Colgate-Palmolive Shares Fall On Mixed Q2 Results, Rising Costs, Declining Profit Margins

Colgate-Palmolive Co CL reported second-quarter FY21 sales growth of 9.5% year-on-year, to $4.26 billion, beating the analyst consensus of $4.24 billion.
Organic sales increased 5.0%, driven by volume growth and higher pricing. Total Oral, Personal, and Home Care net sales improved 7% to $3.47 billion.
EPS of $0.80 matched the analyst consensus.
Gross profit expanded 7.9% Y/Y to $2.6 billion. GAAP gross profit margin contracted 80 basis points to 60.0%.
Selling, general and administrative expenses rose 12.4% Y/Y to $1.6 billion.
The operating margin contracted 90 basis points to 23.4%, and operating income for the quarter rose 5.2% to $996 million.
The company held $937 million in cash and equivalents as of June 30, 2021. Net cash provided by operations was $1.225 billion for the six months.
The total debt of Colgate amounted to $7.97 billion.
"We expect the difficult cost environment to continue in the back half of the year and we remain sharply focused on our funding the growth and revenue growth management initiatives," said Chairman, President, and CEO Noel Wallace.
Outlook: Colgate backed its FY21 sales growth outlook of 4%-7%, and organic sales to be up within its long-term targeted 3%-5%.
On a non-GAAP basis, it currently sees a decline in gross profit margin (prior gross margin expansion), increased advertising investment, and EPS growth at the lower end of its mid to high-single-digit range.
Price action: CL shares are trading lower by 4.56% at $79.72 on the last check Friday.
Photo by Opal RT from Pixabay

Market News and Data brought to you by Benzinga APIs

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Comments