CL
A beat, but not a victory lap
Colgate-Palmolive did what consumer-staples giants are supposed to do: sell toothpaste, toothbrushes, and enough everyday essentials to keep the cash machine humming. First-quarter adjusted EPS came in at 97 cents, ahead of Wall Street’s 94-cent guess, and revenue of $5.324 billion also cleared expectations.
The market liked the headline beat — shares were up 3.42% Friday — but the numbers underneath had a bit of a “thanks, but not thanks” vibe. Operating profit fell to $964 million from $1.076 billion a year ago, and operating margin slipped to 18.1% from 21.9%. So yes, the aisle is still working. It’s just getting more expensive to stock it.
The middle of the world is hitting the margins
Colgate said the follow-on effects of the conflict in the Middle East are pressuring raw material, packaging, and logistics costs, while also threatening consumer spending globally. That’s the kind of sentence that makes investors sit up: higher costs on one side, shakier demand on the other.
Regional performance was a mixed bag:
- North America sales fell 1.8%, with operating profit down 28%
- Latin America sales jumped 14.8%, with operating profit up 15%
- Europe, Middle East and Africa posted an 11.9% sales gain and 20% higher operating profit
So the business isn’t breaking — it’s just being pulled in a few directions at once, like a group chat nobody can agree on.
Bigger spending now, savings later
The board also expanded Colgate’s Strategic Growth and Productivity Program, which is corporate-speak for: spend more now, hope the machine runs smoother later. Total pretax charges are now pegged at $350 million to $550 million, up from prior estimates, but the company says annual pretax savings should land between $200 million and $300 million once the program is fully in place by 2028.
For 2026, Colgate stuck to its sales outlook of $20.79 billion to $21.605 billion, and still expects organic sales growth of 1% to 4%. But it also flipped its gross-margin expectation from improving to declining, which is the part investors tend to circle in red pen.
Big picture: Colgate still looks like the kind of boring business that can quietly compound over time — but even boring businesses are feeling the squeeze when geopolitics, inflation, and consumers all get cranky at once.