Colgate-Palmolive Company (NYSE:CL):
- Net sales increased 6.2%; Organic sales* increased 9.8%
- GAAP EPS increased 84% to $0.83; Base Business EPS* increased
18% to $0.86
- GAAP Gross profit margin and Base Business Gross profit margin*
increased 310 basis points to 60.0%
- Net cash provided by operations was $681 million for the first
three months of 2024
- Colgate’s leadership in toothpaste continued with its global
market share at 41.3% year to date
- Colgate’s leadership in manual toothbrushes continued with its
global market share at 31.7% year to date
- The Company updated its financial guidance for full year
2024
First Quarter Total Company Results
(GAAP)
($ in millions except per share
amounts)
2024
2023
Change
Net Sales
$5,065
$4,770
+6.2%
EPS (diluted)
$0.83
$0.45
+84%
First Quarter Total Company Results
(Base Business - Non-GAAP)*
2024
2023
Change
Organic Sales Growth
+9.8%
Base Business EPS (diluted)
$0.86
$0.73
+18%
*Indicates a non-GAAP financial measure.
Please refer to “Non-GAAP Financial Measures” later in this release
for definitions of non-GAAP financial measures and to “Table 5 -
Geographic Sales Analysis Percentage Changes” and “Table 6 -
Non-GAAP Reconciliations” included with this release for a
reconciliation of these non-GAAP financial measures to the related
GAAP measures.
Colgate-Palmolive Company (NYSE:CL) today reported results for
first quarter 2024. Noel Wallace, Chairman, President and Chief
Executive Officer, commented on the Base Business first quarter
results, “We are very pleased to have started 2024 with another
quarter of strong top and bottom line performance as we continued
to execute our strategy successfully. Net sales increased 6.2% and
organic sales grew 9.8%, with organic sales growth in every
division and across all categories. We are particularly pleased to
have delivered double-digit growth in operating profit, net income
and earnings per share for the third consecutive quarter while
still investing for the long-term health of our business.
“The strong gross and operating margin expansion in the quarter
funded a 16% increase in advertising and we expect strong levels of
brand investment over the balance of 2024. We also continued to
invest behind building and scaling the capabilities needed to drive
our growth going forward, in areas like innovation, digital, data
and analytics, revenue growth management and marketing
effectiveness.
“Our strong growth momentum and great start to the year add to
our confidence that we are executing the right strategies to
deliver on our updated 2024 financial targets and generate
consistent, compounded earnings per share growth.”
Full Year 2024 Guidance
Based on current spot rates:
- The Company is raising its net sales growth guidance to 2% to
5% (versus 1% to 4% previously) including a mid-single-digit
negative impact from foreign exchange (versus low-single-digit
negative impact previously).
- The Company is raising its organic sales growth guidance to 5%
to 7% (versus 3% to 5% previously).
- On a GAAP basis, the Company still expects gross profit margin
expansion, increased advertising investment and double-digit
earnings-per-share growth.
- On a non-GAAP (Base Business) basis, the Company still expects
gross profit margin expansion, increased advertising investment and
mid to high-single-digit earnings-per-share growth.
Divisional Performance
See attached "Table 5 - Geographic Sales Analysis Percentage
Changes" and "Table 4 - Segment Information" for additional
information on net sales and operating profit by division.
First Quarter Sales Growth By
Division (% change 1Q 2024 vs. 1Q 2023 except % of Total
Company Sales)
% of Total Company Sales
Net Sales
Organic Sales*
As Reported Volume
Organic Volume
Pricing
FX
North America
20%
+4.0%
+4.0%
+2.9%
+2.9%
+1.2%
—%
Latin America
25%
+16.5%
+25.9%
+6.2%
+6.2%
+19.7%
-9.4%
Europe
14%
+9.5%
+7.2%
+3.1%
+3.1%
+4.1%
+2.3%
Asia Pacific
14%
-1.5%
+1.5%
-2.9%
-2.9%
+4.4%
-3.0%
Africa/Eurasia
5%
-4.5%
+16.2%
+3.9%
+3.9%
+12.2%
-20.7%
Hill's
22%
+3.9%
+4.2%
-3.9%
-3.9%
+8.2%
-0.3%
Total Company
100%
+6.2%
+9.8%
+1.3%
+1.3%
+8.5%
-3.6%
Note: Table may not sum due to
rounding.
*Indicates a non-GAAP financial measure.
Please refer to “Non-GAAP Financial Measures” later in this release
for definitions of non-GAAP financial measures and to “Table 5 -
Geographic Sales Analysis Percentage Changes” included with this
release for a reconciliation of these non-GAAP financial measures
to the related GAAP measures.
First Quarter Operating Profit By
Division ($ in millions)
1Q 2024
% Change vs 1Q 2023
% to Net Sales
Change in basis points vs 1Q 2023
% to Net Sales
North America
$222
15%
22.3%
+220
Latin America
$405
29%
32.3%
+300
Europe
$144
24%
20.3%
+250
Asia Pacific
$207
2%
28.5%
+110
Africa/Eurasia
$66
-3%
23.9%
+30
Hill's
$199
9%
18.0%
+80
Total Company, As Reported
$1,047
15%
20.7%
+160
Total Company, Base Business*
$1,083
15%
21.4%
+170
*Indicates a non-GAAP financial measure.
Please refer to “Non-GAAP Financial Measures” later in this release
for definitions of non-GAAP financial measures and to “Table 6 -
Non-GAAP Reconciliations” included with this release for a
reconciliation of these non-GAAP financial measures to the related
GAAP measures.
Prepared Materials and Webcast
Information
At approximately 7:00 a.m. ET today, Colgate will post its
prepared materials (in PDF format) regarding first quarter results
to the Investor Center section of its website at
https://investor.colgatepalmolive.com/events-and-presentations.
At 8:30 a.m. ET today, Colgate will host a conference call
regarding first quarter results. To access this call as a webcast,
please go to Colgate’s website at www.colgatepalmolive.com.
About Colgate-Palmolive
Colgate-Palmolive Company is a caring, innovative growth company
that is reimagining a healthier future for all people, their pets
and our planet. Focused on Oral Care, Personal Care, Home Care and
Pet Nutrition, we sell our products in more than 200 countries and
territories under brands such as Colgate, Palmolive, elmex, hello,
meridol, Sorriso, Tom’s of Maine, EltaMD, Filorga, Irish Spring,
Lady Speed Stick, PCA SKIN, Protex, Sanex, Softsoap, Speed Stick,
Ajax, Axion, Fabuloso, Murphy, Soupline and Suavitel, as well as
Hill’s Science Diet and Hill’s Prescription Diet. The Company is
recognized for its leadership and innovation in promoting
sustainability and community wellbeing, including its achievements
in decreasing plastic waste and promoting recyclability, saving
water, conserving natural resources and improving children’s oral
health through the Colgate Bright Smiles, Bright Futures program,
which has reached approximately 1.7 billion children and their
families since 1991. For more information about Colgate’s global
business and how the Company is building a future to smile about,
visit www.colgatepalmolive.com. CL-E
Market Share Information
Management uses market share information as a key indicator to
monitor business health and performance. References to market share
in this press release are based on a combination of consumption and
market share data provided by third-party vendors, primarily
Nielsen, and internal estimates. All market share references
represent the percentage of the dollar value of sales of our
products, relative to all product sales in the category in the
countries in which the Company competes and purchases data
(excluding Venezuela from all periods).
Market share data is subject to limitations on the availability
of up-to-date information. In particular, market share data is
currently not generally available for certain retail channels, such
as eCommerce and certain club retailers and discounters. The
Company measures year-to-date market shares from January 1 of the
relevant year through the most recent period for which market share
data is available, which typically reflects a lag time of one or
two months. The Company believes that the third-party vendors it
uses to provide data are reliable, but it has not verified the
accuracy or completeness of the data or any assumptions underlying
the data. In addition, market share information reported by the
Company may be different from market share information reported by
other companies due to differences in category definitions, the use
of data from different countries, internal estimates and other
factors.
Cautionary Statement on Forward-Looking
Statements
This press release and the related webcast may contain
forward-looking statements (as that term is defined in the U.S.
Private Securities Litigation Reform Act of 1995 or by the
Securities and Exchange Commission (SEC) in its rules, regulations
and releases) that set forth anticipated results based on
management’s current plans and assumptions. Such statements may
relate, for example, to sales or volume growth, net selling price
increases, organic sales growth, profit or profit margin levels,
earnings per share levels, financial goals, the impact of foreign
exchange, the impact of the war in Ukraine, the impact of the
Israel-Hamas war, cost-reduction plans (including the 2022 Global
Productivity Initiative), tax rates, interest rates, new product
introductions, digital capabilities, commercial investment levels,
acquisitions, divestitures, share repurchases or legal or tax
proceedings, among other matters. These statements are made on the
basis of the Company’s views and assumptions as of this time and
the Company undertakes no obligation to update these statements
whether as a result of new information, future events or otherwise,
except as required by law or by the rules and regulations of the
SEC. Moreover, the Company does not, nor does any other person,
assume responsibility for the accuracy and completeness of these
statements. The Company cautions investors that any such
forward-looking statements are not guarantees of future performance
and that actual events or results may differ materially from those
statements. For more information about factors that could impact
the Company’s business and cause actual results to differ
materially from forward-looking statements, investors should refer
to the Company’s filings with the SEC (including, but not limited
to, the information set forth under the captions “Risk Factors” and
“Cautionary Statement on Forward-Looking Statements” in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2023 and subsequent filings with the SEC). Copies of these
filings may be obtained upon request from the Company’s Investor
Relations Department or on the Company’s website at
www.colgatepalmolive.com.
Non-GAAP Financial
Measures
The following provides definitions and other information
regarding the non-GAAP financial measures used in this press
release and the related prepared materials and webcast, which may
not be the same as or comparable to similar measures presented by
other companies:
- Base Business: Base Business refers to non-GAAP measures of
operating results that exclude certain items. Base Business
operating results exclude, as applicable, charges related to an
ERISA litigation matter, the 2022 Global Productivity Initiative
and product recall costs.
- Organic sales growth: Net sales growth excluding the impact of
foreign exchange, acquisitions and divestments.
- Free cash flow before dividends: Net cash provided by
operations less Capital expenditures.
This press release discusses Net sales growth (GAAP) and Organic
sales growth (non-GAAP). Management believes the organic sales
growth measure provides investors and analysts with useful
supplemental information regarding the Company’s underlying sales
trends by presenting sales growth excluding the external factor of
foreign exchange as well as the impact from acquisitions and
divestments. See “Geographic Sales Analysis Percentage Changes” for
the three months ended March 31, 2024 versus 2023 included with
this release for a comparison of Organic sales growth to Net sales
growth in accordance with GAAP.
Selling, general and administrative expenses, Selling, general
and administrative expenses as a percentage of Net sales, Other
(income) expense, net, Operating profit, Operating profit margin,
Non-service related postretirement costs, Effective income tax
rate, Net income attributable to Colgate-Palmolive Company and
Diluted earnings per common share are disclosed on both an as
reported (GAAP) and Base Business (non-GAAP) basis. These non-GAAP
financial measures exclude items that, either by their nature or
amount, management would not expect to occur as part of the
Company’s normal business on a regular basis, such as restructuring
charges, charges for certain litigation and tax matters,
acquisition-related costs, gains and losses from certain
divestitures and certain other unusual, non-recurring items.
Investors and analysts use these financial measures in assessing
the Company’s business performance, and management believes that
presenting these financial measures on a non-GAAP basis provides
them with useful supplemental information to enhance their
understanding of the Company’s underlying business performance and
trends. These non-GAAP financial measures also enhance the ability
to compare period-to-period financial results. See “Non-GAAP
Reconciliations” for the three months ended March 31, 2024 and 2023
included with this release for a reconciliation of these financial
measures to the related GAAP measures.
The Company uses these financial measures internally in its
budgeting process, to evaluate segment and overall operating
performance and as factors in determining compensation. While the
Company believes that these financial measures are useful in
evaluating the Company’s underlying business performance and
trends, this information should be considered as supplemental in
nature and is not meant to be considered in isolation or as a
substitute for the related financial information prepared in
accordance with GAAP.
As management uses free cash flow before dividends to evaluate
the Company’s ability to satisfy current and future obligations,
pay dividends, fund future business opportunities and repurchase
stock, the Company believes that it provides useful information to
investors. Free cash flow before dividends is not a measure of cash
available for discretionary expenditures since the Company has
certain non-discretionary obligations such as debt service that are
not deducted from the measure. See “Condensed Consolidated
Statements of Cash Flows” for the three months ended March 31, 2024
and 2023 for a comparison of free cash flow before dividends to Net
cash provided by operations as reported in accordance with
GAAP.
(See attached tables for first quarter
results.)
Table 1
Colgate-Palmolive
Company
Condensed Consolidated
Statements of Income
For the Three Months Ended
March 31, 2024 and 2023
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
2024
2023
Net sales
$
5,065
$
4,770
Cost of sales
2,026
2,058
Gross profit
3,039
2,712
Gross profit margin
60.0
%
56.9
%
Selling, general and administrative
expenses
1,916
1,758
Other (income) expense, net
76
45
Operating profit
1,047
909
Operating profit margin
20.7
%
19.1
%
Non-service related postretirement
costs
22
294
Interest (income) expense, net
58
54
Income before income taxes
967
561
Provision for income taxes
238
147
Effective tax rate
24.6
%
26.2
%
Net income including noncontrolling
interests
729
414
Less: Net income attributable to
noncontrolling interests
46
42
Net income attributable to
Colgate-Palmolive Company
$
683
$
372
Earnings per common share
Basic
$
0.83
$
0.45
Diluted
$
0.83
$
0.45
Supplemental Income Statement
Information
Average common shares outstanding
Basic
822.8
831.4
Diluted
825.9
833.0
Advertising
$
672
$
579
Table 2
Colgate-Palmolive
Company
Condensed Consolidated Balance
Sheets
As of March 31, 2024, December
31, 2023 and March 31, 2023
(Dollars in Millions)
(Unaudited)
March 31,
December 31,
March 31,
2024
2023
2023
Cash and cash equivalents
$
1,079
$
966
$
867
Receivables, net
1,813
1,586
1,590
Inventories
1,914
1,934
2,110
Other current assets
834
793
899
Property, plant and equipment, net
4,497
4,582
4,363
Goodwill
3,341
3,410
3,375
Other intangible assets, net
1,837
1,887
1,918
Other assets
1,256
1,235
1,051
Total assets
$
16,571
$
16,393
$
16,173
Total debt
$
8,689
$
8,549
$
8,907
Other current liabilities
4,776
4,411
4,404
Other non-current liabilities
2,489
2,476
2,437
Total liabilities
15,954
15,436
15,748
Total Colgate-Palmolive Company
shareholders’ equity
230
609
(6
)
Noncontrolling interests
387
348
431
Total liabilities and equity
$
16,571
$
16,393
$
16,173
Supplemental Balance Sheet
Information
Debt less cash, cash equivalents and
marketable securities(1)
$
7,379
$
7,404
$
7,764
Working capital % of sales
(2.2
)%
(1.4
)%
(0.4
)%
Note:
(1) Marketable securities of $231, $179
and $276 as of March 31, 2024, December 31, 2023 and March 31,
2023, respectively, are included in Other current assets.
Table 3
Colgate-Palmolive
Company
Condensed Consolidated
Statements of Cash Flows
For the Three Months Ended
March 31, 2024 and 2023
(Dollars in Millions)
(Unaudited)
2024
2023
Operating Activities
Net income including noncontrolling
interests
$
729
$
414
Adjustments to reconcile Net income
including noncontrolling interests to Net cash provided by
operations:
Depreciation and amortization
150
128
ERISA litigation matter
—
267
Restructuring and termination benefits,
net of cash
30
(7
)
Stock-based compensation expense
19
14
Deferred income taxes
12
(20
)
Cash effects of changes in:
Receivables
(252
)
(57
)
Inventories
11
(24
)
Accounts payable and other accruals
8
(2
)
Other non-current assets and
liabilities
(26
)
22
Net cash provided by (used in)
operations
681
735
Investing Activities
Capital expenditures
(126
)
(163
)
Purchases of marketable securities and
investments
(139
)
(112
)
Proceeds from sale of marketable
securities and investments
78
14
Other investing activities
(6
)
(3
)
Net cash provided by (used in) investing
activities
(193
)
(264
)
Financing Activities
Short-term borrowing (repayment) less than
90 days, net
728
(927
)
Principal payments on debt
(500
)
(500
)
Proceeds from issuance of debt
1
1,495
Dividends paid
(394
)
(390
)
Purchases of treasury shares
(509
)
(180
)
Proceeds from exercise of stock
options
336
122
Other financing activities
(23
)
5
Net cash provided by (used in) financing
activities
(361
)
(375
)
Effect of exchange rate changes on Cash
and cash equivalents
(14
)
(4
)
Net increase (decrease) in Cash and cash
equivalents
113
92
Cash and cash equivalents at beginning of
the period
966
775
Cash and cash equivalents at end of the
period
$
1,079
$
867
Supplemental Cash Flow
Information
Free cash flow before dividends (Net cash
provided by operations less Capital expenditures)
Net cash provided by operations
$
681
$
735
Less: Capital expenditures
(126
)
(163
)
Free cash flow before dividends
$
555
$
572
Income taxes paid
$
150
$
171
Interest paid
$
123
$
94
Table 4
Colgate-Palmolive
Company
Segment Information
For the Three Months Ended
March 31, 2024 and 2023
(Dollars in Millions)
(Unaudited)
Three Months Ended March 31,
2024
2023
Net Sales
Oral, Personal and Home Care
North America
$
997
$
958
Latin America
1,253
1,075
Europe
711
650
Asia Pacific
727
738
Africa/Eurasia
276
288
Total Oral, Personal and Home Care
3,963
3,709
Pet Nutrition
1,102
1,061
Total Net Sales
$
5,065
$
4,770
Three Months Ended March 31,
2024
2023
Operating Profit
Oral, Personal and Home Care
North America
$
222
$
193
Latin America
405
315
Europe
144
116
Asia Pacific
207
202
Africa/Eurasia
66
68
Total Oral, Personal and Home Care
1,044
894
Pet Nutrition
199
183
Corporate(1)
(196
)
(168
)
Total Operating Profit
$
1,047
$
909
Note: Table may not sum due to
rounding.
(1) Corporate operations include costs
related to stock options and restricted stock units, research and
development costs, Corporate overhead costs, restructuring and
related implementation charges and gains and losses on sales of
non-core product lines and assets.
Corporate Operating profit (loss) for the
three months ended March 31, 2024 included charges resulting from
the 2022 Global Productivity Initiative of $36.
Corporate Operating profit (loss) for the
three months ended March 31, 2023 included product recall costs of
$25 and charges resulting from the 2022 Global Productivity
Initiative of $5.
Table 5
Colgate-Palmolive
Company
Geographic Sales Analysis
Percentage Changes
For the Three Months Ended
March 31, 2024 vs. 2023
(Unaudited)
COMPONENTS OF SALES
CHANGE
Pricing
Coupons
Sales
Consumer &
Change
Organic
As Reported
Organic
Trade
Foreign
Region
As
Reported
Sales
Change
Volume
Volume
Incentives
Exchange
Total Company
6.2
%
9.8
%
1.3
%
1.3
%
8.5
%
(3.6
)%
North America
4.0
%
4.0
%
2.9
%
2.9
%
1.2
%
—
%
Latin America
16.5
%
25.9
%
6.2
%
6.2
%
19.7
%
(9.4
)%
Europe
9.5
%
7.2
%
3.1
%
3.1
%
4.1
%
2.3
%
Asia Pacific
(1.5
)%
1.5
%
(2.9
)%
(2.9
)%
4.4
%
(3.0
)%
Africa/Eurasia
(4.5
)%
16.2
%
3.9
%
3.9
%
12.2
%
(20.7
)%
Total CP Products
6.8
%
11.4
%
2.8
%
2.8
%
8.6
%
(4.5
)%
Hill’s
3.9
%
4.2
%
(3.9
)%
(3.9
)%
8.2
%
(0.3
)%
Emerging Markets(1)
7.5
%
15.7
%
2.2
%
2.2
%
13.5
%
(8.1
)%
Developed Markets
5.1
%
4.9
%
0.6
%
0.6
%
4.3
%
0.2
%
Note: Table may not sum due to
rounding.
(1) Emerging Markets include Latin
America, Asia (excluding Japan), Africa/Eurasia and Central
Europe.
Table 6
Colgate-Palmolive
Company
Non-GAAP
Reconciliations
For the Three Months Ended
March 31, 2024 and 2023
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
Selling, General and Administrative
Expenses
2024
2023
Selling, general and administrative
expenses, GAAP
$
1,916
$
1,758
2022 Global Productivity Initiative
(1
)
—
Selling, general and administrative
expenses, non-GAAP
$
1,915
$
1,758
Other (Income) Expense, Net
2024
2023
Other (income) expense, net, GAAP
$
76
$
45
2022 Global Productivity Initiative
(35
)
(5
)
Product recall costs
—
(25
)
Other (income) expense, net, non-GAAP
$
41
$
15
Operating Profit
2024
2023
% Change
Operating profit, GAAP
$
1,047
$
909
15
%
2022 Global Productivity Initiative
36
5
Product recall costs
—
25
Operating profit, non-GAAP
$
1,083
$
939
15
%
Basis Point
Operating Profit Margin
2024
2023
Change
Operating profit margin, GAAP
20.7
%
19.1
%
160
2022 Global Productivity Initiative
0.7
%
0.1
%
Product recall costs
—
%
0.5
%
Operating profit margin, non-GAAP
21.4
%
19.7
%
170
Non-Service Related Postretirement
Costs
2024
2023
Non-service related postretirement costs,
GAAP
$
22
$
294
ERISA litigation matter
—
(267
)
2022 Global Productivity Initiative
—
(1
)
Non-service related postretirement costs,
non-GAAP
$
22
$
26
Table 6
Continued
Colgate-Palmolive
Company
Non-GAAP
Reconciliations
For the Three Months Ended
March 31, 2024 and 2023
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
2024
Income Before Income
Taxes
Provision For Income
Taxes(1)
Net Income
Including Noncontrolling Interests
Less: Income Attributable to
Noncontrolling Interests
Net Income Attributable
To Colgate- Palmolive Company
Effective Income Tax
Rate(2)
Diluted Earnings Per
Share
As Reported GAAP
$
967
$
238
$
729
$
46
$
683
24.6
%
$
0.83
2022 Global Productivity Initiative
36
6
30
—
30
(0.3
)%
0.03
Non-GAAP
$
1,003
$
244
$
759
$
46
$
713
24.3
%
$
0.86
2023
Income Before Income
Taxes
Provision For Income
Taxes(1)
Net Income
Including Noncontrolling Interests
Less: Income Attributable to
Noncontrolling Interests
Net Income Attributable
To Colgate- Palmolive Company
Effective Income Tax
Rate(2)
Diluted Earnings Per
Share
As Reported GAAP
$
561
$
147
$
414
$
42
$
372
26.2
%
$
0.45
ERISA litigation matter
267
55
212
—
212
(1.8
)%
0.25
Product recall costs
25
6
19
—
19
—
%
0.02
2022 Global Productivity Initiative
6
1
5
—
5
(0.1
)%
0.01
Non-GAAP
$
859
$
209
$
650
$
42
$
608
24.3
%
$
0.73
The impact of non-GAAP adjustments may not
necessarily equal the difference between “GAAP” and “non-GAAP” as a
result of rounding.
Notes:
(1) The income tax effect on non-GAAP
items is calculated based upon the tax laws and statutory income
tax rates applicable in the tax jurisdiction(s) of the underlying
non-GAAP adjustment.
(2) The impact of non-GAAP items on the
Company’s effective tax rate represents the difference in the
effective tax rate calculated with and without the non-GAAP
adjustment on Income before income taxes and Provision for income
taxes.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240426187490/en/
Investor Relations: investor_relations@colpal.com
Communications: colgate_palmolive_media_inquiry@colpal.com
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