Colgate-Palmolive beats quarterly estimates on steady demand for essentials

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. (solidcolours / Istock.com)

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.

U.S. President Donald 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 US$75 million, lower than $200 million projected earlier, as it expects more favorable rates.

It also outlined a five-year cost cutting plan.

By the numbers

Sales rose eight per cent in Africa and 7.8 per cent in Europe from a year ago.

The company expects organic sales growth to be at the low end of its forecast range of two to four per cent.

Its prices rose two per cent in the quarter ended June 30 and total organic volumes slipped 0.2 per cent, 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.

(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Sahal Muhammed)