• Volume Growth: 3% growth in developed markets, 4.6% growth in emerging markets.

• Organic Sales Growth: Driven by strong volume-led performance across all six divisions.

• Gross Margin: Expansion contributing to gross profit dollar growth.

• Advertising Investment: Continued funding to support brand health and household penetration.

• Warning! GuruFocus has detected 7 Warning Sign with CL.

Release Date: October 25, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Colgate-Palmolive Co (NYSE:CL) reported strong volume-led organic sales growth, with 3% growth in developed markets and 4.6% growth in emerging markets.

• The company achieved gross margin expansion, which has allowed for continued investment in advertising and capabilities.

• Colgate-Palmolive Co (NYSE:CL) saw strong performance in its Hills pet nutrition business, with significant volume growth and market share gains.

• The European division delivered a strong quarter with improved market shares and high levels of advertising investment.

• Emerging markets, particularly Brazil, India, and Mexico, showed strong performance, contributing to overall growth.

Negative Points

• North America experienced a significant decline in pricing for the second consecutive quarter, impacting overall performance.

• The skin health business faced challenges, particularly in China and North America, with lower volumes and e-commerce pullbacks.

• The company noted some choppiness in the Mexican market post-elections, which could impact future performance.

• Colgate-Palmolive Co (NYSE:CL) is not immune to economic and political volatility in emerging markets, which could affect future results.

• There is a need for continued focus on premiumization and innovation to address competitive pressures and maintain market share.

Q & A Highlights

Q: Can you provide insights into the competitive environment in North America and your pricing strategy, especially given the recent pricing declines? Also, how is the PET segment performing in this challenging pricing environment? A: Noel Wallace, CEO, explained that North America's performance was as expected, with some softness in volume due to shipment timing and e-commerce issues. Pricing was consistent with Q2, and the company anticipates volume normalization. The PET segment, particularly Hills, showed strong performance with mid-single-digit volume growth, despite a challenging pricing environment. The company plans to continue reinvesting in the brand to drive growth.

Q: As you look towards 2025, what areas of the business do you expect to accelerate, and how do you plan to cycle tough comparisons? A: Noel Wallace, CEO, emphasized the importance of investing in long-term capabilities to drive sustained growth. The focus will be on accelerating innovation, particularly in H2 and H3, and maintaining strong advertising levels to improve brand health. The company aims to drive household penetration and per capita consumption in key markets.