Summary
Colgate-Palmolive Company (CL) reported its third-quarter and year-to-date results for the period ending September 30, 2021. For the third quarter, net sales increased by 6.5% year-over-year, driven by volume growth, price increases, and favorable foreign exchange. Organic sales, excluding these factors, grew by 4.5%. The Pet Nutrition segment, particularly Hill's Pet Nutrition, showed robust growth of 20.0% in net sales, a significant contributor to the overall increase. Despite top-line growth, profitability faced pressure. Gross profit margin declined by 180 basis points due to higher raw and packaging material costs, which were partially offset by cost savings and pricing initiatives. Selling, general, and administrative expenses also increased as a percentage of net sales, largely due to higher logistics costs. Consequently, operating profit margin decreased by 260 basis points year-over-year. Diluted earnings per share (EPS) for the quarter were $0.75, down from $0.81 in the prior year, though adjusted EPS showed a modest increase.
Financial Highlights
48 data points| Revenue | $4.41B |
| Cost of Revenue | $1.79B |
| Gross Profit | $2.62B |
| SG&A Expenses | $1.64B |
| Operating Income | $967.00M |
| Net Income | $634.00M |
| EPS (Basic) | $0.75 |
| EPS (Diluted) | $0.75 |
| Shares Outstanding (Basic) | 843.60M |
| Shares Outstanding (Diluted) | 846.40M |
Key Highlights
- 1Net sales for the third quarter increased by 6.5% to $4.414 billion, with organic sales growing 4.5%.
- 2The Pet Nutrition segment (Hill's Pet Nutrition) was a strong performer, with net sales up 20.0% and organic sales up 19.0% in Q3.
- 3Gross profit margin declined to 59.4% from 61.2% in the prior year quarter, primarily due to a significant increase in raw and packaging material costs.
- 4Selling, general, and administrative expenses increased as a percentage of net sales, driven by higher logistics costs.
- 5Diluted EPS for the quarter was $0.75, a decrease from $0.81 in the prior year period.
- 6Despite cost pressures, the company continued to invest in advertising and global growth initiatives, while managing share repurchases and dividend payments.