10-QPeriod: Q3 FY2023

COLGATE PALMOLIVE CO Quarterly Report for Q3 Ended Sep 30, 2023

Filed October 27, 2023For Securities:CL

Summary

Colgate-Palmolive Company reported strong top-line growth in the third quarter of 2023, with Net sales increasing by 10.5% to $4.915 billion compared to the prior year period. This growth was driven by a significant 9.5% increase in net selling prices and a modest 0.5% volume increase, alongside a slight positive foreign exchange impact. The company's organic sales, a key non-GAAP metric excluding currency fluctuations and acquisitions, grew by 9.0%. Profitability also saw improvement, with operating profit increasing by 9% to $1.029 billion. Diluted Earnings Per Share (EPS) rose to $0.86, a notable increase from $0.74 in the prior year quarter. Despite ongoing inflationary pressures on raw materials, the company managed to expand its Gross Profit margin to 58.5% due to strategic pricing actions and cost-saving initiatives, though this was partially offset by higher input costs. The Pet Nutrition segment, driven by Hill's Pet Nutrition, showed particularly strong performance with a 21.5% increase in net sales.

Financial Highlights

48 data points
Beta

Revenue

$4.92B

58.5% Gross Margin

Net Income

$708.00M

14.4% Net Margin

EPS (Diluted)

$0.86

Total Assets

$16.04B

Cash & Equivalents

$951.00M

Free Cash Flow

$1.15B

Financial Statements
Beta
Revenue$4.92B
Cost of Revenue$2.04B
Gross Profit$2.88B
SG&A Expenses$1.82B
Operating Income$1.03B
Net Income$708.00M
EPS (Basic)$0.86
EPS (Diluted)$0.86
Shares Outstanding (Basic)825.60M
Shares Outstanding (Diluted)827.30M

Key Highlights

  • 1Net sales for the third quarter of 2023 grew by 10.5% year-over-year to $4.915 billion, driven primarily by net selling price increases of 9.5%.
  • 2Organic sales (excluding currency and acquisitions) increased by a robust 9.0% for the quarter.
  • 3Diluted Earnings Per Share (EPS) increased to $0.86 for the third quarter of 2023, up from $0.74 in the prior year period.
  • 4Gross profit margin improved to 58.5% from 57.2% in the prior year quarter, reflecting successful pricing strategies and cost savings, despite higher raw material costs.
  • 5The Pet Nutrition segment, primarily Hill's Pet Nutrition, demonstrated strong growth with a 21.5% increase in net sales.
  • 6The company repurchased approximately 4.6 million shares of common stock during the quarter, totaling $341 million, demonstrating a commitment to returning capital to shareholders.
  • 7Despite global macroeconomic challenges, including inflation and rising interest rates, Colgate-Palmolive reported positive sales growth across most of its operating segments.

Frequently Asked Questions

The primary driver of Colgate-Palmolive's revenue growth in the third quarter of 2023 was a 9.5% increase in net selling prices. Volume also contributed a modest 0.5% increase.

Colgate-Palmolive managed rising raw and packaging material costs through a combination of strategic pricing actions, which contributed significantly to higher gross profit margins, and cost-saving initiatives through its 'funding-the-growth' programs. These efforts helped offset the impact of increased input costs.

The Pet Nutrition segment, largely represented by Hill's Pet Nutrition, showed strong performance with a 21.5% increase in net sales for the third quarter of 2023. This growth was fueled by volume increases, higher selling prices, and acquisitions.

Colgate-Palmolive anticipates challenging global macroeconomic, political, and market conditions, including ongoing inflation and rising interest rates, which could impact consumer spending and demand for its products. However, the company believes its strong financial position and strategic initiatives position it well to navigate these challenges.