10-QPeriod: Q2 FY2024

COLGATE PALMOLIVE CO Quarterly Report for Q2 Ended Jun 30, 2024

Filed July 26, 2024For Securities:CL

Summary

Colgate-Palmolive Company (CL) reported robust financial results for the second quarter and first half of 2024, demonstrating strong top-line growth driven by both volume and pricing. For the three months ended June 30, 2024, Net sales increased by 4.9% to $5,058 million, and organic sales grew by 9.0%. This growth was supported by solid performance in both the Oral, Personal and Home Care segment and the Pet Nutrition segment (Hill's Pet Nutrition). Diluted Earnings Per Share (EPS) reached $0.89, a significant increase from $0.60 in the prior year period. The company also saw an improvement in Gross profit margin to 60.6% and Operating profit margin to 21.6%, reflecting successful cost-saving initiatives and pricing strategies. The first half of 2024 also showed positive momentum with Net sales up 5.5% to $10,124 million and organic sales up 9.4%. Diluted EPS for the six months ended June 30, 2024, was $1.71, up from $1.05 in the prior year. The company continues to invest in brand building and innovation, as evidenced by increased advertising spend, positioning it for continued growth in a challenging global economic environment.

Financial Highlights

49 data points
Beta

Revenue

$5.06B

60.6% Gross Margin

Net Income

$731.00M

14.5% Net Margin

EPS (Diluted)

$0.89

Total Assets

$16.48B

Cash & Equivalents

$1.11B

Free Cash Flow

$990.00M

Financial Statements
Beta
Revenue$5.06B
Cost of Revenue$1.99B
Gross Profit$3.07B
SG&A Expenses$1.94B
Operating Income$1.09B
Net Income$731.00M
EPS (Basic)$0.89
EPS (Diluted)$0.89
Shares Outstanding (Basic)819.70M
Shares Outstanding (Diluted)823.70M

Key Highlights

  • 1Net sales for the second quarter of 2024 increased 4.9% to $5,058 million, driven by a 4.7% volume growth and 4.2% price increase.
  • 2Organic sales, a key performance indicator excluding foreign exchange impacts, grew by a strong 9.0% in the second quarter.
  • 3Diluted Earnings Per Share (EPS) rose to $0.89 for the quarter, a significant increase from $0.60 in the same period last year.
  • 4Gross profit margin improved to 60.6% in the second quarter of 2024 from 57.8% in the prior year, attributed to cost savings and higher pricing.
  • 5Operating profit margin also saw an increase, reaching 21.6% in the second quarter of 2024, up from 20.2% in the second quarter of 2023.
  • 6The Pet Nutrition segment (Hill's Pet Nutrition) showed a 5.5% increase in net sales, with organic sales up 6.1% for the quarter.
  • 7The company repurchased approximately 4.8 million shares of common stock for approximately $444 million during the second quarter of 2024.

Frequently Asked Questions

Colgate-Palmolive's sales growth in the second quarter of 2024 was primarily driven by a combination of volume growth of 4.7% and net selling price increases of 4.2%. Organic sales, which exclude the impact of foreign exchange, acquisitions, and divestitures, grew by a robust 9.0%, indicating strong underlying demand for the company's products.

Profitability saw significant improvement. Gross profit increased to $3,066 million, with the gross profit margin expanding to 60.6% from 57.8% in the prior year. This expansion was driven by cost savings from 'funding-the-growth' initiatives and higher pricing, partially offset by increased raw material costs. Operating profit also grew, leading to an operating profit margin of 21.6%, up from 20.2% in the year-ago period.

Colgate-Palmolive anticipates continued challenging global macroeconomic, political, and market conditions, including inflation, high interest rates, and foreign currency volatility. The company expects these factors may impact consumer demand and purchasing patterns. However, Colgate-Palmolive believes its strong financial position, resilient supply chain, focused business strategy, and investment in brands and innovation will enable it to navigate these challenges and drive shareholder value.

The company incurred charges related to the 2022 Global Productivity Initiative. For the second quarter of 2024, these charges amounted to $27 million pretax. These charges are excluded when presenting non-GAAP financial measures to provide a clearer view of ongoing operational performance.