Colgate-Palmolive has posted third-quarter sales and profit figures below expectations as cost inflation and the strong dollar took their toll.
The company’s operating profit fell 2.1% to $947m after margin slid from 21.9% to 21.3%.
Net sales edged up 1.0% to $4.46bn, with organic growth of 7% driven by an 11.5% increase in prices across its various brands to offset higher costs. However, as with other consumer goods firms, Colgate saw organic volumes fall 4.5% as consumers switched to cheaper products and supermarket own-label.
Colgate noted that it retained a 39.7% share of the global toothpaste market and a 31.6% share of the manual toothbrush market.
“As expected, significant increases in raw and packaging material and logistics costs continued during the quarter and the negative impact from currency accelerated,” said Chief Executive Noel Wallace.
“Beyond revenue growth management and the significant pricing actions we are taking, we are also continuing our efforts around funding-the-growth and other productivity initiatives to help offset these headwinds.
“Looking ahead, despite the challenging macroeconomic environment, we intend to continue to execute against our strategy in order to drive value for all stakeholders.”
Colgate updated its full-year guidance and said it now expects sales growth in the middle of its 1% to 4% range.
NAM Implications:
- Colgate obviously has the advantage of global brand status.
- And can thereby push through CPIs.
- The real CPI struggles will take place in the Middle Ground battlefield…
- …between less fortunate medium and small sized brands trying to maintain/grow share…
- …at the expense of equivalent brands and own label.
