Colgate-Palmolive (CL) Reports In-Line Q3 EPS

Colgate-Palmolive (NYSE: CL) reported Q3 EPS of $0.72, in-line with the analyst estimate of $0.72. Revenue for the quarter came in at $3.85 billion versus the consensus estimate of $3.89 billion.

Ian Cook, Chairman and Chief Executive Officer, commented on the third quarter results, “The third quarter was a challenging one with category growth rates remaining soft in many markets and unfavorable movements in foreign exchange. Net sales decreased 3.0% and organic sales decreased 0.5%, primarily due to market volatility in Brazil and trade inventory reductions in China.

“While the pricing environment remains difficult given competitive and retailer dynamics, we are pleased we delivered positive pricing this quarter, which partially offset higher commodity and logistics costs.

“Advertising investment increased as a percent to sales versus third quarter 2017 and we continue to plan for increased advertising investment as a percent to sales for the balance of the year in support of new products, our base businesses and longer-term consumption-building activities.

“Colgate’s leadership of the global toothpaste market continued during the quarter with our global market share at 41.9% year to date. Our global leadership in manual toothbrushes also continued with Colgate’s global market share in that category at 32.2% year to date.”

Mr. Cook continued, “As we look ahead, while uncertainty in global markets and category growth worldwide remain challenging, we are maintaining our heightened focus on brand building and increased productivity while accelerating our change efforts.�Based on current spot rates, for the fourth quarter we expect a low-single-digit net sales decrease due to foreign exchange and low-single-digit organic sales growth.

“For 2018, on a GAAP basis, based on current spot rates and including the impact of the Global Growth and Efficiency Program, we expect lower gross margin and double-digit earnings per share growth versus 2017.

“Excluding charges resulting from the Global Growth and Efficiency Program, charges related to U.S. tax reform and the benefit from a foreign tax matter in 2018, based on current spot rates, we are planning for a year of continued strong operating cash flow, lower gross margin, sustained advertising investment and 3-4% earnings per share growth versus 2017.”

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