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Colgate-Palmolive Company (CL - Free Report) has reported third-quarter 2023 results, wherein the top and bottom lines beat the Zacks Consensus Estimate and improved year over year.
On a Base Business basis (non-GAAP basis), earnings were 86 cents per share, up 16% from the prior-year period. The bottom line surpassed the Zacks Consensus Estimate of 80 cents.
Net sales of $4,915 million increased 10.5% from the year-ago quarter and beat the Zacks Consensus Estimate of $4,816 million. On an organic basis, the company’s sales advanced 9%.
Total volumes declined 0.5% on an organic basis, while pricing was up 9.5%. The favorable currency impact in the quarter was 0.5%.
Gross profit of $2,877 million increased 13% year over year. The gross profit margin expanded 130 basis points (bps) to 58.5% on a GAAP basis and 140 bps to 58.6% on an adjusted basis. This includes an adverse impact of 50 bps from private-label sales resulting from the previously disclosed acquisitions of the pet food business. We had expected a gross profit margin of 57.7% for the quarter under discussion.
Selling, general and administrative (SG&A) expenses grew 11.5% year over year to $1,822 million. As a percentage of net sales, SG&A expenses expanded 40 bps year over year to 37.1%, whereas our estimate was pegged at 36.7%.
Colgate’s global market share in the manual toothbrushes category has reached 31.5% year to date. The company has maintained its leadership position in the global toothpaste market, with a market share of 41% year to date.
Colgate-Palmolive Company Price, Consensus and EPS Surprise
North America’s net sales (20% of total sales) rose 3.5% year over year. The segment gained from a 7.5% increase in pricing, offset by a 4% decline in volume. Organic sales growth in oral care and personal care. Year to date, Colgate’s share in the toothpaste and manual toothbrush markets is 33.7% and 40.9%, respectively, in the United States.
Latin America’s net sales (24% of total sales) advanced 20% year over year on 9.5% pricing gains, a 5.5% increase in volume and a 5% favorable currency impact. On an organic basis, sales were up 15%, led by growth in Mexico, Argentina, Brazil and Colombia.
Europe’s net sales (15% of the total sales) increased 14.5% year over year on a reported basis. The segment was driven by an 11% pricing gain and a 7.5% favorable currency impact, partly offset by a 4% decrease in volume. Organic sales were up 7%, driven by Germany and the U.K.
The Asia Pacific segment’s net sales (14% of the total sales) decreased 4% year over year, reflecting a 7% decline in volumes and a 2.5% impact of adverse currency, partly offset by a 5.5% rise in pricing. Organic sales fell 1.5% due to weakness in the Greater China region, partly offset by gains in India and the Philippines.
Africa/Eurasia’s net sales (5% of the total sales) declined 7.5% year over year due to a 23% unfavorable currency impact, offset by a 4% increase in volume and 11.5% growth in pricing. Organic sales for the segment grew 15.5%, driven by growth in Turkiye, Eurasia, Nigeria and South Africa.
Hill’s Pet Nutrition’s net sales (22% of the total sales) improved 21.5% from the year-ago quarter on a reported basis and 15% on an organic basis. Results gained from a 12% increase in pricing and volume growth of 9% on a reported basis, a 3% rise in organic volume and a 0.5% positive currency impact. Organic sales were aided by gains in the United States and Europe.
Other Financial Details
Colgate-Palmolive ended the quarter with cash and cash equivalents of $951 million and total debt of $8,724 million. Net cash provided by operating activities was $2,609 million for the nine months ended Sep 30, 2023. The free cash flow before dividends was $2,101 million.
Outlook
Management raised its sales and profit forecast for 2023. Colgate-Palmolive anticipates net sales growth of 6-8% compared with the prior mentioned 5-8%. The current projection reflects gains from the acquisitions of pet food businesses, offset by a low-single-digit adverse currency impact. It anticipates full-year organic sales growth of 7-8% compared with the earlier stated 5-7%.
The company foresees adjusted gross profit margin expansion and increased advertising investment. This Zacks Rank #3 (Hold) company expects adjusted earnings per share to grow in the high-single digits compared with the prior stated mid-single digit growth.
Image Source: Zacks Investment Research
Shares of CL have lost 2.7% in the past three months compared with the industry’s decline of 5.9%.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggests growth of 27.8% and 21.8%, respectively, from the year-ago reported numbers.
The J. M. Smucker Company (SJM - Free Report) , a branded food and beverage product company, currently carries a Zacks Rank #2 (Buy). SJM has a trailing four-quarter earnings surprise of 7.3%, on average.
The Zacks Consensus Estimate for J. M. Smucker’s current fiscal-year earnings suggests growth of 8.9% from the year-ago reported figure.
Celsius Holdings (CELH - Free Report) , which offers functional drinks and liquid supplements, currently carries a Zacks Rank #2. CELH delivered an earnings surprise of 100% in the last reported quarter.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year sales and earnings suggests growth of 88.9% and 170.3%, respectively, from the year-ago reported numbers.
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Colgate (CL) Beats Q3 Earnings & Sales Estimates, Raises View
Colgate-Palmolive Company (CL - Free Report) has reported third-quarter 2023 results, wherein the top and bottom lines beat the Zacks Consensus Estimate and improved year over year.
On a Base Business basis (non-GAAP basis), earnings were 86 cents per share, up 16% from the prior-year period. The bottom line surpassed the Zacks Consensus Estimate of 80 cents.
Net sales of $4,915 million increased 10.5% from the year-ago quarter and beat the Zacks Consensus Estimate of $4,816 million. On an organic basis, the company’s sales advanced 9%.
Total volumes declined 0.5% on an organic basis, while pricing was up 9.5%. The favorable currency impact in the quarter was 0.5%.
Gross profit of $2,877 million increased 13% year over year. The gross profit margin expanded 130 basis points (bps) to 58.5% on a GAAP basis and 140 bps to 58.6% on an adjusted basis. This includes an adverse impact of 50 bps from private-label sales resulting from the previously disclosed acquisitions of the pet food business. We had expected a gross profit margin of 57.7% for the quarter under discussion.
Selling, general and administrative (SG&A) expenses grew 11.5% year over year to $1,822 million. As a percentage of net sales, SG&A expenses expanded 40 bps year over year to 37.1%, whereas our estimate was pegged at 36.7%.
Colgate’s global market share in the manual toothbrushes category has reached 31.5% year to date. The company has maintained its leadership position in the global toothpaste market, with a market share of 41% year to date.
Colgate-Palmolive Company Price, Consensus and EPS Surprise
Colgate-Palmolive Company price-consensus-eps-surprise-chart | Colgate-Palmolive Company Quote
Segmental Discussion
North America’s net sales (20% of total sales) rose 3.5% year over year. The segment gained from a 7.5% increase in pricing, offset by a 4% decline in volume. Organic sales growth in oral care and personal care. Year to date, Colgate’s share in the toothpaste and manual toothbrush markets is 33.7% and 40.9%, respectively, in the United States.
Latin America’s net sales (24% of total sales) advanced 20% year over year on 9.5% pricing gains, a 5.5% increase in volume and a 5% favorable currency impact. On an organic basis, sales were up 15%, led by growth in Mexico, Argentina, Brazil and Colombia.
Europe’s net sales (15% of the total sales) increased 14.5% year over year on a reported basis. The segment was driven by an 11% pricing gain and a 7.5% favorable currency impact, partly offset by a 4% decrease in volume. Organic sales were up 7%, driven by Germany and the U.K.
The Asia Pacific segment’s net sales (14% of the total sales) decreased 4% year over year, reflecting a 7% decline in volumes and a 2.5% impact of adverse currency, partly offset by a 5.5% rise in pricing. Organic sales fell 1.5% due to weakness in the Greater China region, partly offset by gains in India and the Philippines.
Africa/Eurasia’s net sales (5% of the total sales) declined 7.5% year over year due to a 23% unfavorable currency impact, offset by a 4% increase in volume and 11.5% growth in pricing. Organic sales for the segment grew 15.5%, driven by growth in Turkiye, Eurasia, Nigeria and South Africa.
Hill’s Pet Nutrition’s net sales (22% of the total sales) improved 21.5% from the year-ago quarter on a reported basis and 15% on an organic basis. Results gained from a 12% increase in pricing and volume growth of 9% on a reported basis, a 3% rise in organic volume and a 0.5% positive currency impact. Organic sales were aided by gains in the United States and
Europe.
Other Financial Details
Colgate-Palmolive ended the quarter with cash and cash equivalents of $951 million and total debt of $8,724 million. Net cash provided by operating activities was $2,609 million for the nine months ended Sep 30, 2023. The free cash flow before dividends was $2,101 million.
Outlook
Management raised its sales and profit forecast for 2023. Colgate-Palmolive anticipates net sales growth of 6-8% compared with the prior mentioned 5-8%. The current projection reflects gains from the acquisitions of pet food businesses, offset by a low-single-digit adverse currency impact. It anticipates full-year organic sales growth of 7-8% compared with the earlier stated 5-7%.
The company foresees adjusted gross profit margin expansion and increased advertising investment. This Zacks Rank #3 (Hold) company expects adjusted earnings per share to grow in the high-single digits compared with the prior stated mid-single digit growth.
Image Source: Zacks Investment Research
Shares of CL have lost 2.7% in the past three months compared with the industry’s decline of 5.9%.
Stocks to Consider
Lamb Weston (LW - Free Report) , which offers frozen potato products, currently sports a Zacks Rank #1 (Strong Buy). LW delivered an earnings surprise of 46.2% in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggests growth of 27.8% and 21.8%, respectively, from the year-ago reported numbers.
The J. M. Smucker Company (SJM - Free Report) , a branded food and beverage product company, currently carries a Zacks Rank #2 (Buy). SJM has a trailing four-quarter earnings surprise of 7.3%, on average.
The Zacks Consensus Estimate for J. M. Smucker’s current fiscal-year earnings suggests growth of 8.9% from the year-ago reported figure.
Celsius Holdings (CELH - Free Report) , which offers functional drinks and liquid supplements, currently carries a Zacks Rank #2. CELH delivered an earnings surprise of 100% in the last reported quarter.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year sales and earnings suggests growth of 88.9% and 170.3%, respectively, from the year-ago reported numbers.