Colgate-Palmolive (CL) Tops Q4 EPS by 1c, Comments on Outlook

Colgate-Palmolive (NYSE: CL) reported Q4 EPS of $0.74, $0.01 better than the analyst estimate of $0.73. Revenue for the quarter came in at $3.81 billion versus the consensus estimate of $3.78 billion.

Ian Cook, Chairman and Chief Executive Officer, commented on the fourth quarter results, “We are pleased with the improvement in organic sales growth this quarter, driven by 2.5% positive pricing.

“Colgate’s leadership of the global toothpaste market continued during the quarter with our global market share at 42.0% year to date. Our global leadership in manual toothbrushes also continued with Colgate’s global market share in that category at 32.3% year to date.”

Mr. Cook continued, “Looking ahead to 2019, based on current spot rates, we expect net sales to be flat to up low-single-digits, with organic sales growth of 2% to 4% as we are planning for increased investment behind our brands, higher pricing and strong innovation, led by the relaunches of Colgate Total and Hill’s Science Diet and our continued focus on naturals.

“We are also planning to invest in expanding our portfolio offerings by bringing brands like elmex and meridol into new markets and by broadening our e-commerce offerings, including direct to consumer, to build on our strong e-commerce growth in 2018. We also plan to continue to increase our investment behind our professional skin care businesses, Elta MD and PCA Skin.

“On a GAAP basis, based on current spot rates, we are planning for a year of gross margin expansion and expect a low-single-digit decline in earnings per share.

"Excluding charges resulting from the Global Growth and Efficiency Program in both 2018 and 2019, the charge related to U.S. tax reform in 2018 and the benefit from a foreign tax matter in 2018, based on current spot rates, we are planning for a year of gross margin expansion, increased advertising investment and a mid-single-digit decline in earnings per share. Our outlook reflects an increase in raw material prices, an increase in our tax rate year-over-year and the uncertainty surrounding the global economy, exchange rates and pricing.

“Given our plans to increase investment behind our brands to drive acceleration in organic sales growth, we believe our earnings outlook for 2019 is appropriate.”

For earnings history and earnings-related data on Colgate-Palmolive (CL) click here.

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