01—Abstract
Summary
Summary of the 10-K filed February 23, 2026. Cited figures are marked; the original filing is the authoritative source.
Colgate-Palmolive's 2025 results show modest top-line growth masked by a large non-cash impairment.
Net sales rose 1.4% to $20,382 milliona, driven by 2.1% net price increases, partially offset by 0.4% volume declines and a 0.3% FX headwind. Organic sales grew 1.4%, with Oral, Personal and Home Care up 1.5% and Hill's Pet Nutrition up 1.2% organically. Gross margin slipped to 60.1% (down 40 bps reported) as raw and packaging material inflation of roughly 420 bps was only partly offset by funding-the-growth savings of 260 bps.
GAAP operating profit fell 23% to $3,306 millionb because of a $919 million goodwill and intangible impairment tied to the skin health business (primarily Filorga), along with a $99 million ERISA settlement charge. Excluding these and other items, operating profit was flat at $4,347 million and diluted EPS was $3.69 non-GAAP versus $2.63 GAAP. Management expects softness in its categories seen in 2025 to continue into 2026, citing macroeconomic pressure, high interest rates, FX volatility and tariff-related trade developments.
It is also pursuing a three-year Strategic Growth and Productivity Program with estimated pre-tax charges of $200 to $300 millionc through 2028, and it is operating under its 2030 strategy. Cash generation remained solid, with operating cash flow up 2% to $4,198 million and capex of $564 million. Shareholder returns were significant: dividends paid totaled $1,823 million (quarterly dividend raised to $0.52 from $0.50) and buybacks totaled $1,210 million.
Total debt was stable at about $7.99 billiond. The company's shareholders' equity fell to a near-zero $54 million after the impairment, buybacks and dividends, so investors should focus on cash flow and leverage rather than book equity.
For investors, the key takeaways are that underlying profitability held up despite input-cost inflation, that 2026 growth is expected to remain soft, and that the impairment reflects weakness in the skin health portfolio, particularly in China, rather than a broader franchise problem. Walmart represents about 11% of net sales, and the Venezuela and Russia exposures are noted but are not material to the consolidated statements.
02—Key points
Key Highlights
- Net sales of $20.38B, up 1.4% (organic +1.4%), with net pricing of +2.1% offsetting a 0.4% volume decline.
- GAAP operating profit fell 23% to $3.31B, including a $919M non-cash goodwill and intangible impairment in skin health (Filorga); non-GAAP operating profit was flat at $4.35B.
- Gross margin of 60.1% (down 40 bps GAAP), with raw and packaging cost inflation of about 420 bps offset by about 260 bps of funding-the-growth savings.
- GAAP diluted EPS of $2.63 versus $3.51 in 2024; non-GAAP diluted EPS rose 3% to $3.69.
- Operating cash flow rose 2% to $4.20B; capex was $564M (expected to be about 3% of sales in 2026).
- Returned about $3.0B to shareholders through dividends ($1.82B, with the quarterly dividend raised to $0.52) and buybacks ($1.21B).
- Management expects category softness seen in 2025 to persist into 2026, and launched a three-year Strategic Growth and Productivity Program with $200–300M of pre-tax charges through 2028.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, Colgate-Palmolive kept $0.10.
- Revenue$20.38B100.0%
- Cost of revenue−$8.13B39.9%
- Gross profit$12.25B60.1%
- Operating costs−$8.95B43.9%
- Operating income$3.31B16.2%
- Interest, other & tax−$1.17B5.8%
- Net income$2.13B10.5%
Where FY2025 revenue went
$20.38B- Cost of revenue: $8.13B, 40% of revenue
- SG&A: $7.90B, 39% of revenue
- Net income: $2.13B, 10% of revenue
- R&D: $366.0M, 1.8% of revenue
- Other operating costs: $676.0M, 3.3% of revenue
- Interest, other & tax: $1.17B, 5.8% of revenue
Kept 10% as net incomeNet income $2.13B · 10%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 23, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $20.38B$20.10B | +1.4% |
| Cost of Revenue | $8.13B$7.94B | +2.4% |
| Gross Profit | $12.25B$12.16B | +0.7% |
| R&D Expenses | $366.00M$355.00M | +3.1% |
| SG&A Expenses | $7.90B$7.73B | +2.3% |
| Operating Income | $3.31B$4.27B | −22.5% |
| Net Income | $2.13B$2.89B | −26.2% |
| EPS (Basic) | $2.64$3.53 | −25.2% |
| EPS (Diluted) | $2.63$3.51 | −25.1% |
| Shares Outstanding (Basic) | 808.70M819.10M | −1.3% |
| Shares Outstanding (Diluted) | 811.10M823.20M | −1.5% |
05—Questions
Frequently Asked Questions
Why did GAAP earnings drop so sharply in 2025?
The main driver was a non-cash $919M pre-tax impairment of goodwill and intangible assets in the skin health reporting unit, primarily Filorga, after weaker-than-expected performance, especially in China. Other one-time items included a $99M ERISA litigation charge (including plaintiffs' attorneys' fees), $13M of restructuring charges and $9M of acquisition costs. Excluding these, non-GAAP EPS grew 3% to $3.69.
Is the 2025 impairment a sign of broader problems at Colgate?
The filing attributes the charge specifically to the skin health business, which was lowered in outlook due to lower category growth and underperformance in China. The core Oral Care franchise grew organically, with toothpaste and manual toothbrush growth, and Hill's Pet Nutrition also grew. However, North America was weak, with organic sales down 1.6%, and Asia Pacific declined 1.0%, so the impairment reflects a portfolio issue within a broader soft environment.
How is the company handling rising input costs?
Raw and packaging material costs rose sharply, adding about 420 bps of gross margin pressure in 2025. Management offset part of this through funding-the-growth cost savings (about 260 bps), higher pricing (about 80 bps) and mix. The company also cites its three-year Strategic Growth and Productivity Program, which targets supply chain and overhead efficiencies, with substantially all charges expected by the end of 2028.
What is the outlook for 2026 and how safe is the dividend and balance sheet?
Management expects the softness in categories seen in 2025 to continue into 2026, citing inflation, high interest rates, FX volatility and trade developments. Free cash flow (operating cash flow of $4.2B less capex of $0.56B) comfortably covers the $1.8B dividend. Total debt is about $7.99B, with $1.29B of cash, a $3.0B undrawn revolver and $3.6B of total available credit lines. The company is in compliance with its covenants, and the shareholders' equity of $54M is low mainly because of the impairment and cumulative buybacks, not operating losses.
06—Continue