Colgate-Palmolive Tops Q1 Expectations, Reveals Confidence In Growth Expectations Despite Uncertain Operating Environment

Colgate-Palmolive Co CL reported first-quarter FY23 sales growth of 8.5% year-on-year to $4.77 billion, beating the consensus of $4.58 billion.
Organic sales increased by 10%. Total Oral, Personal, and Home Care net sales increased by 5.2% to $3.7 billion.
Non-GAAP EPS of $0.73 beat the analyst consensus of $0.70.
Gross profit was $2.71 billion, while the margin contracted 160 basis points to 56.7%.
Selling, general and administrative expenses rose 7.1% to $1.8 billion.
Operating margin contracted 40 basis points to 19.1%, and operating income for the quarter increased 5.7% to $909 million.
The company held $867 million in cash and equivalents as of March 31, 2023. Net cash provided by operations was $735 million for Q1.
"We expect to drive further gross margin improvement in the balance of the year through continued strong pricing and the benefits from funding-the-growth and other productivity initiatives," said Chairman, President, and CEO Noel Wallace.
"Looking ahead, while we still see uncertainty in the global operating environment, particularly in the back half of the year, we feel well positioned to deliver on our increased 2023 sales and earnings growth expectations and drive value for our stakeholders."
Outlook: Colgate sees FY23 net sales growth of 3%-6% (prior view 2%-5%), including the benefit from acquisitions of pet food businesses and a low-single-digit negative impact from foreign exchange.
The company now expects organic sales growth of 4%-6% (prior view towards the high end of its long-term targeted range of 3%-5%).
On a non-GAAP basis, the company still expects gross profit margin expansion and increased advertising investment and now expects mid-single-digit EPS growth (prior view low to mid-single-digit EPS growth).
Price Action: CL shares are trading higher by 0.68% at $78.46 in premarket on the last check Friday.
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