Market jitters are making consumers hesitant to stockpile daily necessities like toothpaste and dish soap, and the company does not believe this consumer hesitation will ease in the near term.
CEO Noel Wallace stated in a Friday call with analysts that the consumer products industry currently faces numerous challenges, chief among them being consumer uncertainty about the direction of the economic outlook.
Persistent market volatility is prompting consumers to delay replenishing household staples, opting not to buy extra toothpaste even when faced with promotions.
"We anticipate trends will improve slightly," Wallace said, referring to the coming year, "but we do not expect a significant improvement in the U.S. economy, at least not for the next several quarters."
In response to the many uncertainties, Colgate-Palmolive issued a broader-than-usual financial outlook for next year, forecasting sales growth of 2% to 6%, with organic sales growth of 1% to 4%. Analysts surveyed by FactSet predict the company's 2026 sales will reach approximately $21 billion, a 3% increase from last year.
Colgate-Palmolive's stock recently rose 4%, closing at $88.65. The stock has climbed 14% over the past month, though it is down 2.3% since last year.
Chief Financial Officer Stan Sutula indicated that the provided performance range accounts for various potential outcomes. If current trends worsen, full-year sales could land at the lower end of the range; if market conditions remain stable, sales might hit the mid-point; and if trends improve faster than expected, sales could reach the upper limit.
"But as we've outlined, and as you've seen, significant uncertainties remain globally, and while volumes have stabilized across categories, they are still at low levels," Sutula noted.
However, Colgate-Palmolive expects the growth momentum from last year to continue into 2026. The company reported that fourth-quarter sales grew 5.8% year-over-year to $5.23 billion, surpassing Wall Street's expectation of $5.12 billion. This was primarily driven by price increases offsetting essentially flat volume, resulting in 2.2% organic sales growth.
This performance echoes that of Procter & Gamble, which stated last week that price hikes helped offset volume declines in its latest quarter, amid a challenging consumer market. Furthermore, Church & Dwight also reported recent growth on Friday, with strength in its personal care business countering weakness in its home products segment.
Wallace pointed out that Colgate-Palmolive's new growth strategy is expected to benefit the company. This strategy will leverage artificial intelligence and automation to accelerate product development, optimize marketing for new and existing products, and respond more swiftly to shifts in consumer demand. Concurrently, the company has implemented measures to streamline operations and reduce costs, enabling increased investment in faster-growing emerging markets.
Despite the sales growth, Colgate-Palmolive posted a loss in the latest quarter, largely due to a $794 million impairment charge related to its skin health business. The company stated that this business is facing lower-than-expected category growth rates and underperforming results.
Excluding this impairment charge and other one-time costs, the company's earnings per share were 95 cents, beating analysts' expectation of 91 cents.
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