Conservative · Stocks to Consider and Updates

Colgate-Palmolive Reports First Quarter Results; Reaffirms Outlook

Oral health and household products company Colgate-Palmolive (NYSE: CL – $70.69) reported adjusted per share earnings of $0.67, ahead of the $0.66 consensus and seven cents less than last year. Sales fell 3% to $3.884 billion, a whisker ahead of the $3.862 billion estimate figure. Gross profit margins, however, declined to 58.9% from 60.2%. Global unit volume rose 1%, as pricing increased 2%.  By region and Hills Pet:

  • North America net sales increased 3.0% with unit volume up 2.0%, pricing increasing 1.5% and foreign exchange a negative 0.5%. Organic sales for North America increased 3.5%.
  • Latin America sales decreased 4.5%. Unit volume increased 2.5%, pricing increased 3.5% and foreign exchange was negative 10.5%. Volume gains were led by Mexico, Brazil and Colombia. Organic sales for Latin America increased 6.0%.
  • Europe net sales decreased 7.0%. Unit volume increased 1.5%, pricing decreased 1.0% and foreign exchange was negative 7.5%. Volume gains were led by the United Kingdom and the Nordic region. Organic sales for Europe increased 0.5%.
  • Asia-Pacific net sales decreased 8.0%. Unit volume decreased 2.5%, pricing was even with the year ago period and foreign exchange was negative 5.5%. Volume declines in the Greater China region were partly offset by volume gains in India, Australia, Thailand and the Philippines. Organic sales for Asia-Pacific decreased 2.5%.
  • Africa/Eurasia sales decreased 6.0%. Unit volume was even with the year ago period, pricing increased 7.0% and foreign exchange was negative 13.0%. Volume gains in Russia and the Gulf States offset volume declines in South Africa and Saudi Arabia. Organic sales for Africa/Eurasia increased 7.0%.
  • Worldwide Hill’s Pet Nutrition sales increased 3.0% during first quarter 2019. Unit volume increased 2.0%, pricing increased 4.0% and foreign exchange was negative 3.0%. Volume gains in the United States and Western Europe were partially offset by volume declines in South Africa and Russia. Hill’s organic sales increased 6.0%.

       The company’s share of the global toothpaste market stood at 41.7% year-to-date. Management continues to expect 2019 net sales to be flat to up low-single-digits, with organic sales growth of 2% to 4%. The New-York-based company went on to say that they continue to plan for increased investments behind their brands, entertain higher pricing and continue strong product innovation, led by the relaunches of Colgate Total and Hill’s Science Diet and continued focus on naturals. The company is expecting full-year adjusted earnings per share to be down in the mid-single-digits. The shares are hitting a new 52-week high following the sales and earnings results and conservative investors with a long-term view can continue to maintain positions. The high-quality shares also yield 2.5%.


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