Colgate Palmolive Co.’s stock was flat early Friday, even after the maker of dental, personal care and pet food products posted better-than-expected fourth-quarter earnings and offered guidance that met consensus estimates.
The New York-based company posted net income of $718 million, or 87 cents a share, for the quarter, up from $5 million, or 1 cent a share, in the year-earlier period. Adjusted per-share earnings also came to 87 cents, ahead of the 85 cent FactSet consensus.
Sales rose to $4.950 billion from $4.629 billion, also ahead of the $4.893 billion FactSet consensus.
Sales were boosted by higher prices, which helped boost gross profit margins by 400 basis points to 59.6%.
“We leveraged our strong margin performance to invest behind building our brands, with a 19% increase in advertising spending in 2023, and we expect higher levels of brand investment in 2024,” CEO Noel Wallace said in a statement.
The company is now expecting 2024 sales to grow 1% to 4%, including a low-single-digit impact from foreign exchange movements. The current FactSet consensus implies growth of 3.3%.
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The company expects gross profit margin expansion, increased advertising investment and double-digit EPS growth. Adjusted EPS is expected to grow by a mid to high-single-digit percent. The current FactSet consensus implies growth of 8%.
By geography, sales rose 18% in Latin America, as prices rose an average of 8% and volumes were up 8%. In North America, sales rose 3.5% as prices rose 3% and volumes rose 0.5%.
European sales were up 10% as prices rose 7.5% and volumes fell 4.0%. The Asia Pacific region saw sales rise 0.5% as prices rose 5.5% and volumes fell 4.5%. Africa/Eurasia sales fell 4% as prices rose 9.5% and volumes rose 7.5%.
Hill’s pet food sales were up 5% amid an 8.5% rise in prices and volumes fell 4%.
The company said it has a 41.1% share of the global toothpaste market and a 31.5% share of the manual toothbrush market.
The stock was up 0.7% premarket and has gained 7% in the last 12 months, while the S&P 500
SPX,
has gained 20.5%.
See also: Kimberly-Clark’s stock dented by weaker-than-expected fourth-quarter earnings
