CL - Colgate-Palmolive tops organic sales estimates with pricing up double-digits

2023-07-28 07:36:47 ET

Colgate-Palmolive Company ( NYSE: CL ) reported organic sales increased 8.0% year-over-year in Q2 , led by strength in the Latin America (+16.5%) and Africa/Euroasia (+20.5%) divisions, while the North America (+2.0%) and Asia Pacific (+1.0%) divisions lagged. The organic sales growth was well ahead of the consensus estimate of +5.4%.

Pricing was up 11.0% across the company during the quarter, while organic volume fell 3.0% and FX clipped two percentage points of growth

Operating profit was up 10% year-over-year on an as reported basis during the quarter, led by gains in the Latin America (+38%) and Africa/Euroasia (+24%) divisions. Operating profit was only up 1% for the Europe division and 3% for the Asia Pacific division.

North America accounted for 20% of Colgate-Palmolive's ( CL ) quarterly revenue tally. In the United States, Colgate's share of the toothpaste market is 33.9% year to date and its share of the manual toothbrush market is 41.0% year to date.

CEO outlook: "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. 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's ( CL ) guidance was for full-year total sales growth of +5% to +8% and full-year organic sales growth of +5% to +7% vs. +6.4% consensus. On a non-GAAP basis, CL still expects gross profit margin expansion and increased advertising investment and now expects earnings-per-share growth to land at the high end of the mid-single-digit range.

Shares of CL moved up 0.78% in premarket action on Friday.

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