Colgate products on store shelves at Rt-Mart Xingtang, March 3, 2024. Archive photo: Shwangtianyuan / Wikimedia Commons, CC BY-SA 4.0. Cropped; adapted photo under the same license.
Colgate-Palmolive raised its full-year adjusted earnings growth forecast Friday after third-quarter sales increased 4.6% to $5.369 billion, although its North American business reported lower sales and profit.
The consumer-products company now expects 2026 Base Business earnings per share, its non-GAAP measure, to rise 5% to 7%, compared with its previous forecast of mid-single-digit growth. It also narrowed its full-year sales growth forecast to 4% to 5% from 2% to 6%, according to its October 30 results announcement.
The narrower sales range is not an across-the-board increase in the outlook. Its midpoint moved higher, but its upper limit came down. Colgate also changed its gross profit margin forecast to an increase from its previous expectation of roughly flat performance.
Volume and prices lifted global sales
Third-quarter organic sales, which exclude currency movements, acquisitions and divestments, rose 3.6%. Worldwide volume increased 1.7%, while pricing contributed 2%. Foreign exchange added 1% to reported sales growth. The company said lower private-label pet food sales reduced organic growth by 0.2 percentage point.
Reported diluted earnings per share increased 3% to 94 cents. Base Business diluted earnings per share rose 7% to 97 cents. Reported gross profit margin increased 80 basis points to 60.2%; the adjusted measure increased 90 basis points to 60.3%.
Chief Executive Noel Wallace said the company had recorded its fourth consecutive quarter of improving worldwide volume growth. He also cited consumer uncertainty and continuing economic volatility. Colgate said advertising spending increased at a double-digit rate in the quarter.
North America was the weak spot
North American sales fell 1.7%, including a 3.7% drop in volume that a 2.2% pricing increase did not offset. Organic sales fell 1.6%. Operating profit for the division declined 11% to $177 million, and its operating margin fell 210 basis points to 19.5%.
Latin America posted 12.5% reported sales growth, including a 6.5% currency benefit. Organic sales there increased 6%, with both volume and pricing contributing. Hill’s Pet Nutrition sales increased 5.6%, while organic sales rose 5.7%.
The split matters for readers looking for a broad consumer signal: Colgate’s global gains did not mean that every region strengthened. Its results showed worldwide sales and earnings growth alongside a decline in its North American business.
Colgate-Palmolive sells oral-care, personal-care, home-care and pet-nutrition products, including Colgate, Palmolive, Softsoap, Irish Spring and Hill’s brands. Its full-year outlook remains a company forecast rather than an achieved result.
JBizNews Desk | NEW YORK
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