McCormick Misses Estimates, Forecasts Slower Sales and Profit Growth

McCormick & Company, the producer of Cholula hot sauce, projected its annual sales and profit below analysts' expectations. This was driven by a persistent decline in demand for its spices and condiments, particularly in China, and higher marketing costs.

The company's adjusted annual profit is now anticipated to grow between 3% and 5%, falling short of the consensus estimate of 6.5%. Sales for fiscal year 2025 are forecast to remain flat or increase by a maximum of 2%, compared to analysts' projections of a 2.4% rise.

McCormick faces potential pressure from import tariffs imposed by the Trump administration, as the company relies significantly on ingredients sourced from China and Europe.

Despite the challenges, McCormick exceeded estimates for sales and profit in the fourth quarter ended November 30th. Net sales reached $1.8 billion, above expectations of $1.77 billion. Adjusted profit was 80 cents per share, beating analysts' estimates of 77 cents.

Increased marketing and advertising expenses weighed on the company's profit expectations, with costs rising 2.3% in the fourth quarter. Sales in the Asia-Pacific region, which includes China, declined by 6.9%.

Shares of McCormick fell 1.4% in premarket trading, following an 11% increase last year.