Colgate-Palmolive closed a strong third quarter and raised its annual forecast

By: Trademagazin Date: 2024. 10. 25. 11:59

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Colgate-Palmolive reported better-than-expected third-quarter results and raised the lower end of its annual sales and profit forecasts as a result. Despite the increase in the cost of living, the demand for the company’s oral care and hygiene products remained stable, which was managed to be maintained with repeated price increases, according to Reuters, Péncentrum reports.

Growing demand for basic products

Colgate-Palmolive is one of the consumer goods companies that has been favorably affected by the rise in the cost of living. Consumers today are focusing on the most essential products, relegating non-essential expenses to the background, which has boosted demand for Colgate-Palmolive’s oral care and hygiene products. The company implemented several price increases this year in order to offset raw material and packaging costs, which significantly increased the company’s profit margin.

Increased annual forecast

The company raised its sales growth forecast for 2024 from the previous estimate of 2-5% to 3-5%, while it increased its adjusted profit growth expectation to 10-11% compared to the previous 8-11%. Colgate-Palmolive’s third-quarter revenue reached $5.03 billion, beating analysts’ expectations of $5 billion. Adjusted earnings per share were 91 cents, which also exceeded analysts’ expectations of 89 cents.

Increasing profit margin despite rising raw material costs

Colgate-Palmolive increased its profit margin by 260 basis points to 61.1%, thanks to an effective price increase strategy that offset rising raw material and packaging costs. By contrast, Kimberly-Clark, which also makes personal hygiene products, was forced to cut its annual sales forecast as consumers switched to cheaper alternatives.