Colgate-Palmolive beat first-quarter sales and profit estimates on Friday, as resilient demand for its essentials such as oral and personal care products overcame rising prices and tariff uncertainties.
Why it’s Important
Colgate-Palmolive joined peers such as Procter & Gamble and Kimberly-Clark in posting upbeat sales growth, unlike the broader retail sector that has been struggling with a slowdown in discretionary spending.
The Trump administration’s shifting trade policies have forced several companies to hike prices, pushing shoppers to focus on essentials.
Context
Colgate has raised prices over the past few quarters to counter tariff impacts and higher advertising and marketing costs. The marketing campaigns have helped increase the sales.
The company, which makes U.S. toothpaste in Mexico, now expects incremental costs from tariffs to be about $75 million, lower than $200 million projected earlier, as it expects more favourable rates.
It also outlined a five-year cost cutting plan.
By the Numbers
Sales rose 8% in Africa and 7.8% in Europe from a year ago.
The company expects organic sales growth to be at the low end of its forecast range of 2% to 4%.
Its prices rose 2% in the quarter ended June 30 and total organic volumes slipped 0.2%, compared with a year ago.
Colgate-Palmolive’s adjusted profit of 92 cents per share in the first quarter topped analysts’ estimates of 90 cents per share, according to data compiled by LSEG.
It posted quarterly net sales of $5.11 billion, beating estimates of $5.03 billion.
Market Reaction
Shares of the company were flat in premarket trading.
By Anuja Bharat Mistry; Editing by Sahal Muhammed
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