Colgate-Palmolive Company CL reported third-quarter adjusted earnings per share of 91 cents, beating the street view of 89 cents. Quarterly sales of $5.033 billion (+2.4%) beat the street view of $5.003 billion, driven by a “healthy” balance of volume growth and higher pricing.
Colgate said in a press release that for the sixth consecutive quarter, the company has achieved gross margin expansion while also seeing increases in operating profit, net income, and earnings per share.
The GAAP gross profit margin rose by 260 basis points to reach 61.1%, while the base business gross profit margin increased by 270 basis points to 61.3%.
Geographically, sales increased by 8% in Europe, 6.3% in Asia Pacific, and 4.8% in Africa/Eurasia, with Hill’s also rising by 6.3%. However, Latin America and North America experienced declines, with sales down 3.2% and 2.1%, respectively.
In the quarter under review, Colgate maintained its strength in the oral care arena, boasting a global market share of 41.6% in toothpaste and 32.3% in manual toothbrushes year to date.
“Advertising increased 16% in the quarter behind science-led, core and premium innovation across price tiers,” said Noel Wallace, Chairman, President and Chief Executive Officer.
“We expect continued strong advertising investment through the remainder of the year as we focus on building brand health and scaling the capabilities needed to drive growth,” Wallace added.
Outlook: Colgate now anticipates net sales growth of 3% to 5% for 2024, up from the previous forecast of 2% to 5%, and expects organic sales growth of 7% to 8%, an increase from the earlier range of 6% to 8%.
On a non-GAAP (Base Business) basis, the company continues to anticipate gross profit margin expansion and increased advertising investment, and it now expects earnings per share growth of 10% to 11%, up from the previous range of 8% to 11%.
Price Action: CL shares are trading lower by 0.86% to $98.88 premarket at last check Friday.
Photo by Nik on Unsplash
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