Colgate-Palmolive's Q2 earnings surpass expectations; forecasts FY2025 organic sales growth at the lower end of the projected range
Colgate-Palmolive Co. (CL) has reported higher profit and revenues in its second quarter, as the consumer goods giant continues to navigate market challenges. In a recent earnings report, the company announced a new three-year productivity program, but did not provide an updated outlook for net sales, organic sales growth, or earnings for fiscal 2025.
The company's revenue for the period rose 1 percent to $5.11 billion from $5.06 billion last year. This growth was slightly above analysts' expectations of $5.03 billion. Adjusted earnings for the period were $750 million or $0.92 per share, down slightly from $753 million or $0.91 per share a year earlier.
Organic sales growth for the quarter was 1.8 percent, impacted negatively by private-label pet sales and foreign exchange effects. This growth is now expected to be at the low end of the previous outlook of 2 percent to 4 percent for the full year. On adjusted, Base Business basis, Colgate-Palmolive still expects gross profit margin and earnings per share to be up low single digits.
In a move to boost efficiency and reduce costs, Colgate-Palmolive announced a new three-year productivity program. Substantially all charges from the productivity program are expected to be incurred by December 31, 2028. The company did not announce any new developments related to its productivity program or its expected charges and timeline.
For fiscal 2025, Colgate-Palmolive expects earnings per share to be up low single digits. Wall Street analysts on average expected the company to report earnings of $0.89 per share. Net sales are expected to be up low single digits for fiscal 2025, including a flat to low-single-digit negative impact from foreign exchange.
The company did not provide an updated outlook for organic sales growth for fiscal 2025. For fiscal 2025, Colgate-Palmolive expects gross profit margin to be roughly flat as a percentage of net sales.
Colgate-Palmolive shares were gaining around 1.3 percent in pre-market activity on the NYSE. The company's focus on cost-cutting measures and continued revenue growth despite market challenges bodes well for its future prospects. However, investors will be closely watching for updates on the productivity program and any potential impact on the company's financial performance in the coming quarters.
- Colgate-Palmolive's focus on reducing costs through a new three-year productivity program indicates an investment in its business, aiming to increase efficiency and profitability.
- Despite the negatively impacted organic sales growth and challenges in the market, Colgate-Palmolive's reported higher revenues and expectations of low single-digit earnings and gross profit margin growth for fiscal 2025 reflect strong financial performances in the business sector.
