Summary
Colgate-Palmolive Company's (CL) Q2 2013 filing shows a modest increase in net sales, driven by volume growth, though impacted by negative foreign exchange. The company is executing a significant Global Growth and Efficiency Program, which incurred substantial restructuring charges impacting operating profit and net income. Despite these headwinds, the company demonstrated resilience in organic sales growth across key segments, particularly in emerging markets. Key financial highlights include a continued focus on cost savings initiatives and capital allocation through dividends and share repurchases, while managing complex international operations, notably the ongoing challenges in Venezuela due to currency devaluation and economic instability. Investors should note the company's strategic emphasis on core product categories and geographic diversity to mitigate risks. The increase in selling, general, and administrative expenses, particularly advertising investment, alongside ongoing restructuring costs, are key areas to monitor. While GAAP net income and EPS saw a decline compared to the prior year, the company emphasizes its non-GAAP performance which shows growth, reflecting operational improvements outside of significant one-time charges.
Financial Highlights
49 data points| Revenue | $4.35B |
| Cost of Revenue | $1.81B |
| Gross Profit | $2.53B |
| SG&A Expenses | $1.53B |
| Operating Income | $906.00M |
| Net Income | $561.00M |
| EPS (Basic) | $0.60 |
| EPS (Diluted) | $0.60 |
| Shares Outstanding (Basic) | 933.10M |
| Shares Outstanding (Diluted) | 942.30M |
Key Highlights
- 1Net sales increased by 2.0% to $4,346 million for the three months ended June 30, 2013, compared to the prior year period, primarily driven by a 4.0% volume increase, partially offset by a 3.0% negative foreign exchange impact.
- 2Organic sales, excluding foreign exchange and M&A impacts, grew by 5.5% for the quarter, indicating underlying business strength.
- 3The company incurred significant restructuring charges of $102 million (pre-tax) in the quarter related to its 2012 Global Growth and Efficiency Program, impacting operating profit and net income.
- 4Diluted earnings per share decreased to $0.60 from $0.65 in the prior year quarter, largely due to the aforementioned restructuring charges and a $172 million charge related to the devaluation of the Venezuelan bolivar fuerte.
- 5The Oral, Personal, and Home Care segment remains the largest revenue driver, with strong organic sales growth in North America (5.0%) and Greater Asia/Africa (9.5%).
- 6Hill's Pet Nutrition segment also showed positive organic sales growth of 5.5% driven by new product launches and reformulations.
- 7The company repurchased approximately 6.7 million shares of common stock during the quarter, demonstrating a commitment to returning capital to shareholders.
- 8Long-term debt increased to $5,607 million as of June 30, 2013, reflecting new debt issuances to fund general corporate purposes.