Colgate-Palmolive Eyes Further Brand Penetration Following Q2 Performance, Raises Organic Revenue Growth Outlook

Colgate-Palmolive Company CL reported second-quarter FY24 sales growth of 4.9% year-on-year to $5.058 billion, beating the analyst consensus estimate of $5.010 billion.

Organic sales increased by 9%. Total Oral, Personal, and Home Care net sales increased by 4.7% to $3.94 billion.

Non-GAAP EPS of $0.91 beat the analyst consensus of $0.87.

Gross profit was $3.06 billion, while the margin expanded 280 basis points to 60.6%. Selling, general and administrative expenses rose 9.7% to $1.94 billion.

Operating margin expanded 140 basis points to 21.6%, and operating income for the quarter increased 12.1% to $1.09 billion.

The company held $1.11 billion in cash and equivalents as of June-end. Operating cash flow totaled $1.67 billion for the six months.

“We are particularly pleased that every operating division delivered positive volume growth in the quarter, as we look to increase brand penetration to drive category growth,” said Chairman, President, and CEO Noel Wallace.

“This combination of sales growth and operating leverage allowed us to continue to invest for the long-term health of our business, with an 18% increase in advertising in the quarter.”

Colgate-Palmolive’s quarterly cash dividend of $0.50 per common share is payable on August 15 to shareholders of record on July 19.

Outlook: Colgate still expects fiscal 2024 net sales growth of 2% to 5%, including a mid-single-digit negative impact from foreign exchange. The company raised its organic sales growth outlook to 6% – 8% (prior view of 5% – 7%).

On a non-GAAP basis, the company still expects gross profit margin expansion, increased advertising investment, and an earnings-per-share growth of 8% – 11% (versus mid to high-single-digit previously).

Price Action: CL shares are trading higher by 0.11% at $96.60 in premarket at last check Friday.

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