By hannover-web.com Colgate-Palmolive has raised its full-year sales and profit forecast, thanks to strong demand for its premium products. The company reported third-quarter results that exceeded expectations.
In the face of rising living costs, consumers have been prioritizing spending on essential items over non-essentials, which has driven sales for consumer goods companies like Colgate-Palmolive.
Despite multiple price hikes, the demand for the company’s oral care and hygiene products continues to grow.
The ongoing price increases, implemented to offset rising costs for raw materials and packaging, contributed to an expanded profit margin in the third quarter, which increased by 260 basis points to 61.1%.
Colgate’s performance sharply contrasts with that of rival Kimberly-Clark, which recently downgraded its full-year sales outlook. The latter reported that consumers are switching from its higher-priced personal care products to cheaper alternatives.
CEO of Colgate-Palmolive, Neil Wallace, stated, “We anticipate continuing our strong advertising investments through the end of this year as we focus on building our brand.”
RBC analyst Nik Modi expressed some concerns about the overall pet sector, citing consumer pressures and the push from major specialty pet retailers to offer more affordable products. However, he noted that Colgate-Palmolive has been performing relatively better than its peers, with Hill’s distribution advantages still in play.
The company now expects its net sales to grow between 3% to 5% in 2024, up from a prior forecast of 2% to 5%.
Additionally, Colgate-Palmolive anticipates an adjusted full-year profit growth rate of 10% to 11%, an increase from the previous estimate of 8% to 11%.
In the third quarter, the company raised prices by 3.1%, while organic sales grew by 3.7%.
According to data compiled by LSEG, Colgate-Palmolive reported adjusted earnings of 91 cents per share last quarter, surpassing the analysts’ average expectation of 89 cents.
The company’s net sales for the third quarter reached $5.03 billion, slightly above the expected $5 billion.
