Colgate-Palmolive’s stock took a hit, falling 5% after the company’s fourth-quarter revenue missed analysts’ forecasts, largely due to negative foreign exchange impacts. The household products maker reported a revenue decline of 0.1% to $4.94 billion, short of the anticipated $4.98 billion. However, adjusted earnings per share (EPS) of $0.91 exceeded expectations .
The company’s sales were impacted by foreign exchange rates, particularly in Latin America, where sales slumped 7.2%. Sales were also down 1.0% in North America. On the other hand, sales were higher in Europe (+4.9%), Asia-Pacific (+3.7%), and Africa/Eurasia (+2.8%). Hill’s pet food sales rose 2.3%, accounting for the largest percentage of the company’s total revenue.
CEO Noel Wallace emphasized that Colgate met its goals for the year, delivering peer-leading growth while investing in future growth and building flexibility into its profit and loss. However, the company expects revenue to be “roughly flat” in 2025, with a mid-single-digit negative impact from foreign exchange .
Key Highlights:
– Revenue: $4.94 billion, down 0.1% year-over-year
– Adjusted EPS: $0.91, exceeding expectations
– Sales Growth: Negative in Latin America (-7.2%) and North America (-1.0%), positive in Europe (+4.9%), Asia-Pacific (+3.7%), and Africa/Eurasia (+2.8%)
– 2025 Outlook: Revenue expected to be “roughly flat” with a mid-single-digit negative impact from foreign exchange
Challenges Ahead:
– Foreign exchange rates continue to impact sales
– Sales growth challenges in Latin America and North America
– Need to invest in future growth and build flexibility into profit and loss
Investor Insights:
– Colgate-Palmolive’s stock has been impacted by foreign exchange rates and sales growth challenges
– The company’s ability to invest in future growth and build flexibility into its profit and loss will be key to its success
– Investors should monitor the company’s progress in addressing these challenges and its ability to deliver peer-leading growth .
EXCERPT
Colgate-Palmolive Stock Falls as Foreign Exchange Rates Hurt Sales, Outlook
By Bill McColl Published January 31, 2025 10:57 AM EST
Colgate toothpaste and a toothbrush
Gabby Jones / Bloomberg via Getty ImagesKey Takeaways
Colgate-Palmolive’s fourth-quarter revenue was dragged down by negative foreign exchange impacts.
Revenue missed analysts’ forecasts as sales dropped in Latin America and North America.
The household products maker warned that full-year revenue will also be held back because of foreign exchange issues.
Colgate-Palmolive (CL) shares fell 5% Friday after the household products company missed revenue forecasts and gave weak guidance as it was hurt by foreign exchange rates.The maker of its namesake toothpaste, dishwashing liquid, and Hill’s pet food reported revenue declined 0.1% to $4.94 billion. Analysts surveyed by Visible Alpha had anticipated $4.98 billion. Adjusted earnings per share (EPS) of $0.91 exceeded forecasts.
Latin America Sales Slump More Than 7%
Foreign exchange rates caused a negative 4.4% effect on revenue. They were especially impactful in Colgate’s largest regional market, Latin America, which posted a sales slump of 7.2%. Sales were also down 1.0% in North America. However, they were higher in Europe (+4.9%), Asia-Pacific (+3.7%), and Africa/Eurasia (+2.8%). Sales at Hill’s, which made up the largest percentage of the company’s total revenue, rose 2.3%.CEO Noel Wallace argued that Colgate met its goals for the year to “deliver peer leading growth while funding investment for future growth,” as well as building flexibility into its profit and loss “to counter macro headwinds.”
For 2025, Colgate expects revenue to be “roughly flat” from 2024’s $20.1 billion, “including a mid-single-digit negative impact from foreign exchange.” Visible Alpha estimates were for $20.3 billion.
Source: Investopedia
