Colgate-Palmolive’s (NYSE:CL) Q1 Sales Top Estimates

CL Cover Image — Colgate-Palmolive’s (NYSE:CL) Q1 Sales Top Estimates

Jabin Bastian

Fri, Apr 25, 2025, 5:09 AM 5 min read

Revenue: $4.91 billion vs analyst estimates of $4.88 billion (3.1% year-on-year decline, 0.6% beat)
Adjusted EPS: $0.91 vs analyst estimates of $0.86 (6.1% beat)
Adjusted EBITDA: $1.25 billion vs analyst estimates of $1.2 billion (25.4% margin, 3.9% beat)
Operating Margin: 21.9%, up from 20.7% in the same quarter last year
Free Cash Flow Margin: 9.7%, down from 11% in the same quarter last year
Organic Revenue rose 1.4% year on year (9.8% in the same quarter last year)
Sales Volumes were flat year on year (1.3% in the same quarter last year)
Market Capitalization: $75.19 billion

Colgate-Palmolive Company (NYSE:CL) today reported results for first quarter 2025. Noel Wallace, Chairman, President and Chief Executive Officer, commented on the Base Business first quarter results, “Colgate-Palmolive people delivered another quarter of organic sales and earnings per share growth in the face of very difficult market conditions worldwide. The positive organic sales growth, in a period of slowing category growth in many markets, is a testament to the strength of our brands and our commitment to executing against our strategy.

Company Overview

Formed after the 1928 combination between toothpaste maker Colgate and soap maker Palmolive-Peet, Colgate-Palmolive (NYSE:CL) is a consumer products company that focuses on personal, household, and pet products.

Household Products

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Sales Growth

A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $19.95 billion in revenue over the past 12 months, Colgate-Palmolive is larger than most consumer staples companies and benefits from economies of scale, enabling it to gain more leverage on its fixed costs than smaller competitors. Its size also gives it negotiating leverage with distributors, allowing its products to reach more shelves. However, its scale is a double-edged sword because it’s harder to find incremental growth when your existing brands have penetrated most of the market. For Colgate-Palmolive to boost its sales, it likely needs to adjust its prices, launch new offerings, or lean into foreign markets.

As you can see below, Colgate-Palmolive grew its sales at a tepid 4.5% compounded annual growth rate over the last three years, but to its credit, consumers bought more of its products.

This quarter, Colgate-Palmolive’s revenue fell by 3.1% year on year to $4.91 billion but beat Wall Street’s estimates by 0.6%.

Looking ahead, sell-side analysts expect revenue to grow 1.8% over the next 12 months, a slight deceleration versus the last three years. This projection is underwhelming and indicates its products will see some demand headwinds. At least the company is tracking well in other measures of financial health.

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Volume Growth

Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful staples business as there’s a ceiling to what consumers will pay for everyday goods; they can always trade down to non-branded products if the branded versions are too expensive.

To analyze whether Colgate-Palmolive generated its growth from changes in price or volume, we can compare its volume growth to its organic revenue growth, which excludes non-fundamental impacts on company financials like mergers and currency fluctuations.

Over the last two years, Colgate-Palmolive’s average quarterly volume growth was a healthy 1.1%. Even with this good performance, we can see that most of the company’s gains have come from price increases by looking at its 6.9% average organic revenue growth. The ability to sell more products while raising prices indicates that Colgate-Palmolive enjoys some degree of inelastic demand.

Colgate-Palmolive Year-On-Year Volume Growth

In Colgate-Palmolive’s Q1 2025, year on year sales volumes were flat. This result was a meaningful deceleration from its historical levels. We’ll be watching closely to see if Colgate-Palmolive can reaccelerate demand for its products.

Key Takeaways from Colgate-Palmolive’s Q1 Results

We enjoyed seeing Colgate-Palmolive beat analysts’ EPS. On the other hand, its organic revenue missed and the company lowered its outlook for organic sales growth for the full year. Overall, this quarter was mixed. The stock remained flat at $92.55 immediately after reporting.

Is Colgate-Palmolive an attractive investment opportunity at the current price? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

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