Colgate-Palmolive's first quarter results were shaped by weaker consumer demand and category softness across key markets, with management attributing volume stagnation to both macroeconomic uncertainty and retailer destocking. CEO Noel Wallace noted that while core product use remains resilient, consumer caution led to some pantry de-loading, particularly in February. He highlighted, “We believe that consumers are still brushing their teeth, taking showers, cleaning their floors, and feeding their pets.” Management also pointed to the early signs of stabilization in category trends by April, but acknowledged that the quarter remained challenging due to these headwinds.
Is now the time to buy CL? Find out in our full research report (it’s free).
Colgate-Palmolive (CL) Q1 CY2025 Highlights:
- Revenue: $4.91 billion vs analyst estimates of $4.88 billion (3.1% year-on-year decline, 0.6% beat)
- Adjusted EPS: $0.91 vs analyst estimates of $0.86 (6.1% beat)
- Adjusted EBITDA: $1.24 billion vs analyst estimates of $1.2 billion (25.2% margin, 3.2% beat)
- Operating Margin: 21.9%, up from 20.7% in the same quarter last year
- Organic Revenue rose 1.4% year on year (9.8% in the same quarter last year)
- Sales Volumes were flat year on year (1.3% in the same quarter last year)
- Market Capitalization: $71.14 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Colgate-Palmolive’s Q1 Earnings Call
- Peter Grom (UBS) asked about category consumption trends moving into April. CEO Noel Wallace responded that early April showed some stabilization, but cautioned that full recovery may not occur until the second half of the year.
- Andrea Teixeira (JPMorgan) inquired about competitive pressures and innovation in North America. Wallace said promotional intensity remains stable, with renewed focus on innovation and price-pack architecture to drive volume recovery.
- Filippo Falorni (Citi) queried how pricing strategies will evolve amid tariffs. Wallace explained that price increases will be targeted by market and category, but innovation and mix improvement are preferred tools over broad-based price hikes.
- Bryan Spillane (Bank of America) requested clarification on the impact of exiting private label pet food on Hill’s. CFO Stan Sutula confirmed the exit will be complete by Q3, with short-term volume drag offset by improved margins and underlying brand strength.
- Kevin Grundy (BNC) pressed for details on tariff sourcing and mitigation. Sutula said most tariffs affect materials from China and the U.S., with offset plans centered on supply chain flexibility, productivity, and revenue growth management.
Catalysts in Upcoming Quarters
In the coming quarters, our team will watch (1) whether category volumes recover as economic conditions stabilize, (2) the effectiveness of new product launches and innovation in offsetting weak demand, and (3) progress on mitigating tariff costs through operational changes and pricing. Performance in key emerging markets and the pace of private label pet food exit will also be important signposts for Colgate-Palmolive’s execution.
Colgate-Palmolive currently trades at $87.85, down from $92.69 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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