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Colgate's Q3 EPS rose 7% y/y to 97 cents, while sales grew 4.6% to $5.37B, both surpassing estimates.
CL's organic sales rose 3.6%, led by 1.7% volume growth and 2% pricing gains, while the gross margin expanded.
Colgate raised its 2026 Base Business earnings growth outlook to 5-7% and expects gross margin expansion.
Colgate-Palmolive Company (CL - Free Report) has posted third-quarter 2026 results, wherein earnings and sales beat the Zacks Consensus Estimate and improved year over year. Results benefited from higher organic sales, balanced volume and pricing growth, and productivity initiatives.
On a Base Business basis (non-GAAP basis), earnings were 97 cents per share, up 7% year over year and beating the Zacks Consensus Estimate of 92 cents.
Net sales increased 4.6% to $5.37 billion, surpassing the consensus mark of $5.33 billion. Organic sales grew 3.6%, supported by 1.7% volume growth and 2% pricing gains. Foreign exchange contributed 1% to net sales growth. The exit from the private-label pet food business reduced organic sales growth by 20 basis points (bps). Our model anticipated organic sales growth of 2.1% for the reported quarter.
This Zacks Rank #3 (Hold) company’s shares have gained 2% in the past three months compared with the industry’s 4.9% growth.
Image Source: Zacks Investment Research
CL's Margin Gains Reflect Productivity Efforts
The GAAP gross profit margin expanded 80 bps year over year to 60.2%, while Base Business gross margin improved 90 bps to 60.3%. Pricing contributed 80 bps, while funding-the-growth initiatives provided a 290-bps benefit. These gains helped offset a 300-bps impact from higher raw material costs.
Base Business operating profit increased 5% to $1.12 billion. The adjusted operating margin expanded 20 bps to 20.8%. GAAP operating profit increased 3% to $1.09 billion, although the reported operating margin contracted 30 bps to 20.3%.
Base Business selling, general and administrative expenses were $2.1 billion, with the expense rate increasing 70 bps to 39.1% of sales. Advertising spending climbed 15% to $775 million from $674 million a year ago, reflecting continued investments in premium innovation and brand support.
Our model expected selling, general and administrative expenses to be flat year over year at 38.4% of sales.
Colgate-Palmolive Company Price, Consensus and EPS Surprise
North America net sales declined 1.7%, while organic sales fell 1.6%. A 3.7% volume decline more than offset 2.2% pricing growth. The region accounted for 17% of total sales. Management highlighted continued softness in the U.S. market, although performance improved sequentially.
Latin America remained a major growth contributor, with net sales rising 12.5% and organic sales increasing 6%. Volume advanced 3.9%, while pricing improved 2.1%. Foreign exchange provided a 6.5% benefit. Brazil delivered double-digit organic sales growth, supported by both volume and pricing.
Europe, Middle East & Africa net sales increased 1.4%, while organic sales grew 2.7%. Volume growth of 3.5% offset a 0.9% pricing decline, while currency reduced reported growth by 1.2%.
Asia Pacific net sales advanced 3.5% and organic sales increased 4.6%, supported by 1.9% volume growth and 2.8% pricing gains. Foreign exchange had a negative 1.1% impact. India delivered double-digit growth, supported by premium toothpaste and manual toothbrushes.
Our model expected sales to decline 2.4% year over year in North America, rise 12% in Latin America, jump 2.8% in Europe, Middle East & Africa, and rise 4.5% in the Asia Pacific.
CL's Hill's Pet Nutrition Business Sustains Growth
Hill's Pet Nutrition net sales increased 5.6% to $1.21 billion, while organic sales rose 5.7%. Pricing improved 3.9%, and volume increased 1.8%. Excluding the impacts of exiting the private-label pet food business, organic sales growth was 6.4%. We expected sales for the Hill's Pet Nutrition segment to increase 2.6%.
Growth was broad-based across Prescription Diet and Science Diet, with particularly strong performance in cat nutrition. The Prime100 acquisition continued delivering double-digit organic growth. Hill's also expanded its U.S. fresh pet food offerings through the phased rollout of Science Diet Single Protein dog food.
Colgate's Cash Flow & Liquidity Position
Net cash provided by operations reached $2.91 billion in the first nine months of 2026 compared with $2.75 billion a year earlier. The free cash flow before dividends increased 7% to $2.51 billion from $2.36 billion.
Colgate ended September with $1.53 billion in cash and cash equivalents, and total debt of $7.72 billion. In the first nine months of 2026, the company paid out $1.31 billion in dividends and repurchased $927 million in treasury shares.
CL Raises Profitability Outlook for 2026
Colgate narrowed its 2026 net sales growth guidance to 4-5% from 2-6% previously. Organic sales growth is now expected to be broadly in line with the nine-month performance of 3% compared with the earlier guidance of 1-4%. Foreign exchange is expected to provide a low-single-digit positive contribution.
Management raised its GAAP and Base Business gross profit margin outlook to year-over-year growth from roughly flat previously. The company also increased its Base Business earnings growth guidance to 5-7% from mid-single-digit growth, while maintaining expectations for double-digit GAAP earnings growth.
Advertising spending is expected to rise both in dollar terms and as a percentage of net sales. Management continues to focus on productivity initiatives and premium, science-based innovation to offset elevated commodity, logistics and tariff-related costs.
Better-Ranked Stocks to Consider in the Consumer Staples Space
The Zacks Consensus Estimate for BJ’s current fiscal-year sales and EPS indicates growth of 11.7% and 6.8%, respectively, from the prior-year reported levels. BJ’s Wholesale delivered a trailing four-quarter earnings surprise of 4.8%, on average.
Purple Innovation Inc. (PRPL - Free Report) is a sleep products company that designs, manufactures and markets mattresses, pillows, bedding and related comfort products through direct-to-consumer channels, wholesale retail partners and company-operated showrooms. The company currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Purple Innovation’s 2026 sales indicates a decline of 8.5% from the year-ago reported number. PRPL delivered a trailing four-quarter earnings surprise of 21.3%, on average.
Warby Parker Inc. (WRBY - Free Report) , which sells eyewear products through its retail and e-commerce platform in the United States and Canada, currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Warby Parker’s 2026 sales and EPS indicates growth of 11.5% and 37.5%, respectively, from the prior-year reported levels. WRBY delivered a trailing four-quarter negative earnings surprise of 15.1%, on average.
View the Zacks #1 Rank List
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Colgate Q3 Earnings Beat Estimates on Organic Sales & Pricing Gains
Key Takeaways
Colgate-Palmolive Company (CL - Free Report) has posted third-quarter 2026 results, wherein earnings and sales beat the Zacks Consensus Estimate and improved year over year. Results benefited from higher organic sales, balanced volume and pricing growth, and productivity initiatives.
On a Base Business basis (non-GAAP basis), earnings were 97 cents per share, up 7% year over year and beating the Zacks Consensus Estimate of 92 cents.
Net sales increased 4.6% to $5.37 billion, surpassing the consensus mark of $5.33 billion. Organic sales grew 3.6%, supported by 1.7% volume growth and 2% pricing gains. Foreign exchange contributed 1% to net sales growth. The exit from the private-label pet food business reduced organic sales growth by 20 basis points (bps). Our model anticipated organic sales growth of 2.1% for the reported quarter.
This Zacks Rank #3 (Hold) company’s shares have gained 2% in the past three months compared with the industry’s 4.9% growth.
Image Source: Zacks Investment Research
CL's Margin Gains Reflect Productivity Efforts
The GAAP gross profit margin expanded 80 bps year over year to 60.2%, while Base Business gross margin improved 90 bps to 60.3%. Pricing contributed 80 bps, while funding-the-growth initiatives provided a 290-bps benefit. These gains helped offset a 300-bps impact from higher raw material costs.
Base Business operating profit increased 5% to $1.12 billion. The adjusted operating margin expanded 20 bps to 20.8%. GAAP operating profit increased 3% to $1.09 billion, although the reported operating margin contracted 30 bps to 20.3%.
Base Business selling, general and administrative expenses were $2.1 billion, with the expense rate increasing 70 bps to 39.1% of sales. Advertising spending climbed 15% to $775 million from $674 million a year ago, reflecting continued investments in premium innovation and brand support.
Our model expected selling, general and administrative expenses to be flat year over year at 38.4% of sales.
Colgate-Palmolive Company Price, Consensus and EPS Surprise
Colgate-Palmolive Company price-consensus-eps-surprise-chart | Colgate-Palmolive Company Quote
Colgate's Regional Sales Performance Remains Mixed
North America net sales declined 1.7%, while organic sales fell 1.6%. A 3.7% volume decline more than offset 2.2% pricing growth. The region accounted for 17% of total sales. Management highlighted continued softness in the U.S. market, although performance improved sequentially.
Latin America remained a major growth contributor, with net sales rising 12.5% and organic sales increasing 6%. Volume advanced 3.9%, while pricing improved 2.1%. Foreign exchange provided a 6.5% benefit. Brazil delivered double-digit organic sales growth, supported by both volume and pricing.
Europe, Middle East & Africa net sales increased 1.4%, while organic sales grew 2.7%. Volume growth of 3.5% offset a 0.9% pricing decline, while currency reduced reported growth by 1.2%.
Asia Pacific net sales advanced 3.5% and organic sales increased 4.6%, supported by 1.9% volume growth and 2.8% pricing gains. Foreign exchange had a negative 1.1% impact. India delivered double-digit growth, supported by premium toothpaste and manual toothbrushes.
Our model expected sales to decline 2.4% year over year in North America, rise 12% in Latin America, jump 2.8% in Europe, Middle East & Africa, and rise 4.5% in the Asia Pacific.
CL's Hill's Pet Nutrition Business Sustains Growth
Hill's Pet Nutrition net sales increased 5.6% to $1.21 billion, while organic sales rose 5.7%. Pricing improved 3.9%, and volume increased 1.8%. Excluding the impacts of exiting the private-label pet food business, organic sales growth was 6.4%. We expected sales for the Hill's Pet Nutrition segment to increase 2.6%.
Growth was broad-based across Prescription Diet and Science Diet, with particularly strong performance in cat nutrition. The Prime100 acquisition continued delivering double-digit organic growth. Hill's also expanded its U.S. fresh pet food offerings through the phased rollout of Science Diet Single Protein dog food.
Colgate's Cash Flow & Liquidity Position
Net cash provided by operations reached $2.91 billion in the first nine months of 2026 compared with $2.75 billion a year earlier. The free cash flow before dividends increased 7% to $2.51 billion from $2.36 billion.
Colgate ended September with $1.53 billion in cash and cash equivalents, and total debt of $7.72 billion. In the first nine months of 2026, the company paid out $1.31 billion in dividends and repurchased $927 million in treasury shares.
CL Raises Profitability Outlook for 2026
Colgate narrowed its 2026 net sales growth guidance to 4-5% from 2-6% previously. Organic sales growth is now expected to be broadly in line with the nine-month performance of 3% compared with the earlier guidance of 1-4%. Foreign exchange is expected to provide a low-single-digit positive contribution.
Management raised its GAAP and Base Business gross profit margin outlook to year-over-year growth from roughly flat previously. The company also increased its Base Business earnings growth guidance to 5-7% from mid-single-digit growth, while maintaining expectations for double-digit GAAP earnings growth.
Advertising spending is expected to rise both in dollar terms and as a percentage of net sales. Management continues to focus on productivity initiatives and premium, science-based innovation to offset elevated commodity, logistics and tariff-related costs.
Better-Ranked Stocks to Consider in the Consumer Staples Space
BJ’s Wholesale Club Holdings, Inc. (BJ - Free Report) is a leading membership-based warehouse club operator concentrated primarily in the eastern half of the United States. It currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for BJ’s current fiscal-year sales and EPS indicates growth of 11.7% and 6.8%, respectively, from the prior-year reported levels. BJ’s Wholesale delivered a trailing four-quarter earnings surprise of 4.8%, on average.
Purple Innovation Inc. (PRPL - Free Report) is a sleep products company that designs, manufactures and markets mattresses, pillows, bedding and related comfort products through direct-to-consumer channels, wholesale retail partners and company-operated showrooms. The company currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Purple Innovation’s 2026 sales indicates a decline of 8.5% from the year-ago reported number. PRPL delivered a trailing four-quarter earnings surprise of 21.3%, on average.
Warby Parker Inc. (WRBY - Free Report) , which sells eyewear products through its retail and e-commerce platform in the United States and Canada, currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Warby Parker’s 2026 sales and EPS indicates growth of 11.5% and 37.5%, respectively, from the prior-year reported levels. WRBY delivered a trailing four-quarter negative earnings surprise of 15.1%, on average.