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Colgate-Palmolive Company CL reported first-quarter 2025 results, wherein the bottom and top lines beat the Zacks Consensus Estimate. Earnings improved year over year while sales fell. Results benefited from organic sales growth, robust volume and pricing performance, and gross profit margin expansion. The company is focused on investing in scaling its capabilities in key areas such as digital, data and analytics to enhance competitive advantages and drive profitability.
On a Base Business basis (non-GAAP basis), earnings were 91 cents per share, up 6% from the prior-year period. The bottom line surpassed the Zacks Consensus Estimate of 86 cents.
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Net sales of $4,911 million inched down 3.1% from the year-ago quarter but surpassed the Zacks Consensus Estimate of $4,855 million. On an organic basis, the company’s sales advanced 1.4%, which includes a 0.4% unfavorable impact from reduced private-label pet volume. Foreign exchange also hurt net sales by 4.4%.
A Detailed Picture of CL's Q1 Results
Colgate's organic sales were driven by a 0.1% drop in volume and a 1.5% improvement in pricing. We estimated organic sales growth of 3.4% for the first quarter, with a 2.1% rise in pricing and a 1.3% increase in volume.
Colgate-Palmolive Company Price, Consensus and EPS Surprise
Colgate-Palmolive Company price-consensus-eps-surprise-chart | Colgate-Palmolive Company Quote
In the earnings release, management highlighted that the company maintained its leadership in the toothpaste market, holding a 40.9% global market share year to date. In addition, Colgate continued to lead the manual toothbrush market with a 31.9% global market share year to date.
The gross profit of $2,987 million decreased from $3,039 million reported in the year-ago quarter. The company’s first-quarter gross profit margin and Base Business gross profit margin expanded 80 basis points (bps), reaching 60.8%. We expected adjusted gross margin expansion of 130 bps to 61.3%.
Selling, general and administrative (SG&A) expenses totaled $1,898 million, a decline from $1,916 million in the same quarter of the previous year.
The company’s operating profit of $1,076 million jumped from $1,047 million reported in the year-ago quarter. The operating profit margin expanded 120 bps year over year to 21.9%. We expected the operating margin to expand 20 bps to 21.6% for the first quarter.
A Peek Into CL’s Segmental Discussion
North America’s net sales (20% of total sales) dipped 3.6% year over year on a reported basis and 3% on an organic basis. The sales decline was led by a decrease of 0.7% in pricing and 2.3% in volume.
Latin America’s net sales (23% of the total sales) declined 8.7% year over year as a 1.2% pricing gain and a 2.7% increase in volume were more than offset by a 12.7% unfavorable currency impact. On an organic basis, regional sales rose 4%.
Europe’s net sales (14% of the total sales) increased 2.5% year over year on a reported basis and 5.4% on an organic basis. Sales growth was driven by a 3% rise in volume and a 2.4% pricing gain, offset by a 2.9% adverse currency impact.
The Asia Pacific segment’s net sales (14% of the total sales) fell 5% year over year, reflecting a 3.4% drop in volume, offset by a 0.4% rise in pricing. Regional organic sales also slipped 3.1%.
Africa/Eurasia’s net sales (6% of the total sales) dipped 1.5% year over year due to a 2.3% drop in volume and a 3.4% unfavorable currency impact, offset by a 4.1% jump in pricing. Organic sales for the segment advanced 1.8%.
Hill’s Pet Nutrition’s net sales (23% of the total sales) improved 1.5% from the year-ago quarter on a reported basis and 2.9% on an organic basis. Results gained from a 3.2% rise in pricing, offset by a 0.3% drop in volume and a 1.4% negative currency impact.