Colgate-Palmolive has beaten first-quarter sales and profit estimates as resilient demand for its oral and personal care essentials helped it overcome the impact of rising prices and tariff uncertainties.
The group’s net sales increased 1.0% to $5.11bn, with organic growth of 1.8%, including a 0.6% negative impact from lower private label pet goods sales. Robust organic growth in Latin America (+3.4%), Europe (+2.0%), and Africa/Eurasia (+7.7%) helped offset weakness in North America (-0.9%).
Colgate-Palmolive increased prices by 2.0% during the period, but total organic volumes slipped only 0.2% after it ramped up its marketing activity.
The company now expects annual organic sales growth to be at the low end of 2% to 4%, including the impact of its planned exit from private label pet sales.
Meanwhile, incremental costs from tariffs are forecast to be about $75m, lower than $200m projected earlier, as it expects more favourable rates. It makes much of its US toothpaste in Mexico.
Chief Executive Noel Wallace commented: “I am pleased that Colgate-Palmolive people achieved another quarter of net sales, organic sales and earnings per share growth in the face of continued difficult market conditions worldwide, with organic sales growth improving sequentially versus the first quarter despite an even greater negative impact from lower private label pet sales.
“We feel we are well-positioned to deal with the year-to-date volatility in category growth and uncertainty in global markets. Guided by our strategic framework, including our focus on innovation and the strength of our global portfolio, our teams on the ground continue to execute with excellence and focus to achieve our 2025 financial targets.”
Separately, Colgate-Palmolive announced a new three-year productivity programme to support future growth and its 2030 strategy. The company stated that the programme includes initiatives to “better align its organizational structure to support its strategic initiatives, optimize the company’s global supply chain to drive agility and efficiencies and simplify and streamline its organizational structure to reduce overhead costs.”
NAM Implications:
- Strong brands can get their price increases away, albeit with a push…
- And can possibly tolerate some degree of loss of loyals to own label equivalents.
- (and the ability to absorb the cost of winning back their loyalty…)
- However, for most branded players, this will be an unprecedented, challenging issue for the foreseeable future…
