Colgate-Palmolive Company (NYSE:CL) is brushing up its future with a bold 2030 plan, even as it takes on up to $300M in restructuring charges.
The move comes as the oral care giant topped second-quarter expectations, reporting stronger-than-expected earnings and steady sales growth.
Colgate-Palmolive has reported second-quarter adjusted earnings per share of 92 cents, beating the analyst consensus estimate of 89 cents.
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Quarterly sales of $5.11 billion (+1% year over year) outpaced the Street view of $5.03 billion. During the quarter, sales declined 1% in North America and 4.8% in Latin America, while rising 7.8% in Europe, 0.8% in Asia Pacific, and 8% in Africa/Eurasia.
Net sales increased by 1.0%, while organic sales rose by 1.8%, reflecting a 0.6% negative impact from lower private label pet sales.
Quarterly gross profit inched up to $3.069 billion in the quarter under review, compared with $3.066 billion a year ago.
GAAP gross profit margin declined by 50 basis points to 60.1%, while Base Business gross profit margin decreased by 70 basis points to the same level.
Quarterly operating profit margin contracted to 21.1% from 21.6% in the year-ago period. The company exited the quarter with cash and equivalents worth $1.22 billion.
otal debt expanded to $8.76 billion from $7.95 billion as of December 31, 2024.
Streamlining for Growth
Colgate-Palmolive announced a new three-year productivity program aimed at driving future growth and advancing its 2030 strategy.
The program focuses on aligning the organizational structure with strategic priorities, optimizing the global supply chain for greater agility and efficiency, and streamlining operations to reduce overhead costs.
Cumulative pre-tax charges associated with the program are expected to total between $200 million and $300 million once all initiatives are approved and implemented, with substantially all charges anticipated to be incurred by December 31, 2028.
Outlook
The company continues to expect net sales to increase in the low single digits, now factoring in a flat to low-single-digit negative impact from foreign exchange.
Organic sales growth is projected to be at the low end of the 2% to 4% range, reflecting the planned exit from private label pet sales over the course of 2025.
On a non-GAAP (Base Business) basis, the company still anticipates gross profit margin and advertising to remain roughly flat as a percentage of net sales, with earnings per share expected to grow in the low single digits.
Price Action: CL shares are trading higher by 0.42% to $84.20 premarket at last check Friday.
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