COLGATE PALMOLIVE CO Quarterly Report for Q1 Ended Mar 31, 2021

Summary

Colgate-Palmolive Company reported first-quarter 2021 results showing a 6.0% increase in net sales to $4.344 billion, driven by a 4.5% increase in net selling prices and a 1.0% positive foreign exchange impact. Organic sales grew by 5.0%. The Oral, Personal, and Home Care segment saw a 5.5% increase in net sales, while Hill's Pet Nutrition experienced a 9.5% rise. Despite top-line growth, diluted earnings per share decreased slightly to $0.80 from $0.83 in the prior year period, primarily due to increased selling, general, and administrative expenses, including higher advertising investment and overhead costs, as well as elevated raw and packaging material costs impacting gross margins. The company continues to focus on its "funding-the-growth" initiatives to drive efficiency and cost savings, which partially offset inflationary pressures. Management expressed confidence in the company's financial position and strategy to navigate ongoing challenges, including economic uncertainties and competitive pressures, while continuing to invest in innovation, e-commerce, and sustainability. The company also saw a moderation in share repurchases compared to prior periods but indicated a return to historical levels in Q1 2021.

Key Highlights

• 1Net sales increased by 6.0% to $4.344 billion in Q1 2021 compared to Q1 2020.
• 2Organic sales grew by 5.0%, indicating underlying business strength.
• 3Hill's Pet Nutrition segment showed robust growth with net sales up 9.5%.
• 4Diluted Earnings Per Share (EPS) decreased to $0.80 from $0.83 year-over-year.
• 5Gross profit margin slightly improved to 60.7% driven by cost savings and pricing, but was impacted by higher raw and packaging material costs.
• 6Selling, general, and administrative expenses increased by 9%, impacting operating profit margin.
• 7The company is actively managing currency fluctuations and inflationary cost pressures through various initiatives.

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