Colgate-Palmolive EPS Up, Revenue Lags
Consumer goods manufacturer Colgate-Palmolive (NYSE:CL) reported mixed fourth-quarter and full-year 2024 earnings on Friday, Jan. 31. Adjusted earnings per share (EPS) for Q4 rose to $0.91, surpassing Wall Street consensus estimates of $0.89. However, revenue of $4.944 billion came in just short of the expected $4.98 billion. For the full year, the company exceeded $20 billion in net sales for the first time, totaling $20,101 billion (up 3.3% from 2023). Organic sales growth for the year was 7.4%.
The quarter's (and the annual) performance reflects the company's resilience amidst competitive pressures and highlights its market leadership in key segments.
| Metric | Q4 2024 | Analysts' Estimate | Q4 2023 | Change (YOY) |
|---|---|---|---|---|
| Adjusted EPS | $0.91 | $0.89 | $0.87 | 5% |
| Revenue | $4.944 billion | $4.98 billion | $4.95 billion | (0.1%) |
| Gross profit margin | 60.3% | -- | 59.6% | 0.7 pps |
| Organic sales growth | 4.3% | -- | 7% | -- |
Source: Colgate-Palmolive. Note: Analyst consensus estimates for the quarter provided by FactSet. YOY = Year over year.
Business Overview of Colgate-Palmolive
Colgate-Palmolive is a leading consumer goods company with a product range spanning oral care, personal care, home care, and pet nutrition. Its flagship brands include Colgate toothpaste and Hill’s Science Diet pet foods. The company's strong market presence makes it a significant player in the global consumer market.
Recently, Colgate-Palmolive has focused on diversifying its product portfolio and enhancing its brand positioning. Perseverance in areas like sustainability and innovation has been pivotal. Its environmental initiatives, such as creating recyclable packaging, align with global trends and consumer preferences.
Quarterly and Full-Year Highlights and Challenges
During Q4 2024, Colgate-Palmolive retained substantial market shares in its core segments. It held a 41.4% share in toothpaste and 32.2% in manual toothbrushes. These numbers underscore its strength despite competitive pressures.
The company increased its advertising spend by 15% year over year, which supported product innovation and brand health. Meanwhile, it marked progress in sustainable practices by converting over half of its toothpaste SKUs to recyclable packaging, signaling a commitment to environmental goals.
Geographically, Colgate faced a mixed performance. Sales in North America dipped by 1% due to pricing pressures, but the international markets, notably Europe and Asia Pacific, cushioned some of the impact with growth. The variation in performance reveals the complexity of operations across diverse markets.
Challenges such as supply chain dependencies and economic volatility in emerging markets continued to affect the business. Despite these hurdles, Colgate managed to improve its gross profit margin to 60.3%, up from 59.6%, suggesting successful cost control strategies.
Competitive headwinds, particularly from private labels in North America, were evident. Coupled with currency fluctuations in new markets, these factors necessitate sustained strategic attention to maintain market leadership.
Looking Ahead
For 2025, Colgate-Palmolive forecasts flat net sales influenced by adverse currency exchange rates but expects organic sales growth between 3% and 5%. The guidance reflects its strategic focus on ongoing innovation and operational efficiency, and it includes the impact of the company’s planned exit from private-label pet nutrition over the course of 2025.
Management outlined ongoing investment in advertising and consumer engagement as core to its market leadership goals. Advances towards sustainability, such as aiming for a zero-waste operation by 2025, are strategic priorities that could bolster consumer trust and brand loyalty in the long term.
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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends Colgate-Palmolive. The Motley Fool has a disclosure policy.
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