Personal care product makers Colgate-Palmolive and Church & Dwight both raised their annual sales and profit forecasts on Friday after seeing relatively resilient consumer demand despite further price hikes.
Colgate-Palmolive saw its second-quarter net sales climb 7.5% to $4.82bn, with organic growth of 8.0% after increase in all its divisions and product categories. This was driven by price increases of 11.0%, with volumes down only 3%.
Higher prices aided the toothpaste maker’s gross margin, which expanded 80 basis points to 57.8% in the quarter ended 30 June.
“We believe we are well positioned to continue to drive top and bottom line growth through the balance of 2023 as our gross margin expansion, driven by sustained pricing and the benefits from funding-the-growth and other productivity initiatives, allows us to invest behind our brands,” said CEO Noel Wallace.
“Advertising spending increased significantly in the quarter to drive brand health and in support of our strong innovation and pricing activity. Strong investment levels should continue in the back half of the year as we work to deliver balanced organic sales growth.”
Colgate-Palmolive now expects annual organic sales to grow between 5% and 7%, compared with a previous forecast of 4% to 6% growth. And it forecasts full-year adjusted earnings per share growth to be at the high end of mid-single digits, compared with a previous forecast of growth in mid-single digits.
Meanwhile, Church & Dwight raised its forecasts, betting on higher prices and steady demand for its household and personal care products that include detergents, toothpaste and mouthwash.
In the second quarter, its net sales grew 9.7% to $1.45bn, with gross margin expanding by 270 basis points after benefitting from productivity, pricing, and contributions from higher margin acquisitions offsetting cost inflation.
Despite almost two years of significant price increases, the firm noted that it continues to experience strong consumer demand across its portfolio. Organic sales grew 5.4%, driven by positive product mix and pricing of 5.8%, while volume was down slightly but exceeded expectations. However, the company predicts that its volumes will be positive in the second half and the full year.
Church & Dwight now expects full-year adjusted profit to increase by 6%, compared with its earlier forecast of growth of 2% to 4%. And driven by its International division, full-year reported net sales are forecast to grow by 8%, compared with its previous forecast of a 6% to 7% increase.
