CL Colgate Palmolive Co

By Aisha Al-Muslim 

Colgate-Palmolive Co. posted weaker sales in the latest quarter despite efforts to raise prices and the consumer-products company expects foreign-exchange rates and emerging markets to present challenges in the months ahead.

Net sales for the maker of Irish Spring soap, Ajax cleanser, and Suavitel fabric softener dropped 3% from a year earlier to $3.85 billion. Organic sales, a closely watched metric that strips out currency moves, acquisitions and divestitures, fell 0.5% in the third quarter, primarily due to market volatility in Brazil and trade inventory reductions in China.

Colgate-Palmolive said pricing increased 1% from a year ago, but foreign-exchange shaved off 4% of sales.

Colgate-Palmolive's profit fell 14% to $523 million, or 60 cents a share. Excluding costs related to restructuring and an adjustment related to U.S. tax law changes, earnings were 72 cents a share, in-line with what analysts polled by Refinitiv expected.

The company also revised its expectations on full-year earnings growth. Colgate now expects a 3% to 4% rise in adjusted per-share earnings from 2017, compared with its prior forecast of mid-single-digit growth.

Shares fell 5.7% to $60.18 in early trading Friday. Shares are down more than 15% over the last 12 months.

Chief Executive Ian Cook in prepared remarks called the third quarter a "challenging one" and said that uncertainty in global markets and world-wide category growth remain an issue. He said the company still plans to increase advertising spending for the rest of the year to promote new products and its core brands.

In the third quarter, Colgate's North America and Hill's Pet Nutrition segments were bright spots for the company. North America net sales increased 8%, aided by a 6% contribution from the acquisition of professional skin-care brands. In January the company closed a roughly $730 million purchase of PCA Skin and EltaMD.

Sales for pet-food brand Hill's rose 1.5% on stronger volume and higher prices.

Latin America -- one of the company's largest segments -- posted the largest decline in sales, as fewer items were sold and negative foreign-exchange hurt results.

Several consumer-products makers, including rival Procter & Gamble Co. and Kimberly-Clark Corp., have also raised prices on some of their products to offset foreign-exchange and commodity pressures. The companies have dealt with rising costs for commodities like pulp, which is the material used in tissues and toilet paper, polymer and other raw materials.

Earlier this week, Kimberly-Clark said it was switching chief executives in the midst of a restructuring program. The maker of Kleenex tissues, Scott toilet paper and Huggies said third-quarter sales fell 2% to $4.58 billion and cut its earnings guidance for the full year.

Last week, Procter & Gamble booked its strongest quarterly sales gains in five years on increased demand in the U.S. and abroad, but forecast overall sales for the full year would be down 2% due to foreign-exchange headwinds.

For the fourth quarter, Colgate-Palmolive said it expects sales to fall in the low-single digits as unfavorable foreign-exchange offsets organic sales growth.

Write to Aisha Al-Muslim at aisha.al-muslim@wsj.com

(END) Dow Jones Newswires

October 26, 2018 10:30 ET (14:30 GMT)

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