Consumer-goods giant Colgate-Palmolive Co. posted better-than-expected third-quarter earnings early Friday, as it again raised prices by an average of 9.5% globally.
The parent to home, personal, oral and pet-care products has repeatedly raised prices to combat inflationary pressures, boosting its profit margins. Procter & Gamble, which makes Crest toothpaste, also raised prices to boost margins in its earnings posted last week.
Colgate posted net income of $708 million, or 86 cents a share, for the quarter, up from $618 million, or 74 cents a share, in the year-earlier period.
Adjusted per-share earnings also came to 86 cents, ahead of the 80 cent FactSet consensus.
Sales rose to $4.915 billion from $4.455 billion a year ago, above the $4.814 billion FactSet consensus.
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The company said its base business gross profit margin rose 140 basis points to 58.6%, and was up 190 bps, excluding a negative 50 bps impact from private label sales stemming from the previously disclosed acquisitions of its pet food business.
Colgate’s leading position in toothpaste continued with a global market share of 41% in the year to date. In the manual toothbrush market, it retained a share of 31.5% in the year to date.
“This was our third quarter of sequential improvement in gross profit margin and our second quarter in a row delivering double-digit operating profit growth along with a double-digit increase in advertising spending,” Chief Executive Noel Wallace said in a statement.
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By geography, sales rose 3.5% in North America, where it raised prices by 7.5%. Volumes fell 4%, however. In Latin America, sales rose 20%, after it raised prices by 9.5%. Volume rose 5.5%.
In Europe, sales were up 14.5% as it raised prices by 11%. Volumes in Europe fell 4%. In Asia Pacific, sales fell 4% after it raised prices by 5.5%. Volume fell by 7%.
In Africa/Eurasia, sales fell 7.5% after it raised prices by 11.5%. Volume fell by 4%.
Sales in the company’s Hill’s pet food division rose 21.5% after it raised prices by 12%. Volume rose 9%.
The company said it now expects full-year sales to grow 6% to 8%, compared with prior guidance of 5% to 8%. It expects adjusted EPS growth in the high-single digits, up from prior guidance of the high end of mid-single digits.
The stock was flat premarket but is down 7% in the year to date, while the S&P 500
SPX,
has gained 7.8%.
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