10-QPeriod: Q1 FY2021

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

Filed April 30, 2021For Securities:CL

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.

Financial Highlights

48 data points
Beta

Revenue

$4.34B

60.7% Gross Margin

Net Income

$681.00M

15.7% Net Margin

EPS (Diluted)

$0.80

Total Assets

$15.80B

Cash & Equivalents

$995.00M

Free Cash Flow

$598.00M

Financial Statements
Beta
Revenue$4.34B
Cost of Revenue$1.71B
Gross Profit$2.64B
SG&A Expenses$1.60B
Operating Income$1.00B
Net Income$681.00M
EPS (Basic)$0.80
EPS (Diluted)$0.80
Shares Outstanding (Basic)848.60M
Shares Outstanding (Diluted)851.40M

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.

Frequently Asked Questions

The primary driver of sales growth was a combination of net selling price increases (4.5%) and a positive foreign exchange impact (1.0%), contributing to a total net sales increase of 6.0%. Organic sales, excluding these factors, also grew by 5.0%.

Diluted EPS decreased slightly to $0.80 from $0.83 year-over-year. This was primarily due to a 9% increase in selling, general, and administrative (SG&A) expenses, which included higher advertising investments and overhead costs, as well as an increase in raw and packaging material costs that impacted gross margins. These increased costs outpaced the benefit from higher net sales.

Colgate-Palmolive is implementing "funding-the-growth" initiatives aimed at improving efficiency and reducing costs. These initiatives, along with strategic pricing actions, are being used to partially offset the impact of higher raw and packaging material costs and inflationary pressures. The company also continues to invest in innovation, e-commerce, and brand building to maintain its competitive position.

Management acknowledges that the COVID-19 pandemic continues to create global economic, political, and market challenges, leading to increased volatility. While demand for essential products remains strong, the company is closely monitoring consumer behavior, supply chain disruptions, and competitive dynamics. They express confidence in their strong financial position and resilient supply chain to navigate these uncertainties and deliver long-term shareholder value.