Colgate-Palmolive Shares Drop 4.6% After Weak Earnings Report

Colgate-Palmolive's stock fell 4.6% following their fourth-quarter earnings report, indicating potential market concerns stemming from missed revenue and a bleak forecast.

Date: 01-02-2025

AI Rating: 5

Colgate-Palmolive's Earnings Performance

Colgate-Palmolive (NYSE: CL) experienced a decline in share price due to disappointing earnings results in its fourth quarter. The company reported that overall revenue decreased by 0.1%, totaling $4.94 billion, which fell short of analysts' expectations of $4.99 billion. This miss was attributed to currency headwinds, particularly the strong dollar, which adversely impacted revenue generated overseas.

Despite this, Colgate noted a positive aspect with organic sales rising by 4.3%, indicating that the core business still maintains growth momentum. Also, volume sales saw a 2.5% increase across all regions, reflecting solid consumer demand. However, the decline in overall revenues may raise concerns among investors about the company's pricing strategy and market dynamics.

Earnings Per Share (EPS)

On a positive note, Colgate's base business earnings per share increased from $0.87 to $0.91, surpassing the expected value of $0.89. This suggests that the company is still capable of improving profitability despite external challenges.

Future Outlook

Looking ahead, Colgate has guided for flat revenue growth for fiscal 2025, citing a mid-single-digit negative impact from currency fluctuations. However, the company aims for organic sales to align with its long-term growth target of 3% to 5% and anticipates gross profit margin expansion along with low- to mid-single-digit adjusted EPS growth. Investors might take solace in this long-term focus even amid short-term volatility.

In conclusion, while revenue struggles and currency challenges are likely to weigh on stock performance in the near term, the EPS growth points to underlying strengths that might provide investment opportunities for those looking for stability.

Stocks: CL