What McCormick & Company, Incorporated told the SEC could break it.

Tariffs raised commodity costs and contributed to a 60bp gross-margin decline (to 37.9%) in 2025; McCormick also flags legal challenges to US tariffs as a supply-chain uncertainty.

“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.”

FDA's April 2025 call to phase out petroleum-based synthetic dyes and the MAHA Commission's food-ingredient scrutiny create reformulation and regulatory risk for McCormick's colors/flavors portfolio.

“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.”

McCormick's most significant 2025 raw materials — dairy, pepper, garlic, onion, capsicums (red peppers/paprika), salt, tomato products, sugar and soybean oil — are subject to price volatility from weather, growing/harvest conditions and government actions.

“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.”