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CL's Q2 Revenues Rise 4.9%: Can Growth Hold Amid Global Volatility?
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Key Takeaways
CL's Q2 revenues rose 4.9% to $5.36B, with organic sales growth in four of five divisions.
Emerging markets led growth, with India up double digits and Brazil, Mexico and China also advancing.
CL expects more volume-led growth as raw-material costs and tariffs rise from second-quarter levels.
Colgate-Palmolive Company (CL - Free Report) delivered a solid second-quarter 2026 performance despite a volatile global operating backdrop, supported by broad-based sales growth, emerging-market momentum and resilient execution across much of its portfolio. Organic sales increased in four of its five divisions and three of its four categories, with emerging markets leading growth, with strength in India, Brazil, Mexico and China. Europe also benefited from innovation, premiumization and market-share gains, while Hill’s Pet Nutrition continued to outperform its category. However, weakness in the United States, heightened competitive activity and cautious consumer spending remain key hurdles as CL enters the second half.
CL’s second-quarter revenues totaled $5.36 billion, up 4.9% year over year, while earnings came in at 99 cents per share. Free cash flow increased 18%, helping the company return $1.4 billion to its shareholders. Gross margin expanded 100 basis points year over year and improved 90 basis points sequentially, supported by pricing, favorable mix, productivity initiatives and revenue growth management. Latin America grew about 5%, reflecting a balanced 2.8% increase in pricing and 2.6% volume growth, with Brazil advancing high single digits and Mexico growing mid-single digits. Hill’s generated roughly 4% organic growth excluding private label, despite an approximately 200-basis-point drag on volume from the private-label exit. Meanwhile, India posted double-digit growth and Greater China advanced at a mid-single-digit pace despite a challenging category environment.
Looking ahead, sustaining this momentum will depend on CL’s ability to offset softer category trends and mounting cost pressures. Management expects growth to become somewhat more volume-driven in the second half while raw-material costs and tariffs rise from second-quarter levels. The company is stepping up advertising, premium innovation and targeted pricing and promotional actions to improve its U.S. trajectory, while continuing to scale revenue growth management, Promo AI, digital capabilities and productivity programs globally. Although consumer uncertainty, geopolitical tensions and inflation could restrain category growth, CL’s geographic diversification and focus on premium products may help it outperform underlying markets and preserve earnings momentum.
CL’s Zacks Rank & Share Price Performance
Shares of this Zacks Rank #3 (Hold) company have gained 5.1% in the past year, outperforming both the industry, which fell 8.7%, and the broader Consumer Staples sector, which rose 1.6%.
CL Stock's Past Year Performance
Image Source: Zacks Investment Research
Is CL a Value Play Stock?
Colgate currently trades at a forward 12-month P/E ratio of 22.61X, which is higher than the industry average of 18.12X. This valuation positions the stock at a premium relative to both its sector and industry peers, suggesting that investors may be pricing in stronger growth prospects, brand strength or operational efficiency compared with competitors.
CL P/E Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Stocks to Consider
Darling Ingredients Inc. (DAR - Free Report) develops, produces and sells sustainable natural ingredients from edible and inedible bio-nutrients. At present, Darling Ingredients sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Darling Ingredients’ current fiscal-year sales and earnings implies growth of 12.8% and 926.5%, respectively, from the year-ago figures. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.
The J. M. Smucker Company (SJM - Free Report) , which manufactures and markets branded food and beverage products, carries a Zacks Rank #2 (Buy) at present. SJM delivered a trailing four-quarter earnings surprise of 1.5%, on average.
The Zacks Consensus Estimate for J. M. Smucker’s current fiscal-year earnings indicates growth of 8.9% from the year-ago figures.
US Foods Holding Corp. (USFD - Free Report) engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. It currently carries a Zacks Rank of 2. USFD delivered a trailing four-quarter earnings surprise of 1.5%, on average.
The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.3% and 16.3%, respectively, from the year-ago figures.
View the Zacks #1 Rank List
Image: Bigstock
CL's Q2 Revenues Rise 4.9%: Can Growth Hold Amid Global Volatility?
Key Takeaways
Colgate-Palmolive Company (CL - Free Report) delivered a solid second-quarter 2026 performance despite a volatile global operating backdrop, supported by broad-based sales growth, emerging-market momentum and resilient execution across much of its portfolio. Organic sales increased in four of its five divisions and three of its four categories, with emerging markets leading growth, with strength in India, Brazil, Mexico and China. Europe also benefited from innovation, premiumization and market-share gains, while Hill’s Pet Nutrition continued to outperform its category. However, weakness in the United States, heightened competitive activity and cautious consumer spending remain key hurdles as CL enters the second half.
CL’s second-quarter revenues totaled $5.36 billion, up 4.9% year over year, while earnings came in at 99 cents per share. Free cash flow increased 18%, helping the company return $1.4 billion to its shareholders. Gross margin expanded 100 basis points year over year and improved 90 basis points sequentially, supported by pricing, favorable mix, productivity initiatives and revenue growth management. Latin America grew about 5%, reflecting a balanced 2.8% increase in pricing and 2.6% volume growth, with Brazil advancing high single digits and Mexico growing mid-single digits. Hill’s generated roughly 4% organic growth excluding private label, despite an approximately 200-basis-point drag on volume from the private-label exit. Meanwhile, India posted double-digit growth and Greater China advanced at a mid-single-digit pace despite a challenging category environment.
Looking ahead, sustaining this momentum will depend on CL’s ability to offset softer category trends and mounting cost pressures. Management expects growth to become somewhat more volume-driven in the second half while raw-material costs and tariffs rise from second-quarter levels. The company is stepping up advertising, premium innovation and targeted pricing and promotional actions to improve its U.S. trajectory, while continuing to scale revenue growth management, Promo AI, digital capabilities and productivity programs globally. Although consumer uncertainty, geopolitical tensions and inflation could restrain category growth, CL’s geographic diversification and focus on premium products may help it outperform underlying markets and preserve earnings momentum.
CL’s Zacks Rank & Share Price Performance
Shares of this Zacks Rank #3 (Hold) company have gained 5.1% in the past year, outperforming both the industry, which fell 8.7%, and the broader Consumer Staples sector, which rose 1.6%.
CL Stock's Past Year Performance
Image Source: Zacks Investment Research
Is CL a Value Play Stock?
Colgate currently trades at a forward 12-month P/E ratio of 22.61X, which is higher than the industry average of 18.12X. This valuation positions the stock at a premium relative to both its sector and industry peers, suggesting that investors may be pricing in stronger growth prospects, brand strength or operational efficiency compared with competitors.
CL P/E Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Stocks to Consider
Darling Ingredients Inc. (DAR - Free Report) develops, produces and sells sustainable natural ingredients from edible and inedible bio-nutrients. At present, Darling Ingredients sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Darling Ingredients’ current fiscal-year sales and earnings implies growth of 12.8% and 926.5%, respectively, from the year-ago figures. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.
The J. M. Smucker Company (SJM - Free Report) , which manufactures and markets branded food and beverage products, carries a Zacks Rank #2 (Buy) at present. SJM delivered a trailing four-quarter earnings surprise of 1.5%, on average.
The Zacks Consensus Estimate for J. M. Smucker’s current fiscal-year earnings indicates growth of 8.9% from the year-ago figures.
US Foods Holding Corp. (USFD - Free Report) engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. It currently carries a Zacks Rank of 2. USFD delivered a trailing four-quarter earnings surprise of 1.5%, on average.
The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.3% and 16.3%, respectively, from the year-ago figures.