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Can Colgate Revive North America Growth in the Second Half?
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Key Takeaways
Colgate expects sequential North America improvement, though recovery may be uneven amid soft category trends.
Premium toothpaste, Fabuloso expansion and accelerated innovation are central to Colgate's growth strategy.
CL plans higher advertising, targeted pricing and disciplined promotions to support market-share recovery.
Colgate-Palmolive Company (CL - Free Report) is stepping up efforts to improve its North America business after a challenging second quarter of 2026. Management expressed dissatisfaction with the region’s performance, which was hurt by category softness, heightened competitive activity and inventory reductions at key retailers. Consumer demand weakened sharply in May amid elevated gasoline prices and softer consumer confidence, though category trends improved in June and remained relatively stable in July. Consumption declined about 1% in the quarter, while shipments fell roughly 3%, reflecting retailer destocking. Importantly, category growth remains below historical levels, suggesting that a meaningful recovery may take time.
To improve the trajectory, Colgate is leaning on innovation, brand investment and more targeted pricing and promotional actions. The company plans to increase support behind premium toothpaste products, including Optic White Pro Series with ActivShine Technology, while expanding Fabuloso into new formats. Management is also accelerating its 2026 and 2027 innovation pipeline, particularly across premium offerings, an area where the company believes it remains under-indexed in North America. At the same time, Colgate identified selective price gaps versus competitors and intends to address them carefully without triggering broader promotional pressure. Higher advertising spending is also planned for the second half to strengthen brand visibility and support market-share recovery.
The second-half outlook, however, remains dependent on the health of consumer demand and category trends. Colgate expects sequential improvement in North America, but management cautioned that the recovery is unlikely to be linear and has not assumed a meaningful retailer inventory reload in its outlook. Instead, the company is focusing on factors it can control, including stronger new-product execution, competitive price-pack architecture, disciplined promotions and higher brand support. Broader consumer uncertainty and volatile category growth remain key risks. Still, if premium innovation gains traction and increased marketing spending translates into better consumption and market share, North America could become a more meaningful contributor to Colgate’s growth in the back half of 2026.
CL’s Zacks Rank & Share Price Performance
Shares of this Zacks Rank #3 (Hold) company have gained 5.8% in the past year, outperforming both the industry, which fell 8.9%, and the broader Consumer Staples sector, which rose 4.1%.
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 21.63X, which is higher than the industry average of 18.44X. 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
The Vita Coco Company, Inc. (COCO - Free Report) , a leading beverage company that develops, markets and distributes coconut water and other plant-based beverages, currently sports a Zacks Rank #1 (Strong Buy). COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and earnings per share (EPS) calls for growth of 31.6% and 63.8%, respectively, from the year-ago figures.
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. At present, CHEF flaunts a Zacks Rank #1.
The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 10.6% and 33.7%, respectively, from the year-ago reported figures. Chefs' Warehouse delivered a trailing four-quarter earnings surprise of 30.4%, on average.
Medifast, Inc. (MED - Free Report) , which is a leading manufacturer and distributor of clinically proven healthy living products and programs, currently carries a Zacks Rank #2 (Buy). MED missed the average earnings surprise by a sharp margin in the trailing four quarters.
The Zacks Consensus Estimate for Medifast’s current financial-year sales indicates a decline of 27.3% from the year-ago number.
View the Zacks #1 Rank List
Image: Bigstock
Can Colgate Revive North America Growth in the Second Half?
Key Takeaways
Colgate-Palmolive Company (CL - Free Report) is stepping up efforts to improve its North America business after a challenging second quarter of 2026. Management expressed dissatisfaction with the region’s performance, which was hurt by category softness, heightened competitive activity and inventory reductions at key retailers. Consumer demand weakened sharply in May amid elevated gasoline prices and softer consumer confidence, though category trends improved in June and remained relatively stable in July. Consumption declined about 1% in the quarter, while shipments fell roughly 3%, reflecting retailer destocking. Importantly, category growth remains below historical levels, suggesting that a meaningful recovery may take time.
To improve the trajectory, Colgate is leaning on innovation, brand investment and more targeted pricing and promotional actions. The company plans to increase support behind premium toothpaste products, including Optic White Pro Series with ActivShine Technology, while expanding Fabuloso into new formats. Management is also accelerating its 2026 and 2027 innovation pipeline, particularly across premium offerings, an area where the company believes it remains under-indexed in North America. At the same time, Colgate identified selective price gaps versus competitors and intends to address them carefully without triggering broader promotional pressure. Higher advertising spending is also planned for the second half to strengthen brand visibility and support market-share recovery.
The second-half outlook, however, remains dependent on the health of consumer demand and category trends. Colgate expects sequential improvement in North America, but management cautioned that the recovery is unlikely to be linear and has not assumed a meaningful retailer inventory reload in its outlook. Instead, the company is focusing on factors it can control, including stronger new-product execution, competitive price-pack architecture, disciplined promotions and higher brand support. Broader consumer uncertainty and volatile category growth remain key risks. Still, if premium innovation gains traction and increased marketing spending translates into better consumption and market share, North America could become a more meaningful contributor to Colgate’s growth in the back half of 2026.
CL’s Zacks Rank & Share Price Performance
Shares of this Zacks Rank #3 (Hold) company have gained 5.8% in the past year, outperforming both the industry, which fell 8.9%, and the broader Consumer Staples sector, which rose 4.1%.
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 21.63X, which is higher than the industry average of 18.44X. 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
The Vita Coco Company, Inc. (COCO - Free Report) , a leading beverage company that develops, markets and distributes coconut water and other plant-based beverages, currently sports a Zacks Rank #1 (Strong Buy). COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and earnings per share (EPS) calls for growth of 31.6% and 63.8%, respectively, from the year-ago figures.
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. At present, CHEF flaunts a Zacks Rank #1.
The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 10.6% and 33.7%, respectively, from the year-ago reported figures. Chefs' Warehouse delivered a trailing four-quarter earnings surprise of 30.4%, on average.
Medifast, Inc. (MED - Free Report) , which is a leading manufacturer and distributor of clinically proven healthy living products and programs, currently carries a Zacks Rank #2 (Buy). MED missed the average earnings surprise by a sharp margin in the trailing four quarters.
The Zacks Consensus Estimate for Medifast’s current financial-year sales indicates a decline of 27.3% from the year-ago number.