01—Abstract
Summary
Summary of the 10-K filed February 13, 2025. Cited figures are marked; the original filing is the authoritative source.
Colgate-Palmolive's FY2024 10-K shows a company that grew reported net sales 3.3% to $20.1 billiona, with organic sales up 7.4% driven by 3.1% volume growth and 4.4% net price increases, partly offset by a 4.1% foreign exchange headwind.
Gross margin expanded to 60.5% (60.6% non-GAAP) on funding-the-growth savings and pricing, while SG&A rose to 38.5% of sales as advertising spend increased 14.7% to $2.72 billionb (13.5% of sales). GAAP operating profit rose 7% to $4.27 billion, and non-GAAP operating margin improved 100 bps to 21.7%. GAAP diluted EPS was $3.51 (non-GAAP $3.60, up 11%), versus $2.77 GAAP in 2023, which was depressed by the ERISA litigation charge and a foreign tax matter.
Cash generation strengthened, with operating cash flow up 10% to $4.1 billion and capex falling to $561 millionc. The company returned about $3.5 billion to shareholders through $1.79 billion in dividends and $1.74 billion in buybacks, which pushed total equity down to $544 million and left the balance sheet heavily leveraged relative to book value. Total debt eased to about $7.9 billion.
Hill's Pet Nutrition was the standout segment, with operating margin up 270 bps to 21.5%d, while Latin America delivered strong organic growth of 16.8% despite severe currency headwinds. Key risks flagged for investors include ongoing geopolitical tensions (Ukraine, the Middle East, China-Taiwan), new U.S. tariffs announced in February 2025, rising advertising and input-cost pressure, retailer concentration (Walmart at roughly 11% of sales), hyperinflation in Argentina and Türkiye, and a pending ERISA judgment that may require a 2025 pension cash contribution. Management expects a challenging macro environment and volatile category growth in 2025.
02—Key points
Key Highlights
- Net sales of $20.1B (+3.3% reported, +7.4% organic); volume +3.1% and net pricing +4.4%, with FX a -4.1% drag
- GAAP gross margin up 230 bps to 60.5%, driven by funding-the-growth savings (280 bps) and pricing (170 bps), partly offset by raw material inflation (230 bps)
- GAAP diluted EPS $3.51 vs. $2.77 in 2023; non-GAAP diluted EPS $3.60, up 11% from $3.23
- Advertising investment rose 14.7% to $2.72B (13.5% of sales), a key driver of SG&A deleverage
- Hill's Pet Nutrition operating margin rose 270 bps to 21.5% on sales growth of 4.5%; Latin America organic sales grew 16.8%
- Operating cash flow up 10% to $4.1B; capex reduced to $561M; 2025 capex guided to ~3% of sales
- Shareholder returns of ~$3.5B (dividends $1.79B, buybacks $1.74B); total Colgate shareholders' equity fell to $212M, and total equity to $544M
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Colgate-Palmolive kept $0.14.
- Revenue$20.10B100.0%
- Cost of revenue−$7.94B39.5%
- Gross profit$12.16B60.5%
- Operating costs−$7.89B39.3%
- Operating income$4.27B21.2%
- Interest, other & tax−$1.38B6.9%
- Net income$2.89B14.4%
Where FY2024 revenue went
$20.10B- Cost of revenue: $7.94B, 40% of revenue
- SG&A: $7.73B, 38% of revenue
- Net income: $2.89B, 14% of revenue
- R&D: $355.0M, 1.8% of revenue
- Interest, other & tax: $1.38B, 6.9% of revenue
Kept 14% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 13, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $20.10B$19.46B | +3.3% |
| Cost of Revenue | $7.94B$8.13B | −2.3% |
| Gross Profit | $12.16B$11.33B | +7.4% |
| R&D Expenses | $355.00M$343.00M | +3.5% |
| SG&A Expenses | $7.73B$7.15B | +8.1% |
| Operating Income | $4.27B$3.98B | +7.1% |
| Net Income | $2.89B$2.30B | +25.6% |
| EPS (Basic) | $3.53$2.78 | +27.0% |
| EPS (Diluted) | $3.51$2.77 | +26.7% |
| Shares Outstanding (Basic) | 819.10M827.40M | −1.0% |
| Shares Outstanding (Diluted) | 823.20M829.20M | −0.7% |
05—Questions
Frequently Asked Questions
What drove Colgate's margin improvement in 2024?
Gross margin rose 230 bps (to 60.5% GAAP) mainly from funding-the-growth cost savings (280 bps) and higher pricing (170 bps). These gains were partly offset by higher raw and packaging material costs (230 bps). Operating margin on a non-GAAP basis rose 100 bps to 21.7%, though higher advertising spend absorbed part of the gross margin gain in SG&A.
How strong is the underlying growth versus the reported numbers?
Reported net sales grew only 3.3% because of a 4.1% negative foreign exchange impact, concentrated in Latin America (-13.7%) and Africa/Eurasia (-12.1%). Organic sales growth of 7.4% better reflects the underlying trend, with volume (+3.1%) and pricing (+4.4%) both contributing. Pricing was strongest in Latin America and Hill's, while North America grew only 0.5% reported and 0.7% organic.
What are the main risks flagged in the filing?
The filing highlights geopolitical conflicts (Ukraine, Middle East, China-Taiwan), new U.S. tariffs imposed in February 2025, inflation and high interest rates that could weaken consumer demand, retailer consolidation and private-label competition, and cybersecurity threats. A pending ERISA pension judgment may require a 2025 cash contribution, and Argentina and Türkiye are hyperinflationary. Walmart represents about 11% of net sales.
Is Colgate's balance sheet a concern given the equity figures?
Total Colgate shareholders' equity fell to $212M (from $609M) because cumulative returns to shareholders and currency translation losses (AOCI of -$4.2B) have exceeded retained earnings. Negative or thin book equity is common for mature companies with large buyback programs, and it does not indicate liquidity stress. Operating cash flow of $4.1B covers dividends and buybacks, and the company is in full compliance with its debt covenants. Net debt is roughly $6.8B.
What should investors watch in 2025?
Management expects continued volatility across categories, inflation and tariff-related pressures, and difficulty predicting category growth. Key items to monitor include whether pricing can hold without hurting volumes, whether funding-the-growth savings continue to offset input costs, advertising levels, the outcome of the ERISA pension appeal, and the timing of pension funding. The 2022 Global Productivity Initiative concluded at the end of 2024 with about $125M in annualized pretax savings.
06—Continue