Colgate-Palmolive Company (CL) announced strong third-quarter results, exceeding analysts’ expectations for both earnings and revenue. The company reported adjusted earnings per share of 91 cents, surpassing the street view of 89 cents. Quarterly sales reached $5.033 billion, representing a 2.4% increase and outperforming the anticipated $5.003 billion. This growth was fueled by a healthy combination of volume expansion and higher pricing.
For the sixth consecutive quarter, Colgate has achieved gross margin expansion, along with increases in operating profit, net income, and earnings per share. The GAAP gross profit margin climbed by 260 basis points to reach 61.1%, while the base business gross profit margin rose by 270 basis points to 61.3%.
Geographically, Colgate saw strong sales growth across several regions. Sales increased by 8% in Europe, 6.3% in Asia Pacific, and 4.8% in Africa/Eurasia. Hill’s Pet Nutrition also experienced a 6.3% sales increase. However, Latin America and North America registered sales declines of 3.2% and 2.1%, respectively.
Colgate maintained its dominant position in the oral care market during the quarter, boasting a global market share of 41.6% in toothpaste and 32.3% in manual toothbrushes year-to-date. The company attributes this strength to its focus on science-led innovation across all price tiers. “Advertising increased 16% in the quarter behind science-led, core and premium innovation across price tiers,” said Noel Wallace, Chairman, President and Chief Executive Officer. “We expect continued strong advertising investment through the remainder of the year as we focus on building brand health and scaling the capabilities needed to drive growth,” Wallace added.
Looking ahead, Colgate has raised its 2024 sales forecast. The company now anticipates net sales growth of 3% to 5%, an increase from the previous forecast of 2% to 5%. Organic sales growth is expected to be in the range of 7% to 8%, up from the earlier estimate of 6% to 8%. On a non-GAAP (Base Business) basis, Colgate continues to anticipate gross profit margin expansion and increased advertising investment. The company now expects earnings per share growth of 10% to 11%, an increase from the previous range of 8% to 11%.
CL shares were trading down by 0.86% to $98.88 premarket on Friday.