Colgate-Palmolive reported growth in both profit and revenue for the third quarter.
Colgate-Palmolive announced third-quarter net sales of $5.37 billion, up 4.6% year over year, surpassing Wall Street analyst expectations. The maker of Irish Spring soap and Ajax cleaner released its earnings report last Friday, showing that revenue grew in the latest quarter as strong performance in overseas markets offset continued weakness in North America, where consumer spending remains under pressure. Third-quarter net sales reached $5.37 billion, a 4.6% year-over-year increase, beating market expectations. Revenue rose in every region except North America, where net sales declined 1.7% compared to the same period last year. CEO Noel Wallace said, "The macro environment in the U.S. remains challenging. Elevated oil prices have led to volatile consumer behavior, low market confidence, and pressure across all categories."
Wallace stated that Colgate-Palmolive is working to turn around its U.S. business by increasing brand investment and developing premium new products to strengthen its competitive position in growth segments such as toothpaste. Outside the United States, emerging markets and Europe continued to perform well, driving overall sales, Wallace said. The company also achieved positive volume growth for a fourth consecutive quarter, with volumes up 1.7% year over year in the quarter. Product prices rose 2% during the quarter, partially offsetting higher costs for raw materials, packaging, and logistics. The stock climbed 2.9% last Friday to $95.92, bringing its year-to-date gain to 23%.
Looking ahead, Colgate-Palmolive expects "stubbornly elevated cost pressures" to persist through the fourth quarter and into early next year. "Higher costs are a given reality, and we are focused on what we can control and executing our established business strategy," Wallace said. The company narrowed its full-year net sales guidance to 4%-5% growth from a prior range of 2%-6%, and specified its adjusted earnings per share outlook, projecting year-over-year growth of 5%-7%, compared with a previous expectation of mid-single-digit growth. Third-quarter net income was $751 million, or $0.94 per share, compared with $735 million, or $0.91 per share, in the same period last year. According to FactSet data, adjusted earnings per share for the quarter came in at $0.97, above the analyst consensus estimate of $0.93.
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