(Reuters) – Cholula hot sauce maker McCormick forecast annual sales and profit below analysts’ estimates on Thursday, hurt by a persistent slump in demand for its spices and condiments, especially in China, in addition to higher marketing expenses.

Packaged food corporations including McCormick, General Mills and Conagra Brands have also faced slowing demand across geographies as sticky inflation has compelled budget-conscious customers to hunt for value even for essential items comparable to groceries.

Increased marketing and promoting efforts have also taken a toll on the corporate’s profit expectations, with costs rising 2.3% within the fourth quarter. McCormick now projects annual adjusted profit to grow 3% to five%, below expectations of 6.5%, based on data compiled by LSEG.

For fiscal yr 2025, the corporate expects sales to be flat or grow as much as 2%, compared with analysts’ estimate of a 2.4% rise, based on data compiled by LSEG. Sales had risen 0.9% in fiscal 2024 and 4.9% in 2023.

McCormick may be under pressure from the potential import tariffs which U.S. President Donald Trump plans to impose, as the corporate relies heavily on ingredients sourced from China and Europe.

Shares of the Hunt Valley, Maryland-based company, which were up 11% last yr, fell 1.4% in premarket trading.

McCormick, nevertheless, reported a narrow beat for sales and profit within the fourth quarter ended Nov. 30, despite a 6.9% decline in sales within the Asia-Pacific region which incorporates its operations in China.

The corporate posted net sales of $1.8 billion for the quarter, compared with analysts’ estimates of $1.77 billion. Adjusted profit was 80 cent per share for the quarter, compared with analysts’ estimates of 77 cents.

(Reporting by Neil J Kanatt in Bengaluru; Editing by Krishna Chandra Eluri)