical and life insurance benefits to certain U.S. employees and retirees.
We recognize the overfunded or underfunded status of our defined benefit pension plans as an asset or a liability in our balance sheet, with changes in the funded status recorded through other comprehensive income in the year in which those changes occur.
The expected return on plan assets is determined using the expected rate of return and a calculated value of plan assets referred to as the market-related value of plan assets. Differences between assumed and actual returns are amortized to the market-related value of assets on a straight-line basis over five years.
We use the corridor approach in the valuation of defined benefit pension and postretirement benefit plans. The corridor approach defers all actuarial gains and losses resulting from variances between actual results and actuarial assumptions. Those unrecognized gains and losses are amortized when the net gains and losses exceed 10% of the greater of the market-related value of plan assets or the projected benefit obligation at the beginning of the year. The amount in excess of the corridor is amortized over the average remaining life expectancy of retired plan participants, for plans whose benefits have been frozen, or the average remaining service period to retirement date of active plan participants.
Accounting Pronouncements Adopted in 2023
In March 2020, the FASB issued ASU No. 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting that provides optional expedients for a limited period of time for accounting for contracts, hedging relationships, and other transactions affected by the London Interbank Offered Rate (LIBOR) or other reference rates expected to be discontinued. These optional expedients could be applied from March 2020 through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06 Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 which deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The phase out of LIBOR reference rates occurred at different times and began on January 1, 2022. During 2022 and 2023, we amended our interest rate swaps expiring in November 2025 and August 2027, the cross-currency interest rate swap expiring in August 2027, and our five-year revolving credit facility expiring in July 2026 to no longer use LIBOR. Our adoption of this standard was completed during 2023. There was no material impact to our consolidated financial statements associated with adopting this new standard.
Accounting Pronouncements Adopted in 2023 and 2025
In September 2022, the FASB issued ASU No. 2022-04: Liabilities - Supplier Finance Programs (Topic 450-50): Disclosure of Supplier Finance Program Obligations that requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period, including a roll-forward of those obligations. The guidance does not affect the recognition, measurement, or financial statement presentation of supplier finance program obligations. We met the requirements to disclose the key terms of the programs and information about obligations outstanding effective November 30, 2023. The requirement to include a roll-forward of the obligations is effective for our annual period ending November 30, 2025. We include disclosure regarding the key terms of our program and a roll forward of the obligation outstanding in Note 1. The adoption of the new standard did not have a material impact on our consolidated financial statements.
Accounting Pronouncements Adopted in 2025
In November 2023, the FASB issued ASU No. 2023-07: Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures that requires entities to report incremental information about significant segment expenses included in a segment’s profit or loss measure as well as the position and title of the chief operating decision maker. The guidance also requires interim disclosures related to reportable segment profit or loss and assets that had previously only been disclosed annually. The new standard requirements are effective for our annual period ending November 30, 2025 and interim periods of our fiscal year ending November 30, 2026. We include significant segment expenses and the required disclosure about our chief operating decision maker in Note 15. The adoption of the new standard did not have a material impact on our consolidated financial statements.
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Recently Issued Accounting Pronouncements — Pending Adoption
In December 2023, the FASB issued ASU No. 2023-09: Income Taxes (Topic 740): Improvements to Income Tax Disclosures that requires entities to disclose additional information about federal, state, and foreign income taxes primarily related to the income tax rate reconciliation and income taxes paid. The new standard also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The guidance is effective for our fiscal year ending November 30, 2026. The guidance does not affect recognition or measurement in our consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03: Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) that requires more detailed disclosure about certain costs and expenses presented in the income statement, including inventory purchases, employee compensation, selling expense and depreciation expense. The guidance is effective for our annual period ending November 30, 2028 and our interim periods during the fiscal year ending November 30, 2029. The guidance does not affect recognition or measurement in our consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06: Intangibles - Goodwill and Other - Internal-Use Software (Topic 350-40): Targeted Improvements to the Accounting for Internal-Use Software that changes the guidance on when to begin capitalizing costs to develop internal-use software. The guidance does not change the types of costs that are capitalizable. The guidance permits prospective adoption for our fiscal year ending November 30, 2028. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.
In November 2025, the FASB issued ASU No. 2025-09: Derivatives and Hedging (Topic 815), Hedge Accounting Improvements that better aligns the hedge accounting model with risk management activities. The guidance is effective for our fiscal year ending November 30, 2028, with early adoption permitted. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements and our date of adoption.
2. SPECIAL CHARGES
The following is a summary of special charges, including transaction and integration expenses, recognized for the years ended November 30 (in millions):
| 2025 | 2024 | 2023 | |||||||||
| Employee severance and related benefits | $ | 15.9 | $ | 2.7 | $ | 34.4 | |||||
| Other costs | 3.3 | 6.8 | 26.8 | ||||||||
| Transaction and integration expenses | 1.9 | — | — | ||||||||
| Special charges | $ | 21.1 | $ | 9.5 | $ | 61.2 | |||||
| Transaction and integration expenses included in cost of goods sold | 2.1 | — | — | ||||||||
| Total special charges | $ | 23.2 | $ | 9.5 | $ | 61.2 | |||||
Special Charges
In our consolidated income statement, we include a separate line item captioned “Special charges” in arriving at our consolidated operating income. Special charges consist of expenses associated with certain actions undertaken to reduce fixed costs, simplify or improve processes, and improve our competitiveness. These charges are of such significance in terms of both up-front costs and organizational/structural impact to require advance approval by our Management Committee, comprised of our senior management, including our Chairman, President and Chief Executive Officer. Expenses associated with the approved action are classified as special charges upon recognition and monitored on an ongoing basis through completion. Certain ancillary expenses related to these actions approved by our Management Committee do not qualify for accrual upon approval but are included as special charges as incurred during the course of the actions.
We continue to evaluate changes to our organizational structure to reduce fixed costs, simplify or improve processes, and improve our competitiveness.
During 2025, we recognized $19.2 million of special charges, consisting of $15.9 million in employee severance and related benefit costs related to global selling, general and administrative streamlining actions approved by our Management Committee and $3.3 million associated with other actions.
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During 2024, we recognized $9.5 million of special charges, consisting of $4.5 million associated with our GOE program, as more fully described below, and $5.0 million associated with the transition of a manufacturing facility in EMEA, as more fully described below.
During 2023, we recognized $61.2 million of special charges, consisting principally of $42.8 million associated with our GOE program, as more fully described below, $8.7 million associated with the transition of a manufacturing facility in EMEA, as more fully described below, and streamlining actions of $8.8 million in the Americas region, and $0.9 million in the EMEA region.
As of November 30, 2025 and 2024, reserves associated with special charges of $4.7 million and $2.7 million respectively, are included in "Other accrued liabilities" in our consolidated balance sheet.
In 2022, our Management Committee approved the Global Operating Effectiveness (GOE) program. The GOE program included a voluntary retirement plan, which included enhanced separation benefits to certain U.S. employees aged 55 years or older with at least ten years of service to the Company. This voluntary retirement plan commenced in November 2022 and participants were required to submit their notifications by December 30, 2022. The total cost of the GOE program, which was recognized as special charges in our consolidated income statement during the three year period ending November 30, 2024, was $52.9 million, primarily including employee severance and related benefit costs. Special charges recognized during the year ended November 30, 2024 included $4.2 million in severance and related benefit costs and $0.3 million of third-party expenses and other costs. Special charges recognized during the year ended November 30, 2023 included $19.7 million associated with the voluntary retirement plan, $13.4 million of employee severance and related benefit costs and $9.7 million of third-party expenses and other costs.
In 2022, our Management Committee approved an initiative to consolidate our manufacturing operations in the United Kingdom into a net-zero carbon condiments manufacturing and distribution center facility with state-of-the-art technology. These changes to our supply chain operations were implemented to improve profitability by consolidating our operations into a scalable platform while expanding our capacity. The total cost of this initiative was $41.4 million which was recognized as special charges in our consolidated income statement through 2024, including employee severance and related benefit costs, accelerated depreciation, equipment relocation costs, decommissioning and other property related lease exit costs. During 2024, we recognized a reversal of $1.5 million associated with severance and related benefit costs, based on a change in estimate, and $6.5 million in third-party expenses and other costs. During 2023, we recognized $1.6 million in accelerated depreciation and $7.1 million in third party expenses and other costs.
Transaction and Integration Expenses
On March 31, 2025, we purchased substantially all of the assets of Jurado, Inc. (Jurado), a supplier of chili mash located in Las Cruces, New Mexico. The purchase price for Jurado was $38.1 million, including $14.3 million associated with a customary purchase price adjustment and $4.0 million of payments to be made in $2.0 million installments on the first and second anniversary of the acquisition date. The valuation of the acquired assets resulted in $32.3 million allocated to tangible assets acquired, $2.7 million allocated to other intangible assets, and $3.1 million allocated to goodwill, which is deductible for tax purposes. Tangible assets principally consist of $26.4 million of raw material and work-in-process inventory which were valued using a net realizable value approach, resulting in a step-up of $2.1 million that was recognized in cost of goods sold as the related inventory was sold, and property, plant and equipment of $5.8 million. The determination of the fair value of the acquired Jurado assets was finalized during 2025. The results of Jurado’s operations have been included in our financial statements from the date of the acquisition and are not material.
During 2025, we recorded $4.0 million of transaction and integration costs which includes the step-up of acquired Jurado inventory recognized in cost of goods sold of $2.1 million and transaction costs of $1.9 million recognized in special charges.
The following is a summary of special charges by business segments for the years ended November 30 (in millions):
| 2025 | 2024 | 2023 | |||||||||
| Consumer segment | $ | 13.6 | $ | 3.4 | $ | 35.8 | |||||
| Flavor Solutions segment | 9.6 | 6.1 | 25.4 | ||||||||
| Total special charges | $ | 23.2 | $ | 9.5 | $ | 61.2 | |||||
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3. GOODWILL AND INTANGIBLE ASSETS
The following table displays intangible assets as of November 30:
| 2025 | 2024 | |||||||||||||
| (millions) | Gross carrying amount | Accumulated amortization | Gross carrying amount | Accumulated amortization | ||||||||||
| Definite-lived intangible assets | $ | 546.9 | $ | 302.6 | $ | 537.5 | $ | 262.5 | ||||||
| Indefinite-lived intangible assets: | ||||||||||||||
| Goodwill | 5,301.3 | — | 5,227.5 | — | ||||||||||
| Brand names and trademarks | 3,048.8 | — | 3,043.9 | — | ||||||||||
| 8,350.1 | — | 8,271.4 | — | |||||||||||
| Total goodwill and intangible assets | $ | 8,897.0 | $ | 302.6 | $ | 8,808.9 | $ | 262.5 | ||||||
Intangible asset amortization expense was $35.2 million, $35.0 million, and $34.9 million for 2025, 2024, and 2023, respectively. At November 30, 2025, definite-lived intangible assets had a weighted-average remaining life of approximately 8 years.
Amortization expense for the next five years, based on intangible asset balances as of November 30, 2025, is estimated to be as follows:
| 2026 | $ | 35.7 | |||
| 2027 | 33.9 | ||||
| 2028 | 32.7 | ||||
| 2029 | 28.0 | ||||
| 2030 | 25.9 | ||||
The changes in the carrying amount of goodwill by segment for the years ended November 30 were as follows:
| 2025 | 2024 | |||||||||||||
| (millions) | Consumer | Flavor Solutions | Consumer | Flavor Solutions | ||||||||||
| Beginning of year | $ | 3,583.1 | $ | 1,644.4 | $ | 3,609.6 | $ | 1,650.5 | ||||||
| Acquisition | 1.6 | 1.5 | — | — | ||||||||||
| Foreign currency fluctuations | 60.9 | 9.8 | (26.5) | (6.1) | ||||||||||
| End of year | $ | 3,645.6 | $ | 1,655.7 | $ | 3,583.1 | $ | 1,644.4 | ||||||
4. INVESTMENTS IN AFFILIATES
Income from unconsolidated operations was $72.2 million, $74.2 million, and $56.4 million in 2025, 2024, and 2023, respectively. Our principal earnings from unconsolidated affiliates are from our 50% interest in McCormick de Mexico. Profit from this joint venture represented 93% of income from unconsolidated operations in 2025 and 95% in both 2024 and 2023.
Summarized annual and year-end information from the financial statements of unconsolidated affiliates representing 100% of the businesses follows:
| (millions) | 2025 | 2024 | 2023 | ||||||||
| Net sales | $ | 1,233.3 | $ | 1,281.5 | $ | 1,193.2 | |||||
| Gross profit | 504.9 | 519.3 | 446.9 | ||||||||
| Net income | 157.6 | 162.8 | 124.3 | ||||||||
| Current assets | $ | 565.2 | $ | 497.4 | $ | 522.1 | |||||
| Noncurrent assets | 134.4 | 112.7 | 122.4 | ||||||||
| Current liabilities | 352.1 | 304.4 | 336.5 | ||||||||
| Noncurrent liabilities | 8.4 | 6.9 | 7.6 | ||||||||
Royalty income from unconsolidated affiliates was $35.6 million, $37.0 million, and $35.1 million for 2025, 2024, and 2023, respectively.
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On January 2, 2026, we acquired an additional 25% ownership interest in McCormick de Mexico from Grupo Herdez, for a purchase price of $750 million, which increases our ownership to a 75% controlling interest. We believe the acquisition creates opportunities for further growth in the Mexican market and provides a strategic platform for further expansion in Latin America. McCormick de Mexico is a prominent food company in Mexico, with a broad portfolio, including mayonnaise, spices, marmalades, mustard, hot sauce, and tea, sold under McCormick brands.
5. FINANCING ARRANGEMENTS
Our outstanding debt, including finance leases, was as follows at November 30:
| (millions) | 2025 | 2024 | ||||||
| Short-term borrowings | ||||||||
| Commercial paper | $ | 351.8 | $ | 431.3 | ||||
| Other | 29.6 | 51.8 | ||||||
| $ | 381.4 | $ | 483.1 | |||||
| Weighted-average interest rate of short-term borrowings at year-end | 4.1 | % | 4.7 | % | ||||
| Long-term debt | ||||||||
3.25% notes due 11/15/2025 | $ | — | $ | 250.0 | ||||
0.90% notes due 2/15/2026 | 500.0 | 500.0 | ||||||
3.40% notes due 8/15/2027(1) | 750.0 | 750.0 | ||||||
2.50% notes due 4/15/2030(2) | 500.0 | 500.0 | ||||||
1.85% notes due 2/15/2031 | 500.0 | 500.0 | ||||||
4.95% notes due 4/15/2033(3) | 500.0 | 500.0 | ||||||
4.70% notes due 10/15/2034(4) | 500.0 | 500.0 | ||||||
4.20% notes due 8/15/2047 | 300.0 | 300.0 | ||||||
| Other, including finance leases | 104.7 | 119.8 | ||||||
Unamortized discounts, premiums, debt issuance costs and fair value adjustments(5) | (39.8) | (61.0) | ||||||
| 3,614.9 | 3,858.8 | |||||||
| Less current portion | 509.1 | 265.2 | ||||||
| $ | 3,105.8 | $ | 3,593.6 | |||||
(1)Interest rate swaps, settled upon the issuance of these notes, effectively set the interest rate on the $750 million notes at a weighted-average fixed rate of 3.44%. Separately, the fixed interest rate on $250 million of the 3.40% notes due in 2027 is effectively converted to a variable rate by interest rate swaps through 2027. Net interest payments are based on USD SOFR plus 0.907% (previously U.S. three-month LIBOR plus 0.685%) with an effective rate of 4.98% as of November 30, 2025.
(2)Interest rate swaps, settled upon the issuance of these notes, effectively set the interest rate on the $500 million notes at a weighted-average fixed rate of 2.62%. Separately, the fixed interest rate on $250 million of the 2.50% notes due in 2030 is effectively converted to a variable rate by interest rate swaps through 2030. Net interest payments are based on USD SOFR plus 0.684% with an effective rate of 4.53% as of November 30, 2025.
(3)Treasury lock agreements, settled upon issuance of these notes, effectively set the interest rate on these $500 million notes at a weighted-average fixed rate of 5.00%.
(4)Treasury lock agreements, settled upon issuance of these notes, effectively set the interest rate on these $500 million notes at a weighted-average fixed rate of 4.68%.
(5)Includes unamortized discounts, premiums, and debt issuance costs of $(21.1) million and $(26.0) million as of November 30, 2025 and 2024, respectively. Includes fair value adjustment associated with interest rate swaps designated as fair value hedges of $(18.7) million and $(35.0) million as of November 30, 2025 and 2024, respectively.
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Maturities of long-term debt, including finance leases, during the fiscal years subsequent to November 30, 2025 are as follows (in millions):
| 2026 | $ | 509.1 | |||
| 2027 | 759.8 | ||||
| 2028 | 10.4 | ||||
| 2029 | 20.7 | ||||
| 2030 | 511.6 | ||||
| Thereafter | 1,843.1 | ||||
In October 2024, we issued $500 million aggregate principal amount of 4.70% unsecured senior notes due 2034. Interest is payable semi-annually in April and October each year, beginning on April 15, 2025. As part of the issuance of new debt, we entered and settled treasury locks in a notional amount of $150 million to manage our interest rate risk associated with the issuance of the unsecured senior notes. We designated the treasury lock arrangements as cash flow hedges with the realized gain of $0.9 million to be amortized to interest expense over the life of the underlying debt.
We have available credit facilities with domestic and foreign banks for various purposes. Some of these lines are committed lines and others are uncommitted lines and could be withdrawn at various times.
In May 2025, we entered into a five-year $2.0 billion revolving credit facility which will expire in May 2030. The current pricing for the five-year credit facility, on a fully drawn basis, is Term Secured Overnight Financing Rate (SOFR) plus 1.125%. The pricing of the revolving credit facility is based on a credit rating grid that contains a fully drawn maximum pricing of the credit facility equal to Term SOFR plus 1.50%. Upon entering into the May 2025 five-year $2.0 billion revolving credit facility, we simultaneously cancelled our existing five-year $1.5 billion revolving credit facility which was set to expire in June 2026 and the 364-day $500 million revolving credit facility which was set to expire in August 2025. We previously maintained a 364-day $500 million revolving credit facility that was entered into in June 2023 and expired in June 2024. In the second quarter of 2023, we amended our five-year revolving credit facility expiring in June 2026 to no longer use LIBOR. The pricing for the five-year credit facility, on a fully drawn basis, was Term SOFR plus 1.25% (previously LIBOR plus 1.25%). The pricing of that credit facility was based on a credit rating grid that contains a fully drawn maximum pricing of the credit facility equal to Term SOFR plus 1.75% (previously LIBOR plus 1.75%). The pricing for the 364-day credit facility, on a fully drawn basis, was Term SOFR plus 1.23%. The pricing of that 364-day credit facility was also based on a credit rating grid that contained a fully drawn maximum pricing of Term SOFR plus 1.60%. These credit facilities require a fee, and commitment fees were $2.2 million, $2.3 million and $2.4 million for 2025, 2024, and 2023, respectively.
Our revolving credit facilities support our commercial paper program and, after $351.8 million was used to support issued commercial paper, we have $1,648.2 million of capacity at November 30, 2025. The provisions of our revolving credit facilities restrict subsidiary indebtedness and require us to maintain a minimum interest coverage ratio. As of November 30, 2025, our capacity under our revolving credit facility was not affected by these covenants. We do not expect that these covenants would limit our access to our revolving credit facility for the foreseeable future.
In addition, we have several uncommitted lines totaling $346.9 million, which have a total unused capacity at November 30, 2025 of $346.9 million. These lines, by their nature, can be withdrawn based on the lenders’ discretion.
In January 2026, we entered into a 364-day $500 million revolving credit facility, which will expire in January 2027. The current pricing for the 364-day credit facility, on a fully drawn basis, is Term SOFR plus 1.125%. The pricing of the credit facility is based on a credit rating grid that contains a fully drawn maximum pricing of the credit facility equal to Term SOFR plus 1.50%.
We maintain a nonrecourse accounts receivable sale program whereby certain eligible U.S. receivables are sold to third party financial institution in exchange for cash. The program provides us with an additional means for managing liquidity. We account for the transfer of receivables as a sale at the point control is transferred and remove the sold receivables from our consolidated balance sheet. The proceeds from the sales of receivables are included in cash from operating activities in the consolidated cash flow statement. The outstanding amount of receivables sold under this program were approximately $430.0 million and $106.9 million as of November 30, 2025 and 2024, respectively. As collecting agent on the sold receivables, we had $45.4 million and $9.6 million of cash collected that was not yet remitted to the third party financial institution as of November 30, 2025 and 2024, respectively. This obligation is reported within other accrued liabilities on the consolidated balance sheet and within
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cash flows from financing activities on the consolidated cash flow statement. The incremental costs of factoring receivables under this arrangement were insignificant in 2025, 2024, and 2023.
As of November 30, 2025 and 2024, we had outstanding letters of credit of $64.2 million and $61.5 million, respectively. These letters of credit typically act as a guarantee of payment to certain third parties in accordance with specified terms and conditions. At November 30, 2025, we had no other outstanding guarantees. The unused portion of our letter of credit facility was $13.8 million at November 30, 2025.
6. LEASES
Our lease portfolio primarily consists of (i) certain real estate, including those related to a number of administrative, distribution and manufacturing locations; (ii) certain machinery and equipment, including forklifts; and (iii) automobiles, delivery trucks and other vehicles. A limited number of our lease agreements include rental payments that are adjusted periodically based on a market rate or index. Our lease agreements generally do not contain residual value guarantees or material restrictive covenants, with the exception of the non-cancellable synthetic lease discussed below.
The following presents the components of our lease expense for the years ended November 30 (in millions):
Supplemental balance sheet information related to leases as of November 30 were as follows (in millions):
| Leases | Classification | 2025 | 2024 | |||||||||||
| Assets: | ||||||||||||||
| Operating lease ROU assets | Other long-term assets | $ | $ | |||||||||||
| Finance lease ROU assets | Property, plant and equipment, net | |||||||||||||
| Total leased assets | $ | 294.3 | $ | 297.1 | ||||||||||
| Liabilities: | ||||||||||||||
| Current | ||||||||||||||
| Operating | Other accrued liabilities | $ | $ | |||||||||||
| Finance | Current portion of long-term debt | |||||||||||||
| Non-current | ||||||||||||||
| Operating | Other long-term liabilities | |||||||||||||
| Finance | Long-term debt | |||||||||||||
| Total lease liabilities | $ | 321.6 | $ | 325.6 | ||||||||||
In October 2020, we entered into a non-cancellable synthetic lease to consolidate, as well as expand, our distribution footprint in the mid-Atlantic region. We began to utilize this facility in September 2022. The five-year lease term will expire in November 2027. As of November 30, 2025, the total ROU asset associated with this facility was $34.5 million with a related lease obligation of $35.6 million, of which $17.5 million was included in the other accrued liabilities and $18.1 million was included in other long-term liabilities. As of November 30, 2024, the total ROU asset associated with this building was $50.6 million with a related lease obligation of $52.5 million, of which $16.9 million was included in other accrued liabilities and $35.6 million was included in other long-term liabilities. Rental payments include both a fixed and a variable component. The variable component is based on SOFR plus a margin, based on our credit rating. During the years ended November 30, 2025, 2024, and 2023, we recognized $25.1 million, $28.8 million, and $27.9 million, respectively, of rent expense related to the leased asset. The lease
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contains options to negotiate a renewal of the lease or to purchase or request the lessor to sell the facility at the end of the lease term. The lease arrangement contains a residual value guarantee of 76.5% of the lessor’s total construction cost, which approximated $310 million. We do not believe it is probable that any material amounts will be owed under these guarantees. Therefore, no amounts related to the residual value guarantees are included in the lease payments used to measure the right-of-use assets and lease liabilities. The lease also contains covenants that are consistent with our revolving credit facility, as disclosed in Note 5.
Our Corporate functions, Americas' leadership, and U.S. staff operate out of our Hunt Valley, Maryland headquarters office building. The 15-year lease for that building began in April 2019 and is recognized as a finance lease. During each of the years ended November 30, 2025, 2024, and 2023, we recognized amortization expense of $8.7 million related to the leased asset. As of November 30, 2025, the total lease obligation associated with this building was $92.4 million, of which $9.0 million was included in the current portion of long-term debt and $83.4 million was included in long-term debt. As of November 30, 2024, the total lease obligation was $100.9 million, of which $8.5 million was included in the current portion of long-term debt and $92.4 million was included in long-term debt.
Information regarding our lease terms and discount rates as of November 30 were as follows:
The future maturity of our lease liabilities as of November 30, 2025 were as follows (in millions):
| Operating leases | Finance leases | Total | |||||||||||||||
| 2026 | 66.7 | 12.0 | 78.7 | ||||||||||||||
| 2027 | 62.7 | 12.2 | 74.9 | ||||||||||||||
| 2028 | 31.5 | 12.5 | 44.0 | ||||||||||||||
| 2029 | 22.9 | 12.7 | 35.6 | ||||||||||||||
| 2030 | 18.0 | 13.0 | 31.0 | ||||||||||||||
| Thereafter | 52.6 | 56.2 | 108.8 | ||||||||||||||
| Total lease payments | 254.4 | 118.6 | 373.0 | ||||||||||||||
| Less: Imputed interest | 27.8 | 23.6 | 51.4 | ||||||||||||||
| Total lease liabilities | $ | 226.6 | $ | 95.0 | $ | 321.6 | |||||||||||
Supplemental cash flow and other information related to leases for the years ended November 30 were as follows (in millions):
| 2025 | 2024 | 2023 | |||||||||
| Cash paid for amounts included in the measurements of lease liabilities: | |||||||||||
| Operating cash flows used for operating leases | $ | 68.3 | $ | 66.8 | $ | 64.5 | |||||
| Operating cash flows used for finance leases | 3.4 | 3.7 | 3.9 | ||||||||
| Financing cash flows used for finance leases | 8.4 | 8.0 | 7.6 | ||||||||
| ROU assets obtained in exchange for lease liabilities | |||||||||||
| Operating leases | $ | 60.0 | $ | 47.6 | $ | 52.1 | |||||
7. FINANCIAL INSTRUMENTS
We use derivative financial instruments to enhance our ability to manage risk, including foreign currency and interest rate exposures, which exist as part of our ongoing business operations. We do not enter into contracts for trading purposes, nor are we a party to any leveraged derivative instrument and all derivatives are designated as hedges. We are not a party to master netting arrangements, and we do not offset the fair value of derivative
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contracts with the same counterparty in our financial statement disclosures. The use of derivative financial instruments is monitored through regular communication with senior management and the use of written guidelines.
Foreign Currency
We are potentially exposed to foreign currency fluctuations affecting net investments in subsidiaries, transactions (both third-party and intercompany) and earnings denominated in foreign currencies. Management assesses foreign currency risk based on transactional cash flows and translational volatility and may enter into forward contract and currency swaps with highly-rated financial institutions to reduce fluctuations in the long or short currency positions. Forward contracts are generally less than 18 months duration. Currency swap agreements are established in conjunction with the terms of the underlying debt issues.
The following is a summary of the notional amounts of outstanding foreign currency exchange contracts as of November 30, 2025 and 2024:
| (millions) | 2025 | 2024 | ||||||
| Fair value hedges | $ | 877.3 | $ | 818.1 | ||||
| Cash flow hedges | 140.9 | 216.1 | ||||||
| Total | $ | 1,018.2 | $ | 1,034.2 | ||||
All of these contracts were designated as hedges of anticipated purchases denominated in a foreign currency or hedges of foreign currency denominated assets or liabilities. Hedge ineffectiveness was not material. All foreign currency exchange contracts outstanding at November 30, 2025 have durations of less than 12 months, including $250.2 million of notional contracts that have durations of less than one month and are used to hedge short-term cash flow funding.
Contracts which are designated as hedges of foreign currency denominated assets are considered fair value hedges. These foreign currency exchange contracts manage both exposure to currency fluctuations in certain intercompany loans between subsidiaries as well as currency exposure to third-party non-functional currency assets or liabilities. Gains and losses from contracts that are designated as hedges of assets, liabilities or firm commitments are recognized through income, offsetting the change in fair value of the hedged item. Contracts which are designated as hedges of anticipated purchases denominated in a foreign currency (generally purchases of raw materials in U.S. dollars by operating units outside the U.S.) are considered cash flow hedges. The gains and losses on these contracts are deferred in accumulated other comprehensive income until the hedged item is recognized in cost of goods sold, at which time the net amount deferred in accumulated other comprehensive income is also recognized in cost of goods sold.
We also utilize cross currency interest rate swap contracts that are designated as net investment hedges. Any gains or losses on net investment hedges are included in foreign currency translation adjustments in accumulated other comprehensive loss. Net interest accruals excluded from the assessment of hedge effectiveness are included in earnings as interest expense.
As of November 30, 2025 and 2024, we had cross currency interest rate swap contracts of (i) $250 million notional value to receive $250 million at USD SOFR plus 0.907% and pay £194.1 million at three-month GBP SONIA plus 0.859% and (ii) £194.1 million notional value to receive £194.1 million at three-month GBP SONIA plus 0.859% and pay €221.8 million at three-month Euro EURIBOR plus 0.808%. These cross-currency interest rate swap contracts expire in August 2027. In conjunction with the phase-out of LIBOR, during 2023 we amended the terms of this cross currency swap such that, effective February 15, 2023, we pay and receive at USD SOFR plus 0.907% (previously USD LIBOR plus 0.685%).
As of November 30, 2025 and 2024, we also had cross currency interest rate swap contracts of $250 million notional value to receive $250 million at USD SOFR plus 0.684% and pay £184.1 million at GBP SONIA plus 0.574% and (ii) £184.1 million notional value to receive £184.1 million at GBP SONIA plus 0.574% and pay €219.2 million at Euro ESTR plus 0.667%, both of which expire in April 2030.
Interest Rates
We finance a portion of our operations with both fixed and variable rate debt instruments, primarily commercial paper, notes and bank loans. We utilize interest rate swap agreements to minimize worldwide financing costs and to achieve a desired mix of variable and fixed rate debt.
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The following is a summary of our outstanding interest rate swaps as of November 30, 2025 and 2024 ($ amounts in millions).
(1)In 2023, we amended our $100 million interest rate swaps which expired in November 2025 such that, effective February 15, 2023, we paid and received at USD SOFR plus 1.487% (previously U.S. three-month LIBOR plus 1.22%).
(2)In 2023, we amended our $250 million interest rate swaps which expire in August 2027 such that, effective February 15, 2023, we paid and received at USD SOFR plus 0.907% (previously U.S. three-month LIBOR plus 0.685%).
Any unrealized gain or loss on these swaps was offset by a corresponding increase or decrease in the value of the hedged debt. Hedge ineffectiveness was not material.
The following tables disclose the notional amount and fair values of derivative instruments on our consolidated balance sheet:
As of November 30, 2025: | ||||||||||||||||||||
| (millions) | Asset Derivatives | Liability Derivatives | ||||||||||||||||||
| Derivatives | Balance sheet location | Notional amount | Fair value | Balance sheet location | Notional amount | Fair value | ||||||||||||||
| Interest rate contracts | Other current assets/Other long-term assets | $ | — | $ | — | Other accrued liabilities/Other long-term liabilities | $ | 500.0 | $ | 20.8 | ||||||||||
| Foreign exchange contracts | Other current assets | 894.6 | 6.5 | Other accrued liabilities | 123.6 | 0.7 | ||||||||||||||
| Cross currency contracts | Other current assets/Other long-term assets | 500.8 | 8.5 | Other accrued liabilities/Other long-term liabilities | 511.1 | 18.1 | ||||||||||||||
| Total | $ | 15.0 | $ | 39.6 | ||||||||||||||||
As of November 30, 2024: | ||||||||||||||||||||
| (millions) | Asset Derivatives | Liability Derivatives | ||||||||||||||||||
| Derivatives | Balance sheet location | Notional amount | Fair value | Balance sheet location | Notional amount | Fair value | ||||||||||||||
| Interest rate contracts | Other current assets/Other long-term assets | $ | — | $ | — | Other accrued liabilities/Other long-term liabilities | $ | 600.0 | $ | 37.9 | ||||||||||
| Foreign exchange contracts | Other current assets | 374.4 | 5.2 | Other accrued liabilities | 659.8 | 12.5 | ||||||||||||||
| Cross currency contracts | Other current assets/Other long-term assets | 945.5 | 36.8 | Other accrued liabilities/Other long-term liabilities | — | — | ||||||||||||||
| Total | $ | 42.0 | $ | 50.4 | ||||||||||||||||
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The following tables disclose the impact of derivative instruments on our consolidated income statement, other comprehensive income (OCI), and accumulated other comprehensive income (AOCI) for the years ended November 30, 2025, 2024, and 2023:
| Fair value hedges (millions) | ||||||||||||||
| Income statement location | Expense | |||||||||||||
| Derivative | 2025 | 2024 | 2023 | |||||||||||
| Interest rate contracts | Interest expense | $ | (14.1) | $ | (19.7) | $ | (17.7) | |||||||
| Income statement location | Loss recognized in income | Income statement location | Gain recognized in income | ||||||||||||||||||||||||||
| Derivative | 2025 | 2024 | 2023 | Hedged Item | 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Foreign exchange contracts | Other income, net | $ | (8.6) | $ | (9.0) | $ | (16.2) | Intercompany loans | Other income, net | $ | 7.6 | $ | 4.0 | $ | 15.6 | ||||||||||||||
| Cash flow hedges (millions) | |||||||||||||||||||||||
| Loss recognized in OCI | Income statement location | Gain (loss) reclassified from AOCI | |||||||||||||||||||||
| Derivative | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |||||||||||||||||
| Interest rate contracts | $ | — | $ | — | $ | (2.6) | Interest expense, Other income, net | $ | (0.6) | $ | (0.6) | $ | 0.1 | ||||||||||
| Foreign exchange contracts | — | (0.1) | (0.7) | Cost of goods sold | (0.6) | 1.6 | 0.2 | ||||||||||||||||
| Total | $ | — | $ | (0.1) | $ | (3.3) | $ | (1.2) | $ | 1.0 | $ | 0.3 | |||||||||||
The amount of gain or loss recognized in income on the ineffective portion of derivative instruments is not material. For all cash flow and settled interest rate fair value hedge derivatives, the net amount of accumulated other comprehensive income expected to be reclassified into income related to these contracts in the next twelve months is a $0.7 million increase to earnings.
For all net investment hedges, no amounts have been reclassified out of other comprehensive income (loss). The amounts noted in the tables above for OCI do not include any adjustments for the impact of deferred income taxes.
Concentrations of Credit Risk
We are potentially exposed to concentrations of credit risk with trade accounts receivable and financial instruments. The customers of our Consumer segment are predominantly food retailers and food wholesalers. Consolidations in these industries have created larger customers. In addition, competition has increased with the growth in alternative channels including mass merchandisers, dollar stores, warehouse clubs, discount chains and e-commerce. This has caused some customers to be less profitable and increased our exposure to credit risk. We generally have a large and diverse customer base which limits our concentration of credit risk. At November 30, 2025, we did not have amounts due from any single customer that exceed 10% of consolidated trade accounts receivable. Credit markets are volatile and some of our customers and counterparties are highly leveraged. We continue to closely monitor the credit worthiness of our customers and counterparties and generally do not require collateral. We believe that the allowance for doubtful accounts properly recognized trade receivables at realizable value. We consider nonperformance credit risk for other financial instruments to be insignificant.
8. FAIR VALUE MEASUREMENTS
Fair value can be measured using valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). Accounting standards utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
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•Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
•Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
•Level 3: Unobservable inputs that reflect management’s own assumptions.
Our population of assets and liabilities subject to fair value measurements on a recurring basis are as follows:
Fair value measurements using fair value hierarchy as of November 30, 2025 | |||||||||||
| (millions) | Fair value | Level 1 | Level 2 | ||||||||
| Assets: | |||||||||||
| Cash and cash equivalents | $ | 95.9 | $ | 95.9 | $ | — | |||||
| Insurance contracts | 131.0 | — | 131.0 | ||||||||
| Bonds and money market fund | 1.9 | 1.9 | — | ||||||||
| Foreign currency derivatives | 6.5 | — | 6.5 | ||||||||
| Cross currency contracts | 8.5 | — | 8.5 | ||||||||
| Total | $ | 243.8 | $ | 97.8 | $ | 146.0 | |||||
| Liabilities: | |||||||||||
| Interest rate derivatives | $ | 20.8 | $ | — | $ | 20.8 | |||||
| Foreign currency derivatives | 0.7 | — | 0.7 | ||||||||
| Cross currency contracts | 18.1 | — | 18.1 | ||||||||
| Total | $ | 39.6 | $ | — | $ | 39.6 | |||||
Fair value measurements using fair value hierarchy as of November 30, 2024 | |||||||||||
| (millions) | Fair value | Level 1 | Level 2 | ||||||||
| Assets: | |||||||||||
| Cash and cash equivalents | $ | 186.1 | $ | 186.1 | $ | — | |||||
| Insurance contracts | 129.2 | — | 129.2 | ||||||||
| Bonds and money market fund | 1.3 | 1.3 | — | ||||||||
| Foreign currency derivatives | 5.2 | — | 5.2 | ||||||||
| Cross currency contracts | 36.8 | — | 36.8 | ||||||||
| Total | $ | 358.6 | $ | 187.4 | $ | 171.2 | |||||
| Liabilities: | |||||||||||
| Interest rate derivatives | $ | 37.9 | $ | — | $ | 37.9 | |||||
| Foreign currency derivatives | 12.5 | — | 12.5 | ||||||||
| Total | $ | 50.4 | $ | — | $ | 50.4 | |||||
At November 30, 2025 and 2024, we had no financial assets or liabilities that were subject to a level 3 fair value measurement.
At November 30, 2025 and 2024, the carrying amount of interest rate derivatives, foreign currency derivatives, cross currency contracts, insurance contracts, and bonds and money market fund investments are equal to their respective fair values. Because of their short-term nature, the amounts reported in the balance sheet for cash and cash equivalents, receivables, short-term borrowings, and trade accounts payable approximate fair value. Investments in affiliates are not readily marketable, and it is not practicable to estimate their fair value.
Insurance contracts, bonds, and money market fund investments are comprised of fixed income and equity securities held for certain non-qualified U.S. employee benefit plans and are stated at fair value on the balance sheet. The fair values of insurance contracts and bonds and money market fund investments are based upon the underlying values of the securities in which they are invested and are from quoted market prices from various stock and bond exchanges for similar type assets. The fair values for interest rate derivatives, foreign currency derivatives, and cross currency contracts are based on values for similar instruments using models with market-based inputs.
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The carrying amount and fair value of long-term debt, including the current portion, as of November 30 were as follows:
| (millions) | 2025 | 2024 | ||||||||||||
| Carrying amount | Fair value | Carrying amount | Fair value | |||||||||||
| Long-term debt (including current portion) | $ | 3,614.9 | $ | 3,505.9 | $ | 3,858.8 | $ | 3,677.1 | ||||||
| Level 1 valuation techniques | 3,401.1 | 3,557.3 | ||||||||||||
| Level 2 valuation techniques | 104.8 | 119.8 | ||||||||||||
The fair value for Level 2 long-term debt is determined by using quoted prices for similar debt instruments.
9. ACCUMULATED OTHER COMPREHENSIVE LOSS
The following table sets forth the components of accumulated other comprehensive loss, net of tax where applicable, as of November 30 (in millions):
| 2025 | 2024 | |||||||
| Accumulated other comprehensive loss, net of tax where applicable | ||||||||
Foreign currency translation adjustment (1) | $ | (269.9) | $ | (392.0) | ||||
| Unrealized net (loss) gain on foreign currency exchange contracts | (3.2) | 2.1 | ||||||
| Unamortized value of settled interest rate swaps | (1.1) | (1.6) | ||||||
| Pension and other postretirement costs | (88.9) | (99.7) | ||||||
| $ | (363.1) | $ | (491.2) | |||||
(1)During the year ended November 30, 2025, the foreign currency translation adjustment of accumulated other comprehensive loss decreased on a net basis by $122.1 million, inclusive of $46.6 million of unrealized losses associated with net investment hedges. During the year ended November 30, 2024, the foreign currency translation adjustment of accumulated other comprehensive loss increased on a net basis by $86.3 million, inclusive of $19.5 million of unrealized gains associated with net investment hedges. These net investment hedges are more fully described in Note 7.
The following table sets forth the amounts reclassified from accumulated other comprehensive income (loss) and into consolidated net income for the years ended November 30:
(1) This accumulated other comprehensive income (loss) component is included in the computation of total pension expense and total other postretirement expense (refer to Note 10 for additional details).
10. EMPLOYEE BENEFIT AND RETIREMENT PLANS
We sponsor defined benefit pension plans in the U.S. and certain foreign locations. Additionally, we sponsor defined contribution plans in the U.S. and contribute to defined contribution plans in various locations outside the U.S., including government-sponsored retirement plans. We also provide postretirement medical and life insurance benefits to certain U.S. employees and retirees. We previously froze the accrual of future benefits under certain defined benefit pension plans in the U.S. and certain foreign locations. Although our defined benefit plans in the U.S., United Kingdom, and Canada have generally been frozen, employees who are participants in the plans retained benefits accumulated up to the date of the freeze, based on credited service and eligible earnings, in accordance with the terms of the plans.
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Included in our consolidated balance sheet as of November 30, 2025 on the line entitled "Accumulated other comprehensive loss" was $111.6 million ($88.9 million net of tax) related to net unrecognized actuarial losses that have not yet been recognized in net periodic pension or postretirement benefit cost.
Defined Benefit Pension Plans
The significant assumptions used to determine benefit obligations are as follows as of November 30:
| United States | International | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| Discount rate—funded plans | 5.5 | % | 5.3 | % | 5.1 | % | 4.7 | % | ||||||
| Discount rate—unfunded plan | 5.4 | % | 5.3 | % | — | % | — | % | ||||||
| Salary scale | — | % | — | % | 2.9 | % | 2.9 | % | ||||||
The significant assumptions used to determine pension expense for the years ended November 30 are as follows:
| United States | International | |||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |||||||||||||||
| Discount rate—funded plans | 5.3 | % | 6.0 | % | 5.4 | % | 4.7 | % | 5.1 | % | 4.5 | % | ||||||||
| Discount rate—unfunded plan | 5.3 | % | 6.0 | % | 5.4 | % | — | % | — | % | — | % | ||||||||
| Salary scale | — | % | — | % | — | % | 2.9 | % | 2.9 | % | 2.9 | % | ||||||||
| Expected return on plan assets | 5.8 | % | 6.3 | % | 6.8 | % | 4.7 | % | 5.2 | % | 4.9 | % | ||||||||
Annually, we undertake a process, with the assistance of our external investment consultants, to evaluate the appropriate projected rates of return to use for our pension plans’ assumptions. We engage our investment consultants' research teams to develop capital market assumptions for each asset category in our plans to project investment returns into the future. The specific methods used to develop expected return assumptions vary by asset category. We adjust the outcomes for the fact that plan assets are invested with actively managed funds and subject to tactical asset reallocation.
Our pension expense (income) for the years ended November 30 was as follows:
| United States | International | |||||||||||||||||||
| (millions) | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||
| Service cost | $ | 1.6 | $ | 1.5 | $ | 2.0 | $ | 0.7 | $ | 0.6 | $ | 0.6 | ||||||||
| Interest costs | 35.5 | 37.3 | 36.1 | 10.2 | 10.6 | 9.9 | ||||||||||||||
| Expected return on plan assets | (37.2) | (39.6) | (42.3) | (14.3) | (16.1) | (15.1) | ||||||||||||||
| Amortization of prior service costs | 0.5 | 0.5 | 0.5 | 0.1 | 0.1 | 0.1 | ||||||||||||||
| Amortization of net actuarial loss (gain) | 1.1 | (0.4) | 0.2 | (0.1) | (0.3) | (0.1) | ||||||||||||||
| Total pension expense (income) | $ | 1.5 | $ | (0.7) | $ | (3.5) | $ | (3.4) | $ | (5.1) | $ | (4.6) | ||||||||
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A roll forward of the benefit obligation, fair value of plan assets and a reconciliation of the pension plans’ funded status as of November 30, the measurement date, follows:
| United States | International | |||||||||||||
| (millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||
| Change in benefit obligation: | ||||||||||||||
| Benefit obligation at beginning of year | $ | 695.0 | $ | 645.3 | $ | 216.9 | $ | 214.0 | ||||||
| Service cost | 1.6 | 1.5 | 0.7 | 0.6 | ||||||||||
| Interest costs | 35.5 | 37.3 | 10.2 | 10.6 | ||||||||||
| Actuarial (gain) loss | (12.4) | 56.3 | (9.7) | 7.8 | ||||||||||
| Benefits paid | (46.4) | (45.4) | (14.2) | (13.5) | ||||||||||
| Foreign currency impact | — | — | 7.2 | (2.6) | ||||||||||
| Benefit obligation at end of year | $ | 673.3 | $ | 695.0 | $ | 211.1 | $ | 216.9 | ||||||
| Change in fair value of plan assets: | ||||||||||||||
| Fair value of plan assets at beginning of year | $ | 670.7 | $ | 630.7 | $ | 272.4 | $ | 267.0 | ||||||
| Actual return on plan assets | 44.1 | 76.2 | 2.3 | 21.1 | ||||||||||
| Employer contributions | 8.3 | 9.2 | 0.9 | 0.8 | ||||||||||
| Benefits paid | (46.4) | (45.4) | (14.2) | (13.5) | ||||||||||
| Foreign currency impact | — | — | 8.0 | (3.0) | ||||||||||
| Fair value of plan assets at end of year | $ | 676.7 | $ | 670.7 | $ | 269.4 | $ | 272.4 | ||||||
| Funded status | $ | 3.4 | $ | (24.3) | $ | 58.3 | $ | 55.5 | ||||||
| Pension plans in which accumulated benefit obligation exceeded plan assets | ||||||||||||||
| Projected benefit obligation | $ | 72.3 | $ | 116.3 | $ | 15.2 | $ | 14.7 | ||||||
| Accumulated benefit obligation | 72.3 | 113.3 | 12.7 | 12.3 | ||||||||||
| Fair value of plan assets | — | 38.0 | 1.9 | 1.8 | ||||||||||
The accumulated benefit obligation is the present value of pension benefits (whether vested or unvested) attributed to employee service rendered before the measurement date and based on employee service and compensation prior to that date. The accumulated benefit obligation differs from the projected benefit obligation in that it includes no assumption about future compensation or service levels. The accumulated benefit obligation for the U.S. pension plans was $670.0 million and $692.0 million as of November 30, 2025 and 2024, respectively. The accumulated benefit obligation for the international pension plans was $208.6 million and $214.5 million as of November 30, 2025 and 2024, respectively.
Included in the U.S. in the preceding table is a benefit obligation of $72.3 million and $75.1 million for 2025 and 2024, respectively, related to our Supplemental Executive Retirement Plan (SERP). The assets related to this plan, which totaled $69.5 million and $73.1 million as of November 30, 2025 and 2024, respectively, are held in a rabbi trust and accordingly have not been included in the preceding table.
Amounts recorded in the balance sheet for all defined benefit pension plans as of November 30 consist of the following:
| United States | International | |||||||||||||
| (millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||
| Non-current pension asset | $ | 75.6 | $ | 54.0 | $ | 71.6 | $ | 68.4 | ||||||
| Accrued pension liability | 72.2 | 78.3 | 13.3 | 12.9 | ||||||||||
| Deferred income tax assets | 23.8 | 28.6 | 4.5 | 3.8 | ||||||||||
| Accumulated other comprehensive loss, net of tax | 68.7 | 84.8 | 33.8 | 31.1 | ||||||||||
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Our defined benefit pension plans investment strategy is subject to the asset/liability profiles of the plans in each individual country. The investment objectives of the defined benefit pension plans are to provide assets to meet the current and future obligations of the plans at a reasonable cost to us. Our goal is to optimize the long-term return on plan assets at a moderate level of risk. The investment policy specifies the type of investment vehicles appropriate for the plans, asset allocation guidelines, criteria for the selection of investment managers, procedures to monitor overall investment performance as well as investment manager performance. Higher-returning assets include mutual, co-mingled and other funds comprised of equity securities, utilizing both active and passive investment styles. These more volatile assets are balanced with less volatile assets, primarily mutual, co-mingled and other funds comprised of fixed income securities. Professional investment firms are engaged to provide advice on the selection and monitoring of investment funds, and to provide advice on the allocation of plan assets across the various fund managers. This advice is based in part on the duration of each plan’s liability.
The allocations of U.S. pension plan assets as of November 30, by asset category, were as follows:
| Actual | 2025 | ||||||||||
| Asset Category | 2025 | 2024 | Target | ||||||||
| Equity securities | 20.3 | % | 22.1 | % | 24.2 | % | |||||
| Fixed income securities | 73.1 | % | 69.9 | % | 70.6 | % | |||||
| Other | 6.6 | % | 8.0 | % | 5.2 | % | |||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | |||||
The allocations of the international pension plans’ assets as of November 30, by asset category, were as follows:
| Actual | 2025 | ||||||||||
| Asset Category | 2025 | 2024 | Target | ||||||||
| Equity securities | 6.6 | % | 7.9 | % | 6.2 | % | |||||
| Fixed income securities | 88.3 | % | 86.4 | % | 88.4 | % | |||||
| Other | 5.1 | % | 5.7 | % | 5.4 | % | |||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | |||||
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The following tables set forth by level, within the fair value hierarchy as described in Note 8, pension plan assets at their fair value as of November 30 for the United States and international plans:
| As of November 30, 2025 | United States | ||||||||||
| (millions) | Total fair value | Level 1 | Level 2 | ||||||||
| Cash and cash equivalents | $ | 4.5 | $ | 4.5 | $ | — | |||||
| Equity securities: | |||||||||||
U.S. equity securities(a) | 81.6 | — | 81.6 | ||||||||
International equity securities(b) | 48.7 | — | 48.7 | ||||||||
| Fixed income securities: | |||||||||||
U.S. government/corporate bonds(c) | 439.6 | — | 439.6 | ||||||||
High yield bonds(d) | 42.6 | — | 42.6 | ||||||||
Insurance contracts(f) | 1.2 | — | 1.2 | ||||||||
| Total | $ | 618.2 | $ | 4.5 | $ | 613.7 | |||||
Investments measured at net asset value(h) | |||||||||||
Hedge funds(i) | 18.3 | ||||||||||
Private equity funds(j) | 7.1 | ||||||||||
Private debt funds(k) | 10.9 | ||||||||||
Real estate (l) | 22.2 | ||||||||||
| Total investments | $ | 676.7 | |||||||||
| As of November 30, 2025 | International | ||||||||||
| (millions) | Total fair value | Level 1 | Level 2 | ||||||||
| Cash and cash equivalents | $ | 4.6 | $ | 4.6 | $ | — | |||||
International equity securities(b) | 17.8 | — | 17.8 | ||||||||
| Fixed income securities: | |||||||||||
International/government/corporate bonds(e) | 223.4 | — | 223.4 | ||||||||
Insurance contracts(f) | 14.5 | — | 14.5 | ||||||||
Real estate(g) | 9.1 | — | 9.1 | ||||||||
| Total investments | $ | 269.4 | $ | 4.6 | $ | 264.8 | |||||
| As of November 30, 2024 | United States | ||||||||||
| (millions) | Total fair value | Level 1 | Level 2 | ||||||||
| Cash and cash equivalents | $ | 4.4 | $ | 4.4 | $ | — | |||||
| Equity securities: | |||||||||||
U.S. equity securities(a) | 81.2 | — | 81.2 | ||||||||
International equity securities(b) | 50.3 | — | 50.3 | ||||||||
| Fixed income securities: | |||||||||||
U.S./government/ corporate bonds(c) | 417.0 | — | 417.0 | ||||||||
High yield bonds(d) | 42.9 | — | 42.9 | ||||||||
Insurance contracts(f) | 1.2 | — | 1.2 | ||||||||
| Total | $ | 597.0 | $ | 4.4 | $ | 592.6 | |||||
Investments measured at net asset value(h) | |||||||||||
Hedge funds(i) | 29.6 | ||||||||||
Private equity funds(j) | 16.8 | ||||||||||
| Private debt funds(k) | 8.0 | ||||||||||
| Real estate (l) | 19.3 | ||||||||||
| Total investments | $ | 670.7 | |||||||||
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| As of November 30, 2024 | International | ||||||||||
| (millions) | Total fair value | Level 1 | Level 2 | ||||||||
| Cash and cash equivalents | $ | 6.4 | $ | 6.4 | $ | — | |||||
International equity securities(b) | 21.6 | — | 21.6 | ||||||||
| Fixed income securities: | |||||||||||
International/government/corporate bonds(e) | 220.7 | — | 220.7 | ||||||||
Insurance contracts(f) | 14.7 | — | 14.7 | ||||||||
| Real estate (g) | 9.0 | 9.0 | |||||||||
| Total investments | $ | 272.4 | $ | 6.4 | $ | 266.0 | |||||
(a)This category comprises equity funds and collective equity trust funds that most closely track the S&P index and other equity indices.
(b)This category comprises international equity funds with varying benchmark indices.
(c)This category comprises funds consisting of U.S. government and U.S. corporate bonds and other fixed income securities. An appropriate benchmark is the Barclays Capital Aggregate Bond Index.
(d)This category comprises funds consisting of a variety of fixed income securities with varying benchmark indices.
(e)This category comprises funds consisting of international government/corporate bonds and other fixed income securities with varying benchmark indices.
(f)This category comprises insurance contracts, the majority of which have a guaranteed investment return.
(g)This category comprises funds investing in real estate investment trusts (REIT). Appropriate benchmarks are the MSCI REALPAC Canada Property Index International holding.
(h)Certain investments that are valued using the net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. These are included to permit reconciliation of the fair value hierarchy to the aggregate pension plan assets.
(i)This category comprises hedge funds investing in strategies represented in various HFRI Fund Indices. The net asset value is generally based on the valuation of the underlying investment. Limitations exist on the timing from notice by the plan of its intent to redeem and actual redemptions of these funds and generally range from a minimum of one month to several months.
(j)This category comprises private equity, venture capital and limited partnerships. The net asset is based on valuation models of the underlying securities as determined by the general partner or general partner's designee. These valuation models include unobservable inputs that cannot be corroborated using verifiable observable market data. These funds typically have redemption periods of approximately 10 years.
(k)This category comprises limited partnerships funds investing in senior loans, mezzanine and distressed debt. The net asset is based on valuation models of the underlying securities as determined by the general partner or general partner's designee. These valuation models include unobservable inputs that cannot be corroborated using verifiable observable market data. These funds typically have redemption periods of approximately 10 years.
(l)This category comprises private real estate funds. The net asset is based on valuation models of the underlying securities as determined by the general partner or general partner's designee. These valuation models include unobservable inputs that cannot be corroborated using verifiable observable market data. These funds have no redemption restrictions.
For the plans’ hedge funds, private equity funds and private debt funds, we engage an independent advisor to compare the funds’ returns to other funds with similar strategies. Each fund is required to have an annual audit by an independent accountant, which is provided to the independent advisor. This provides a basis of comparability relative to similar assets.
The U.S. pension plans previously held McCormick stock. Dividends paid on these shares were $0.8 million in 2024.
Pension benefit payments in our most significant plans are made from assets of the pension plans. It is anticipated that future benefit payments for the U.S. and international plans for the next 10 fiscal years will be as follows:
| (millions) | United States | International | ||||||
| 2026 | $ | 51.0 | $ | 13.1 | ||||
| 2027 | 51.5 | 13.0 | ||||||
| 2028 | 52.0 | 12.4 | ||||||
| 2029 | 52.6 | 13.7 | ||||||
| 2030 | 52.4 | 14.2 | ||||||
| 2031-2036 | 256.5 | 71.9 | ||||||
U.S. Defined Contribution Retirement Plans
For our U.S. qualified and non-qualified defined contribution retirement plans, we match 100% of a participant’s contribution up to the first 3% of the participant’s eligible compensation, and 66.7% of the next 3% of the participant’s salary. In addition, we make contributions of 3% of the participant's eligible compensation for all U.S. employees who are employed on December 31 of each year. Our contributions charged to expense under all U.S. defined contribution retirement plans were $34.9 million, $34.7 million and $29.7 million in 2025, 2024, and 2023, respectively.
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At the participants' election, 401(k) retirement plans held 1.8 million shares of McCormick stock, with a fair value of $122.1 million, at November 30, 2025. Dividends paid on the shares held in the 401(k) retirement plans in 2025 and 2024 were $3.5 million and $3.6 million, respectively.
Postretirement Benefits Other Than Pensions
We currently provide postretirement medical and life insurance benefits to certain U.S. employees who were covered under the active employees’ plan and retire after age 55 with at least five years of service. The subsidy provided under these plans is based primarily on age at date of retirement. These benefits are not pre-funded but paid as incurred. Employees hired after December 31, 2008 are not eligible for a company subsidy. They are eligible for coverage on an access-only basis.
Our other postretirement benefit expense for the years ended November 30 follows:
| (millions) | 2025 | 2024 | 2023 | ||||||||
| Service cost | $ | 0.8 | $ | 0.8 | $ | 1.3 | |||||
| Interest costs | 2.2 | 2.4 | 2.6 | ||||||||
| Amortization of prior service credits | (0.2) | (0.3) | (0.3) | ||||||||
| Amortization of actuarial gains | (2.6) | (2.7) | (2.2) | ||||||||
| Postretirement benefit expense | $ | 0.2 | $ | 0.2 | $ | 1.4 | |||||
Roll forwards of the benefit obligation, fair value of plan assets and a reconciliation of the plans’ funded status at November 30, the measurement date, follow:
| (millions) | 2025 | 2024 | ||||||
| Change in benefit obligation: | ||||||||
| Benefit obligation at beginning of year | $ | 45.0 | $ | 47.1 | ||||
| Service cost | 0.8 | 0.8 | ||||||
| Interest costs | 2.2 | 2.4 | ||||||
| Participant contributions | 2.6 | 2.8 | ||||||
| Actuarial gain | (0.9) | (1.1) | ||||||
| Benefits paid | (6.3) | (7.0) | ||||||
| Benefit obligation at end of year | $ | 43.4 | $ | 45.0 | ||||
| Change in fair value of plan assets: | ||||||||
Fair value of plan assets at beginning of year | $ | — | $ | — | ||||
| Employer contributions | 3.7 | 4.2 | ||||||
| Participant contributions | 2.6 | 2.8 | ||||||
| Benefits paid | (6.3) | (7.0) | ||||||
| Fair value of plan assets at end of year | $ | — | $ | — | ||||
| Other postretirement benefit liability | $ | 43.4 | $ | 45.0 | ||||
Estimated future benefit payments (net of employee contributions) for the next 10 fiscal years are as follows:
| (millions) | Retiree medical | Retiree life insurance | Total | ||||||||
| 2026 | $ | 2.7 | $ | 1.4 | $ | 4.1 | |||||
| 2027 | 2.8 | 1.3 | 4.1 | ||||||||
| 2028 | 2.7 | 1.3 | 4.0 | ||||||||
| 2029 | 2.7 | 1.3 | 4.0 | ||||||||
| 2030 | 2.7 | 1.2 | 3.9 | ||||||||
| 2031-2036 | 12.7 | 5.4 | 18.1 | ||||||||
The assumed discount rate in determining the benefit obligation was 5.1% and 5.2% for 2025 and 2024, respectively.
For 2025, the assumed annual rate of increase in the cost of covered health care benefits is 13.8% (7.6% last year). It is assumed to decrease gradually to 4.5% in the year 2034 (4.5% in 2034 last year) and remain at that level thereafter.
11. STOCK-BASED COMPENSATION
We have four types of stock-based compensation awards: restricted stock units (RSUs), stock options, and company stock awarded as part of our long-term performance plan (LTPP) and price-vested stock options. Total stock-based compensation expense for 2025, 2024, and 2023 was $46.2 million, $47.4 million and $63.4 million,
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respectively. Total unrecognized stock-based compensation expense related to our RSUs and stock options at November 30, 2025 was $26.9 million and the weighted-average period over which this will be recognized is 1.8 years. Total unrecognized stock-based compensation expense related to our LTPP is variable in nature and is dependent on the Company's execution against established performance metrics under performance cycles related to this plan. All stock-based compensation expense related to our price-vested stock options was fully recognized as of November 30, 2023. As of November 30, 2025, we have 4.6 million shares of common stock remaining available for future issuance under our stock-based compensation programs.
The following summarizes the key terms, a summary of activity, and the methods of valuation for each of our stock-based compensation awards.
RSUs
RSUs are valued at the market price of the underlying stock, discounted by foregone dividends, on the date of grant. Substantially all of the RSUs granted vest over a three-year term or, if earlier, upon the retirement eligibility
date of the holder.
A summary of our RSU activity for the years ended November 30 follows:
| (shares in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Shares | Weighted- average price | Shares | Weighted- average price | Shares | Weighted- average price | |||||||||||||||
| Beginning of year | 533 | $ | 73.68 | 494 | $ | 76.94 | 480 | $ | 77.62 | |||||||||||
| Granted | 543 | 74.56 | 282 | 72.77 | 264 | 77.53 | ||||||||||||||
| Vested | (250) | 77.11 | (214) | 79.13 | (225) | 78.16 | ||||||||||||||
| Forfeited | (55) | 74.63 | (29) | 79.73 | (25) | 85.21 | ||||||||||||||
| Outstanding—end of year | 771 | $ | 73.11 | 533 | $ | 73.68 | 494 | $ | 76.94 | |||||||||||
Stock Options (Other than Price-Vested Stock Options)
Stock options are granted with an exercise price equal to the market price of the stock on the date of grant. Substantially all of the options, with the exception of price-vested options detailed below, vest ratably over a three-year period or, if earlier, upon the retirement-eligibility dates of the holders and are exercisable over a 10-year period. Upon exercise of the option, shares are issued from our authorized and unissued shares.
The fair value of the options is estimated with a lattice option pricing model which uses the assumptions in the following table. We believe the lattice model provides an appropriate estimate of fair value of our options as it allows for a range of possible outcomes over an option term and can be adjusted for changes in certain assumptions over time. Expected volatilities are based primarily on the historical performance of our stock. We also use historical data to estimate the timing and amount of option exercises and forfeitures within the valuation model. The expected term of the options is an output of the option pricing model and estimates the period of time that options are expected to remain unexercised. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. Compensation expense is calculated based on the fair value of the options on the date of grant.
The per share weighted-average fair value for all options granted was $17.63 and $19.35 in 2024 and 2023, respectively. No stock option awards were granted during 2025. These fair values were computed using the following range of assumptions for the years ended November 30:
| 2024 | 2023 | |||||||
| Risk-free interest rates | 4.1% - 5.5% | 3.5% - 4.9% | ||||||
| Dividend yield | 2.3 | % | 1.9 | % | ||||
| Expected volatility | 22.8 | % | 21.8 | % | ||||
| Expected lives | 7.1 years | 7.3 years | ||||||
Under our stock option plans, we may issue shares on a net basis at the request of the option holder. This occurs by netting the option cost in shares from the shares exercised.
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A summary of our stock option activity for the years ended November 30 follows:
| (shares in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Shares | Weighted- average exercise price | Shares | Weighted- average exercise price | Shares | Weighted- average exercise price | |||||||||||||||
| Beginning of year | 6.1 | $ | 72.25 | 5.3 | $ | 70.43 | 4.8 | $ | 67.08 | |||||||||||
| Granted | — | — | 1.2 | 72.88 | 0.9 | 81.79 | ||||||||||||||
| Exercised | (0.4) | 50.28 | (0.3) | 45.69 | (0.3) | 47.86 | ||||||||||||||
| Forfeited | (0.2) | 72.11 | (0.1) | 84.00 | (0.1) | 87.11 | ||||||||||||||
| Outstanding—end of year | 5.5 | 73.92 | 6.1 | 72.25 | 5.3 | 70.43 | ||||||||||||||
| Exercisable—end of year | 4.7 | $ | 73.54 | 4.4 | $ | 69.91 | 4.0 | $ | 64.74 | |||||||||||
As of November 30, 2025, the intrinsic value (the difference between the exercise price and the market price) for options currently outstanding was $21.5 million and for options exercisable was $21.3 million. At November 30, 2025 the differences between options outstanding and options expected to vest and their related weighted-average exercise prices, aggregate intrinsic values, and weighted-average remaining lives were not material. The total intrinsic value of all options exercised during the years ended November 30, 2025, 2024, and 2023 was $11.0 million, $10.7 million, and $11.3 million, respectively.
A summary of our stock options outstanding and exercisable at November 30, 2025 follows:
| (shares in millions) | Options outstanding | Options exercisable | ||||||||||||||||||
| Range of exercise price | Shares | Weighted- average remaining life (yrs.) | Weighted- average exercise price | Shares | Weighted- average remaining life (yrs.) | Weighted- average exercise price | ||||||||||||||
$48.00 - $65.00 | 1.2 | 1.4 | $ | 50.50 | 1.2 | 1.4 | $ | 50.50 | ||||||||||||
$65.01 - $82.00 | 2.9 | 6.4 | 74.82 | 2.1 | 5.7 | 74.31 | ||||||||||||||
$82.01 - $99.00 | 1.4 | 5.2 | 92.81 | 1.4 | 5.2 | 92.81 | ||||||||||||||
| 5.5 | 5.0 | $ | 73.92 | 4.7 | 4.4 | $ | 73.54 | |||||||||||||
LTPP
LTPP awards granted in 2025, 2024, and 2023 will be delivered in company stock, with the award attainment calculated as a percentage of target based on a combination of a performance-based component and a market-based total shareholder return. These awards are valued based on the fair value of the underlying stock and the estimated fair value associated with the total shareholder return on the date of grant.
A summary of the LTPP award activity for the years ended November 30 follows:
| (shares in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Shares | Weighted- average price | Shares | Weighted- average price | Shares | Weighted- average price | |||||||||||||||
| Beginning of year | 539 | $ | 83.45 | 474 | $ | 94.34 | 451 | $ | 106.32 | |||||||||||
| Granted | 177 | 86.92 | 192 | 66.49 | 167 | 89.00 | ||||||||||||||
| Vested | (206) | 95.00 | (181) | 98.30 | (176) | 86.14 | ||||||||||||||
| Performance adjustment | 53 | 89.00 | 73 | 95.00 | 61 | 98.30 | ||||||||||||||
| Forfeited | (40) | 80.03 | (19) | 84.71 | (29) | 92.31 | ||||||||||||||
| Outstanding—end of year | 523 | $ | 80.88 | 539 | $ | 83.45 | 474 | $ | 94.34 | |||||||||||
Price-Vested Stock Options
In November 2020, we granted approximately 2,482,000 price-vested stock options to certain employees. The price-vested stock options were granted with an exercise price of $93.49 which was equal to the market price of our stock on the date of grant. The price-vested options were not exercisable until a three year service condition was achieved, and were exercisable after that time period only if the average closing price of our stock price was equal to or exceeded thresholds of 60%, 80% or 100% appreciation from the exercise price for 30 consecutive trading days within a five-year period from the date of grant. 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.
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The following is a summary of our Price-Vested Stock Options activity for the years ended November 30:
| (shares in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Number of Shares | Weighted- Average Grant-Date Fair Value | Number of Shares | Weighted- Average Grant-Date Fair Value | Number of Shares | Weighted- Average Grant-Date Fair Value | |||||||||||||||
| Beginning of year | 2,055 | $ | 9.40 | 2,055 | $ | 9.40 | 2,107 | $ | 9.40 | |||||||||||
| Forfeited | (2,055) | 9.40 | — | — | (52) | 9.40 | ||||||||||||||
| Outstanding—end of year | — | $ | — | 2,055 | $ | 9.40 | 2,055 | $ | 9.40 | |||||||||||
12. INCOME TAXES
The provision for income taxes for the years ended November 30 consists of the following:
| (millions) | 2025 | 2024 | 2023 | ||||||||
| Income taxes | |||||||||||
| Current | |||||||||||
| Federal | $ | 76.6 | $ | 103.0 | $ | 82.4 | |||||
| State | 17.0 | 16.6 | 15.1 | ||||||||
| International | 108.7 | 94.7 | 82.4 | ||||||||
| 202.3 | 214.3 | 179.9 | |||||||||
| Deferred | |||||||||||
| Federal | 2.6 | (15.2) | (2.2) | ||||||||
| State | (9.6) | (6.3) | 2.7 | ||||||||
| International | 0.5 | (8.8) | (5.9) | ||||||||
| (6.5) | (30.3) | (5.4) | |||||||||
| Total income tax expense | $ | 195.8 | $ | 184.0 | $ | 174.5 | |||||
The components of income from consolidated operations before income taxes for the years ended November 30 follow:
| (millions) | 2025 | 2024 | 2023 | ||||||||
| Pretax income | |||||||||||
| United States | $ | 620.4 | $ | 634.8 | $ | 569.6 | |||||
| International | 292.6 | 263.5 | 229.1 | ||||||||
| $ | 913.0 | $ | 898.3 | $ | 798.7 | ||||||
A reconciliation of the U.S. federal statutory rate with the effective tax rate for the years ended November 30 follows:
| 2025 | 2024 | 2023 | |||||||||
| Federal statutory tax rate | 21.0 | % | 21.0 | % | 21.0 | % | |||||
| State income taxes, net of federal benefits | 0.7 | 0.9 | 1.9 | ||||||||
| International tax at different effective rates | 0.7 | 0.6 | 0.3 | ||||||||
| U.S. tax on remitted and unremitted earnings | 2.1 | 1.8 | 0.9 | ||||||||
| Changes in prior year tax contingencies | (1.1) | (1.4) | (0.8) | ||||||||
| Legal entity reorganization | — | (2.3) | — | ||||||||
| Valuation allowances | — | 0.7 | (0.4) | ||||||||
| U.S. research credits | (1.4) | (1.3) | (1.5) | ||||||||
| Other, net | (0.6) | 0.5 | 0.4 | ||||||||
| Total | 21.4 | % | 20.5 | % | 21.8 | % | |||||
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Deferred tax assets and liabilities are comprised of the following as of November 30:
| (millions) | 2025 | 2024 | ||||||
| Deferred tax assets | ||||||||
| Employee benefit liabilities | $ | 39.4 | $ | 48.9 | ||||
| Other accrued liabilities | 37.9 | 36.0 | ||||||
| Inventory | 17.9 | 18.3 | ||||||
| Tax loss and credit carryforwards | 76.4 | 69.0 | ||||||
| Lease liabilities | 10.9 | 10.6 | ||||||
| Research expenditures | 86.3 | 64.0 | ||||||
| Other | 27.8 | 28.0 | ||||||
| Valuation allowance | (41.1) | (33.5) | ||||||
| 255.5 | 241.3 | |||||||
| Deferred tax liabilities | ||||||||
| Depreciation | 107.7 | 96.8 | ||||||
| Intangible assets | 852.1 | 849.5 | ||||||
| Lease ROU assets | 20.0 | 16.1 | ||||||
| Other | 12.6 | 19.7 | ||||||
| 992.4 | 982.1 | |||||||
| Net deferred tax liability | $ | (736.9) | $ | (740.8) | ||||
At November 30, 2025, we have tax loss carryforwards of $166.5 million. Of these carryforwards, $4.9 million expire in 2026, $13.8 million from 2027 through 2028, $35.5 million from 2029 through 2042, and $112.3 million may be carried forward indefinitely. At November 30, 2025, we also have U.S. foreign tax credit carryforwards of $32.5 million. Of these carryforwards, $6.4 million expires in 2030, $8.1 million from 2031 through 2032, and $18.0 million from 2033 through 2035.
A valuation allowance has been provided to cover deferred tax assets that are not more likely than not realizable. The net increase of $7.6 million in the valuation allowance from November 30, 2024 to November 30, 2025 resulted primarily from the net increase of valuation allowances for net operating losses and other tax attributes in the U.S. and certain non-U.S. jurisdictions.
Income taxes are not provided for unremitted earnings of our non-U.S. subsidiaries and joint ventures where our intention is to reinvest those earnings indefinitely. As of November 30, 2025, we have $1.7 billion of earnings that are considered indefinitely reinvested. We have not provided any deferred taxes with respect to items such as foreign withholding taxes, other income taxes, or foreign exchange gain or loss with respect to those earnings. It is not practicable for us to determine the amount of unrecognized tax expense on these reinvested international earnings.
The following table summarizes the activity related to our gross unrecognized tax benefits for the years ended November 30:
| (millions) | 2025 | 2024 | 2023 | ||||||||
| Balance at beginning of year | $ | 17.8 | $ | 24.0 | $ | 25.1 | |||||
| Additions for current year tax positions | 2.9 | 4.4 | 3.9 | ||||||||
| Additions for prior year tax positions | 0.1 | — | 1.3 | ||||||||
| Reductions of prior year tax positions | (4.0) | — | (3.6) | ||||||||
| Statute expirations | (4.6) | (10.5) | (1.3) | ||||||||
| Settlements | — | — | (1.3) | ||||||||
| Foreign currency translation | 0.1 | (0.1) | (0.1) | ||||||||
| Balance at November 30 | $ | 12.3 | $ | 17.8 | $ | 24.0 | |||||
As of November 30, 2025, 2024, and 2023, if recognized, $12.3 million, $17.8 million, and $24.0 million, respectively, of the unrecognized tax benefits would affect the effective rate.
We record interest and penalties on income taxes in income tax expense. We recognized interest and penalty expense (benefit) of $(0.8) million, $(0.9) million, and $(0.5) million in 2025, 2024, and 2023, respectively. As of November 30, 2025 and 2024, we had accrued $2.1 million and $2.9 million, respectively, of interest and penalties related to unrecognized tax benefits.
Tax settlements or statute of limitation expirations could result in a change to our uncertain tax positions. We believe that the reasonably possible total amount of unrecognized tax benefits as of November 30, 2025 that could
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decrease in the next 12 months as a result of various statute expirations, audit closures and/or tax settlements would not be material.
We file income tax returns in the U.S. federal jurisdiction and various state and non-U.S. jurisdictions. The open years subject to tax audits vary depending on the tax jurisdictions. In the U.S federal jurisdiction, we are no longer subject to income tax audits by taxing authorities for years before 2022. In other major jurisdictions, we are no longer subject to income tax audits by taxing authorities for years before 2014.
We are under normal recurring tax audits in the U.S. and in several jurisdictions outside the U.S. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe that our reserves for uncertain tax positions are adequate to cover existing risks and exposures.
13. CAPITAL STOCK AND EARNINGS PER SHARE
We have 640,000,000 authorized shares of each class of common stock with an established the par value for each class of common stock at $0.01 per share. The par value and additional paid in capital associated with each class of common stock is recorded in Common stock and Common stock non-voting in our consolidated balance sheet.
Holders of Common Stock have full voting rights except that (1) the voting rights of persons who are deemed to own beneficially 10% or more of the outstanding shares of Common Stock are limited to 10% of the votes entitled to be cast by all holders of shares of Common Stock regardless of how many shares in excess of 10% are held by such person; (2) we have the right to redeem any or all shares of Common Stock owned by such person unless such person acquires more than 90% of the outstanding shares of each class of our common stock; and (3) at such time as such person controls more than 50% of the votes entitled to be cast by the holders of outstanding shares of Common Stock, automatically, on a share-for-share basis, all shares of Common Stock Non-Voting will convert into shares of Common Stock.
Holders of Common Stock Non-Voting will vote as a separate class on all matters on which they are entitled to vote. Holders of Common Stock Non-Voting are entitled to vote on reverse mergers and statutory share exchanges where our capital stock is converted into other securities or property, dissolution of the Company and the sale of substantially all of our assets, as well as forward mergers and consolidation of the Company or any amendment to our charter repealing the right of the Common Stock Non-Voting to vote on any such matters.
The reconciliation of shares outstanding used in the calculation of basic and diluted earnings per share for the years ended November 30 follows:
| (millions) | 2025 | 2024 | 2023 | ||||||||
| Average shares outstanding—basic | 268.5 | 268.5 | 268.4 | ||||||||
| Effect of dilutive securities: | |||||||||||
| Stock options/RSUs/LTPP | 0.9 | 1.1 | 1.4 | ||||||||
| Average shares outstanding—diluted | 269.4 | 269.6 | 269.8 | ||||||||
The following table sets forth the stock options and RSUs for the years ended November 30 which were not considered in our earnings per share calculation since they were antidilutive:
| (millions) | 2025 | 2024 | 2023 | ||||||||
| Antidilutive securities | 3.5 | 3.4 | 2.2 | ||||||||
14. COMMITMENTS AND CONTINGENCIES
During the normal course of our business, we are involved with various claims and litigation. Reserves are established in connection with such matters when a loss is probable and the amount of such loss can be reasonably estimated. At November 30, 2025 and 2024, no material reserves were recorded. The determination of probability and the estimation of the actual amount of any such loss are inherently unpredictable, and it is therefore possible that the eventual outcome of such claims and litigation could exceed the estimated reserves, if any. However, we do not expect the outcome of the matters currently pending will have a material adverse effect on our financial statements.
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15. BUSINESS SEGMENTS AND GEOGRAPHIC AREAS
Business Segments
We operate in two business segments: Consumer and Flavor Solutions. The Consumer and Flavor Solutions segments manufacture, market and distribute herbs, spices, seasoning mixes, condiments and other flavorful products throughout the world. Our Consumer segment sells to retail channels, including grocery, mass merchandise, warehouse clubs, discount and drug stores, and e-commerce under the “McCormick” brand and a variety of brands around the world, including “French's,” “Frank's RedHot,” “Lawry’s,” “Zatarain’s,” “Simply Asia,” “Thai Kitchen,” “Ducros,” “Vahiné,” "Cholula," “Schwartz,” “Club House,” “Kamis,” "DaQiao," "La Drogheria," "Stubb's," "OLD BAY," and "Gourmet Garden." Our Flavor Solutions segment sells to food manufacturers and the foodservice industry both directly and indirectly through distributors, with the exception of our businesses in China where foodservice sales are managed by and reported in our Consumer segment.
Our CODM is our Chairman, President & Chief Executive Officer. Our CODM uses operating income excluding special charges and transaction and integration expenses related to our acquisitions to manage segment performance and allocate resources across segments and considers variances of actual performance to our annual budget and periodic forecasts as well as year over year performance when making decisions. Special charges and transaction and integration expenses are excluded from operating income in our internal reporting to the CODM as this activity is managed separately from the business segments. Activity related to special charges, including transaction and integration expenses, is described in Note 2. Transaction and integration expenses include the amortization of the acquisition-date fair value adjustment of inventories included in cost of goods sold, costs directly associated with that acquisition and costs associated with integrating the businesses
Although the segments are managed separately due to their distinct distribution channels and marketing strategies, manufacturing and warehousing are often integrated to maximize cost efficiencies. As a result, jointly utilized assets, including fixed assets, and depreciation and amortization expense are not maintained by individual segment. Depreciation and amortization expense is allocated to the segments except for amounts that are recognized in interest.
We have a large number of customers for our products. Sales to one of our Consumer segment customers, Wal-Mart Stores, Inc., accounted for approximately 12% of consolidated sales in 2025, 2024, and 2023. Sales to one of our Flavor Solutions segment customers, PepsiCo, Inc., accounted for approximately 12%, 13%, and 13% of consolidated sales in 2025, 2024, and 2023, respectively.
Accounting policies for measuring segment operating income and assets are consistent with those described in Note 1. Because of integrated manufacturing for certain products within the segments, products are not sold from one segment to another but rather inventory is transferred at cost. Inter-segment transfers are not material. Corporate assets include cash, deferred taxes, investments, and certain fixed assets.
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Business Segment Results
| (millions) | Consumer | Flavor Solutions | Total segments | Corporate & other | Total | ||||||||||||
| 2025 | |||||||||||||||||
| Net sales | $ | 3,950.3 | $ | 2,890.0 | $ | 6,840.3 | $ | — | $ | 6,840.3 | |||||||
| Cost of goods sold excluding special charges | 2,187.4 | 2,058.6 | 4,246.0 | — | 4,246.0 | ||||||||||||
| SG&A expense | 1,028.0 | 472.3 | 1,500.3 | — | 1,500.3 | ||||||||||||
| Operating income excluding special charges | 734.9 | 359.1 | 1,094.0 | — | 1,094.0 | ||||||||||||
| Income from unconsolidated operations | 68.7 | 3.5 | 72.2 | — | 72.2 | ||||||||||||
| Assets | — | — | 12,511.6 | 688.8 | 13,200.4 | ||||||||||||
| Capital expenditures | — | — | 176.4 | 45.4 | 221.8 | ||||||||||||
| Depreciation and amortization | — | — | 227.2 | 4.1 | 231.3 | ||||||||||||
| 2024 | |||||||||||||||||
| Net sales | $ | 3,848.5 | $ | 2,875.2 | $ | 6,723.7 | $ | — | $ | 6,723.7 | |||||||
| Cost of goods sold | 2,074.2 | 2,058.5 | 4,132.7 | — | 4,132.7 | ||||||||||||
| SG&A expense | 1,034.0 | 487.2 | 1,521.2 | — | 1,521.2 | ||||||||||||
| Operating income excluding special charges | 740.3 | 329.5 | 1,069.8 | — | 1,069.8 | ||||||||||||
| Income from unconsolidated operations | 71.2 | 3.0 | 74.2 | — | 74.2 | ||||||||||||
| Assets | — | — | 12,359.4 | 710.9 | 13,070.3 | ||||||||||||
| Capital expenditures | — | — | 234.1 | 40.8 | 274.9 | ||||||||||||
| Depreciation and amortization | — | — | 204.7 | 4.1 | 208.8 | ||||||||||||
| 2023 | |||||||||||||||||
| Net sales | $ | 3,807.3 | $ | 2,854.9 | $ | 6,662.2 | $ | — | $ | 6,662.2 | |||||||
| Cost of goods sold | 2,044.4 | 2,115.3 | 4,159.7 | — | 4,159.7 | ||||||||||||
| SG&A expense | 1,027.4 | 450.9 | 1,478.3 | — | 1,478.3 | ||||||||||||
| Operating income excluding special charges | 735.5 | 288.7 | 1,024.2 | — | 1,024.2 | ||||||||||||
| Income from unconsolidated operations | 54.7 | 1.7 | 56.4 | — | 56.4 | ||||||||||||
| Assets | — | — | 12,233.1 | 629.2 | 12,862.3 | ||||||||||||
| Capital expenditures | — | — | 234.9 | 29.0 | 263.9 | ||||||||||||
| Depreciation and amortization | — | — | 194.8 | 4.5 | 199.3 | ||||||||||||
A reconciliation of cost of goods sold excluding special charges and operating income excluding special charges to cost of goods sold and operating income for 2025, 2024, and 2023 is as follows:
| (millions) | Consumer | Flavor Solutions | Total | ||||||||||||||
| 2025 | |||||||||||||||||
| Cost of goods sold excluding special charges | $ | 2,187.4 | $ | 2,058.6 | $ | 4,246.0 | |||||||||||
| Special charges | 1.3 | 0.8 | 2.1 | ||||||||||||||
| Cost of goods sold | $ | 2,188.7 | $ | 2,059.4 | $ | 4,248.1 | |||||||||||
| Operating income excluding special charges | $ | 734.9 | $ | 359.1 | $ | 1,094.0 | |||||||||||
| Less: Special charges | 13.6 | 9.6 | 23.2 | ||||||||||||||
| Operating income | $ | 721.3 | $ | 349.5 | $ | 1,070.8 | |||||||||||
| 2024 | |||||||||||||||||
| Operating income excluding special charges | $ | 740.3 | $ | 329.5 | $ | 1,069.8 | |||||||||||
| Less: Special charges | 3.4 | 6.1 | 9.5 | ||||||||||||||
| Operating income | $ | 736.9 | $ | 323.4 | $ | 1,060.3 | |||||||||||
| 2023 | |||||||||||||||||
| Operating income excluding special charges expenses | $ | 735.5 | $ | 288.7 | $ | 1,024.2 | |||||||||||
| Less: Special charges | 35.8 | 25.4 | 61.2 | ||||||||||||||
| Operating income | $ | 699.7 | $ | 263.3 | $ | 963.0 | |||||||||||
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Total segment operating income as disclosed in the preceding table represents our consolidated operating income. The reconciliation of that operating income to income from consolidated operations before income taxes, which includes interest expense and other income, net is presented on the consolidated income statement.
Geographic Areas
We have net sales and long-lived assets in the following geographic areas:
| (millions) | United States | EMEA | Other countries | Total | ||||||||||
| 2025 | ||||||||||||||
| Net sales | $ | 4,168.3 | $ | 1,268.5 | $ | 1,403.5 | $ | 6,840.3 | ||||||
| Long-lived assets | 8,016.0 | 1,196.2 | 831.0 | 10,043.2 | ||||||||||
| 2024 | ||||||||||||||
| Net sales | $ | 4,103.9 | $ | 1,239.3 | $ | 1,380.5 | $ | 6,723.7 | ||||||
| Long-lived assets | 8,017.9 | 1,117.0 | 824.5 | 9,959.4 | ||||||||||
| 2023 | ||||||||||||||
| Net sales | $ | 4,083.8 | $ | 1,212.8 | $ | 1,365.6 | $ | 6,662.2 | ||||||
| Long-lived assets | 7,946.1 | 1,138.6 | 856.8 | 9,941.5 | ||||||||||
Long-lived assets include property, plant and equipment, goodwill and intangible assets, net of accumulated depreciation and amortization.
Product Categories
Our net sales by product categories consist of the following:
| For the year ended November 30 (millions) | 2025 | 2024 | 2023 | ||||||||
| Consumer segment: | |||||||||||
| Spices & seasoning | $ | 1,707.6 | $ | 1,651.0 | $ | 1,578.3 | |||||
| Recipe mixes | 439.1 | 437.7 | 430.5 | ||||||||
| Condiments & sauces | 950.9 | 936.6 | 921.0 | ||||||||
| Regional leaders | 852.7 | 823.2 | 877.5 | ||||||||
| Flavor Solutions segment: | |||||||||||
| Flavors | 1,619.9 | 1,618.6 | 1,585.7 | ||||||||
| Branded foodservice | 614.1 | 615.1 | 598.4 | ||||||||
| Custom condiments | 329.3 | 336.8 | 317.1 | ||||||||
| Coatings, bulk spices & herbs | 326.7 | 304.7 | 353.7 | ||||||||
| Total net sales | $ | 6,840.3 | $ | 6,723.7 | $ | 6,662.2 | |||||
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16. SUPPLEMENTAL FINANCIAL STATEMENT DATA
Supplemental consolidated information with respect to our income statement, balance sheet, and cash flow follow:
| For the year ended November 30 (millions) | 2025 | 2024 | 2023 | ||||||||
| Other income, net | |||||||||||
| Interest income | $ | 40.1 | $ | 45.9 | $ | 36.6 | |||||
| 4.8 | 8.4 | 10.7 | |||||||||
| Other | (6.5) | (6.9) | (3.4) | ||||||||
| $ | 38.4 | $ | 47.4 | $ | 43.9 | ||||||
| At November 30 (millions) | 2025 | 2024 | |||||||||
| Trade accounts receivable allowance for doubtful accounts | $ | 4.1 | $ | 4.7 | |||||||
| Inventories | |||||||||||
| Finished products | $ | 629.1 | $ | 618.3 | |||||||
| Raw materials and work-in-process | 642.9 | 621.6 | |||||||||
| $ | 1,272.0 | $ | 1,239.9 | ||||||||
| Prepaid expenses | $ | 53.2 | $ | 51.5 | |||||||
| Other current assets | 88.1 | 74.1 | |||||||||
| $ | 141.3 | $ | 125.6 | ||||||||
| Property, plant and equipment | |||||||||||
| Land and improvements | $ | 98.6 | $ | 94.1 | |||||||
| Buildings (including finance leases) | 925.1 | 835.8 | |||||||||
| Machinery, equipment and other | 1,747.5 | 1,571.2 | |||||||||
| Construction-in-progress | 186.8 | 247.1 | |||||||||
| Accumulated depreciation | (1,509.2) | (1,335.2) | |||||||||
| $ | 1,448.8 | $ | 1,413.0 | ||||||||
| Other long-term assets | |||||||||||
| Investments in affiliates | $ | 167.8 | $ | 152.2 | |||||||
| Long-term investments | 132.9 | 130.5 | |||||||||
| Right of use asset | 216.8 | 211.0 | |||||||||
Software, net of accumulated amortization of $307.1 for 2025 and $288.4 for 2024 | 208.7 | 179.1 | |||||||||
| Pension asset | 147.3 | 122.4 | |||||||||
| Other | 145.6 | 176.7 | |||||||||
| $ | 1,019.1 | $ | 971.9 | ||||||||
| Other accrued liabilities | |||||||||||
| Payroll and employee benefits | $ | 168.2 | $ | 192.8 | |||||||
| Sales allowances | 228.8 | 206.4 | |||||||||
| Dividends payable | 128.9 | 120.7 | |||||||||
| Other | 386.4 | 376.5 | |||||||||
| $ | 912.3 | $ | 896.4 | ||||||||
| Other long-term liabilities | |||||||||||
| Pension | $ | 79.1 | $ | 84.4 | |||||||
| Postretirement benefits | 39.3 | 40.5 | |||||||||
| Operating lease liability | 167.7 | 166.6 | |||||||||
| Other | 142.4 | 145.1 | |||||||||
| $ | 428.5 | $ | 436.6 | ||||||||
| For the year ended November 30 (millions) | 2025 | 2024 | 2023 | ||||||||
| Depreciation | $ | 163.2 | $ | 143.3 | $ | 135.3 | |||||
| Software amortization | 24.3 | 21.9 | 19.1 | ||||||||
| Interest paid | 192.8 | 210.1 | 203.6 | ||||||||
| Income taxes paid | 239.6 | 221.0 | 118.3 | ||||||||
Dividends paid per share were $1.80 in 2025, $1.68 in 2024, and $1.56 in 2023. Dividends declared per share were $1.83 in 2025, $1.71 in 2024, and $1.59 in 2023.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.
Internal Control over Financial Reporting
Management’s report on our internal control over financial reporting and the report of our Independent Registered Public Accounting Firm on internal control over financial reporting are included in our 2025 financial statements in Item 8 of this Report under the captions entitled “Report of Management” and "Report of Independent Registered Public Accounting Firm.”
ITEM 9B. OTHER INFORMATION
None of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the fourth quarter of fiscal year 2025.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
| PART III. | ||
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Information responsive to this item is set forth in the sections titled “Corporate Governance,” “Election of Directors,” and "Insider Trading Policies and Procedures" in our 2026 Proxy Statement, incorporated by reference herein, to be filed within 120 days after the end of our fiscal year.
We have adopted a code of ethics that applies to all employees, including our principal executive officer, principal financial officer, principal accounting officer, and our Board of Directors. A copy of the code of ethics is available on our internet website at www.mccormickcorporation.com. We will satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any material amendment to our code of ethics, and any waiver from a provision of our code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions, by posting such information on our website at the internet website address set forth above.
ITEM 11. EXECUTIVE COMPENSATION
Information responsive to this item is incorporated herein by reference to the sections titled “Compensation of Directors,” “Compensation Discussion and Analysis,” “Compensation and Human Capital Committee Report,” “Summary Compensation Table,” “Grants of Plan-Based Awards,” “Narrative to the Summary Compensation Table,” “Outstanding Equity Awards at Fiscal Year-End,” “Option Exercises and Stock Vested in Last Fiscal Year,” “Retirement Benefits,” “Non-Qualified Deferred Compensation,” “Potential Payments Upon Termination or Change in Control,” “Compensation and Human Capital Committee Interlocks and Insider Participation,” “Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information”, and “Equity Compensation Plan Information” in the 2026 Proxy Statement.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information responsive to this item is incorporated herein by reference to the sections titled “Principal Stockholders,” “Election of Directors,” and “Equity Compensation Plan Information” in the 2026 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information responsive to this item is incorporated herein by reference to the section entitled “Corporate Governance” in the 2026 Proxy Statement.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent registered public accounting firm is Ernst & Young LLP, Baltimore, Maryland, PCAOB ID: 00042.
Information responsive to this item is incorporated herein by reference to the section titled “Report of Audit Committee" and "Fees of Independent Registered Public Accounting Firm” in the 2026 Proxy Statement.
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| PART IV. | ||
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
List of documents filed as part of this Report.
1. Consolidated Financial Statements
The Consolidated Financial Statements for McCormick & Company, Incorporated and related notes, together with the Report of Management, and the Reports of Ernst & Young LLP dated January 22, 2026, are included herein in Part II, Item 8.
2. Consolidated Financial Statement Schedule
Supplemental Financial Schedule:
II–Valuation and Qualifying Accounts
Schedules other than that listed above are omitted because of the absence of the conditions under which they are required or because the information called for is included in the consolidated financial statements or notes thereto.
3. Exhibits required to be filed by Item 601 of Regulation S-K
The information called for by this item is incorporated herein by reference from the Exhibit Index included in this Report.
EXHIBIT INDEX
The following exhibits are attached or incorporated herein by reference:
84
| Exhibit Number | Description | ||||||||||
| (i) | See Exhibit 3 (Restatement of Charter and By-Laws) | ||||||||||
| (ii) | |||||||||||
| (iii) | |||||||||||
| (iv) | |||||||||||
| (v) | |||||||||||
| (vi) | |||||||||||
| (vii) | |||||||||||
| (viii) | |||||||||||
| (ix) | |||||||||||
| (x) | |||||||||||
| (xi) | |||||||||||
| (10) | Material contracts | ||||||||||
| (i) | |||||||||||
| (ii) | |||||||||||
| (iii) | |||||||||||
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, McCormick has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
McCORMICK & COMPANY, INCORPORATED
| By: | /s/ BRENDAN M. FOLEY | Chairman, President & | January 22, 2026 | ||||||||
Brendan M. Foley | Chief Executive Officer | ||||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of McCormick and in the capacities and on the dates indicated. | |||||||||||
| Principal Executive Officer: | |||||||||||
| By: | /s/ BRENDAN M. FOLEY | Chairman, President & | January 22, 2026 | ||||||||
Brendan M. Foley | Chief Executive Officer | ||||||||||
| Principal Financial Officer: | |||||||||||
| By: | /s/ MARCOS M. GABRIEL | Executive Vice President & Chief | January 22, 2026 | ||||||||
Marcos M. Gabriel | Financial Officer | ||||||||||
| Principal Accounting Officer: | |||||||||||
| By: | /s/ GREGORY P. REPAS | Vice President & Controller | January 22, 2026 | ||||||||
Gregory P. Repas | Principal Accounting Officer | ||||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons, being a majority of the Board of Directors of McCormick & Company, Incorporated, on the date indicated:
| THE BOARD OF DIRECTORS: | DATE: | |||||||
/s/ ANNE L. BRAMMAN | January 22, 2026 | |||||||
Anne L. Bramman | ||||||||
/s/ MICHAEL A. CONWAY | January 22, 2026 | |||||||
Michael A. Conway | ||||||||
/s/ BRENDAN M. FOLEY | January 22, 2026 | |||||||
| Brendan M. Foley | ||||||||
/s/ MICHAEL D. MANGAN | January 22, 2026 | |||||||
Michael D. Mangan | ||||||||
/s/ MARITZA G. MONTIEL | January 22, 2026 | |||||||
| Maritza G. Montiel | ||||||||
/s/ MARGARET M.V. PRESTON | January 22, 2026 | |||||||
Margaret M.V. Preston | ||||||||
/s/ GARY M. RODKIN | January 22, 2026 | |||||||
| Gary M. Rodkin | ||||||||
/s/ VALARIE SHEPPARD | January 22, 2026 | |||||||
| Valarie Sheppard | ||||||||
/s/ JACQUES TAPIERO | January 22, 2026 | |||||||
Jacques Tapiero | ||||||||
/s/ TERRY S. THOMAS | January 22, 2026 | |||||||
| Terry S. Thomas | ||||||||
/s/ W. ANTHONY VERNON | January 22, 2026 | |||||||
| W. Anthony Vernon | ||||||||
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Supplemental Financial Schedule II Consolidated
McCORMICK & COMPANY, INCORPORATED
VALUATION AND QUALIFYING ACCOUNTS
(IN MILLIONS)
| Column A | Column B | Column C Additions | Column D | Column E | |||||||||||||
| Description | Balance at beginning of period | Charged to costs and expenses | Charged to other accounts | Deductions (1) | Balance at end of period | ||||||||||||
| Deducted from asset accounts: | |||||||||||||||||
Year ended November 30, 2025: | |||||||||||||||||
| Allowance for doubtful receivables | $ | 4.7 | $ | (0.2) | $ | (0.1) | $ | (0.3) | $ | 4.1 | |||||||
| Valuation allowance on net deferred tax assets | 33.5 | 9.9 | 0.5 | (2.8) | 41.1 | ||||||||||||
| $ | 38.2 | $ | 9.7 | $ | 0.4 | $ | (3.1) | $ | 45.2 | ||||||||
| Deducted from asset accounts: | |||||||||||||||||
Year ended November 30, 2024: | |||||||||||||||||
| Allowance for doubtful receivables | $ | 5.9 | $ | 0.3 | $ | (1.2) | $ | (0.3) | $ | 4.7 | |||||||
| Valuation allowance on net deferred tax assets | 25.9 | 8.0 | 0.1 | (0.5) | 33.5 | ||||||||||||
| $ | 31.8 | $ | 8.3 | $ | (1.1) | $ | (0.8) | $ | 38.2 | ||||||||
| Deducted from asset accounts: | |||||||||||||||||
Year ended November 30, 2023: | |||||||||||||||||
| Allowance for doubtful receivables | $ | 7.3 | $ | (0.7) | $ | (1.2) | $ | 0.5 | $ | 5.9 | |||||||
| Valuation allowance on net deferred tax assets | 26.4 | 3.7 | — | (4.2) | 25.9 | ||||||||||||
| $ | 33.7 | $ | 3.0 | $ | (1.2) | $ | (3.7) | $ | 31.8 | ||||||||
(1) Includes the impact of foreign currency exchange.
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