Colgate-Palmolive Q3 Beats Market, Lifts FY24 View; But Stock Drops

(RTTNews) - Consumer products major Colgate-Palmolive Co. reported Friday higher third-quarter results, above market estimates, and also lifted the lower end of its fiscal 2024 earnings and sales growth outlook range. Meanwhile, the shares were losing around 3 percent in early morning trading on the NYSE.

Noel Wallace, Chairman, President and Chief Executive Officer, said, "Our strong results this quarter and year to date add to our confidence that we are executing the right strategies to deliver on our updated 2024 organic sales and Base Business earnings growth expectations, drive cash flow and generate consistent, compounded earnings per share growth."

For fiscal 2024, the company now expects base business or adjusted earnings per share growth of 10 percent to 11 percent, compared to previously expected growth of 8 percent to 11 percent.

On a reported basis, the company still expects gross profit margin expansion, increased advertising investment and double-digit earnings per share growth.

Further, the company now projects net sales growth of 3 percent to 5 percent, versus 2 percent to 5 percent growth expected previously, and organic sales growth of 7 percent to 8 percent, up from 6 percent to 8 percent expected earlier.

In its third quarter, earnings came in at $737 million, higher than $708 million a year ago. Earnings per share increased 5 percent to $0.90 from prior year's $0.86.

Base Business or adjusted earnings were $750 million or $0.91 per share for the period, compared to $0.86 per share last year.

Analysts on average had expected the company to earn $0.88 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Gross profit margin increased 260 basis points to 61.1 percent. Base Business Gross profit margin increased 270 basis points to 61.3 percent.

The company's Net sales for the quarter rose 2.4 percent to $5.033 billion from $4.915 billion last year. The Street was looking for sales of $4.96 billion.

Organic sales increased 6.8 percent driven by a healthy balance of volume growth and higher pricing.

In the quarter, North America sales dropped 2.1 percent and Latin America sales fell 3.2 percent, while all other regions recorded sales growth.

On the NYSE, Colgate-Palmolive shares were trading at $97.05, down 2.70 percent.

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