Financial Performance - Net sales increased by 1.0%[22] - Organic sales increased by 1.8%, including a 0.6% negative impact from lower private label pet sales[22] - Base Business EPS increased by 1%[22] Guidance - Net sales growth is still expected to be up low single digits, now including a flat to low-single-digit negative impact from foreign exchange[29] - Organic sales growth is now expected to be at the low end of 2% to 4%, including the impact over the course of 2025 of the planned exit from private label pet sales[32] - GAAP EPS is still expected to be up low single digits[29] - Base Business EPS is still expected to be up low single digits[32] Productivity Program - A new three-year productivity program is projected to result in cumulative pre-tax charges totaling between $200 and $300 million[26] Raw Material Costs - The company's current expectation for incremental tariff impact is approximately $75 million[36] Market Share - Global toothpaste market share was up 20 basis points on a volume basis year to date[22] Company Overview - Colgate-Palmolive is a $20.1B global consumer products company[7]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Colgate-Palmolive reported modest Q2 2025 growth with 1.0% net sales and 1.8% organic sales increase, despite a 50 bps GAAP gross profit margin decline Q2 2025 Key Financial Results (YoY) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **GAAP Results** | | | | | Net Sales | $5,110M | $5,058M | +1.0% | | GAAP EPS (diluted) | $0.91 | $0.89 | +2% | | GAAP Gross Profit Margin | 60.1% | 60.6% | -50 bps | | **Non-GAAP (Base Business) Results** | | | | | Organic Sales Growth | - | - | +1.8% | | Base Business EPS (diluted) | $0.92 | $0.91 | +1% | - Net cash provided by operations for the first six months of 2025 amounted to **$1,484 million**[3](index=3&type=chunk) - The company maintained global market leadership year-to-date in toothpaste with **41.1% share** and manual toothbrushes with **32.4% share**[3](index=3&type=chunk) [Business Outlook and Strategic Initiatives](index=2&type=section&id=Business%20Outlook%20and%20Strategic%20Initiatives) Colgate-Palmolive updated its full-year 2025 guidance, expecting organic sales growth at the low end of 2-4%, and announced a new three-year productivity program with $200-$300 million in pre-tax charges Full Year 2025 Guidance | Metric | Guidance | | :--- | :--- | | Net Sales Growth | Up low single digits | | Foreign Exchange Impact | Flat to low-single-digit negative | | Organic Sales Growth | Low end of 2% to 4% | | GAAP Gross Profit Margin | Roughly flat | | GAAP EPS Growth | Up low single digits | | Non-GAAP Gross Profit Margin | Roughly flat | | Non-GAAP EPS Growth | Up low single digits | - A new three-year productivity program is expected to incur cumulative pre-tax charges of **$200-$300 million** by December 31, 2028[5](index=5&type=chunk) [Divisional Performance](index=3&type=section&id=Divisional%20Performance) Q2 2025 divisional performance varied, with strong net sales growth in Europe and Africa/Eurasia, declines in North and Latin America, and varied operating profit trends Q2 2025 Net Sales Growth by Division (% change vs. Q2 2024) | Division | % of Total Sales | Net Sales | Organic Sales* | Pricing | FX | | :--- | :--- | :--- | :--- | :--- | :--- | | North America | 20% | -1.0% | -0.9% | -0.5% | -0.1% | | Latin America | 24% | -4.8% | +3.4% | +3.0% | -8.2% | | Europe | 14% | +7.8% | +2.0% | +2.2% | +5.7% | | Asia Pacific | 13% | +0.8% | —% | +1.6% | +0.9% | | Africa/Eurasia | 6% | +8.0% | +7.7% | +3.4% | +0.2% | | Hill's | 23% | +3.8% | +2.0% | +2.9% | +0.8% | | **Total Company** | **100%** | **+1.0%** | **+1.8%** | **+2.0%** | **-1.0%** | Q2 2025 Operating Profit by Division | Division | Operating Profit ($M) | % Change vs Q2 2024 | % to Net Sales | Change (bps) | | :--- | :--- | :--- | :--- | :--- | | North America | $194 | -9% | 18.9% | -170 | | Latin America | $367 | -12% | 30.4% | -250 | | Europe | $184 | 9% | 25.0% | +40 | | Asia Pacific | $187 | -4% | 27.2% | -150 | | Africa/Eurasia | $65 | 1% | 22.0% | -140 | | Hill's | $264 | 13% | 22.9% | +180 | | **Total Company** | **$1,080** | **-1%** | **21.1%** | **-50** | [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated statements of income, balance sheet, and cash flows for the reported periods [Statements of Income](index=7&type=section&id=Statements%20of%20Income) Q2 2025 net sales slightly increased to $5,110 million while operating profit decreased, whereas six-month net sales marginally declined but operating profit improved Condensed Consolidated Statements of Income (For the Three Months Ended June 30) | ($ in Millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net sales | $5,110 | $5,058 | | Gross profit | $3,069 | $3,066 | | Operating profit | $1,080 | $1,092 | | Net income attributable to Colgate-Palmolive | $743 | $731 | | Diluted EPS | $0.91 | $0.89 | Condensed Consolidated Statements of Income (For the Six Months Ended June 30) | ($ in Millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net sales | $10,021 | $10,124 | | Gross profit | $6,056 | $6,105 | | Operating profit | $2,156 | $2,139 | | Net income attributable to Colgate-Palmolive | $1,433 | $1,414 | | Diluted EPS | $1.76 | $1.71 | [Balance Sheet](index=9&type=section&id=Balance%20Sheet) As of June 30, 2025, total assets increased to $17,470 million, total liabilities rose to $16,418 million, and shareholders' equity significantly grew to $702 million Condensed Consolidated Balance Sheets Highlights ($ in Millions) | | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Total assets | $17,470 | $16,046 | $16,480 | | Total debt | $8,758 | $7,949 | $8,676 | | Total liabilities | $16,418 | $15,502 | $15,998 | | Total Colgate-Palmolive shareholders' equity | $702 | $212 | $123 | [Statement of Cash Flows](index=10&type=section&id=Statement%20of%20Cash%20Flows) Net cash provided by operations for the first six months of 2025 decreased to $1,484 million, with significant cash utilization in investing and financing activities Condensed Consolidated Statements of Cash Flows Highlights (For the Six Months Ended June 30, $ in Millions) | | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operations | $1,484 | $1,671 | | Capital expenditures | ($232) | ($243) | | **Free cash flow before dividends** | **$1,252** | **$1,428** | | Dividends paid | ($880) | ($867) | | Purchases of treasury shares | ($516) | ($989) | | Net cash used in financing activities | ($867) | ($1,206) | [Appendix](index=11&type=section&id=Appendix) This appendix provides detailed segment and geographic sales analysis, non-GAAP reconciliations, and important disclosures regarding the financial report [Segment and Geographic Sales Analysis](index=11&type=section&id=Segment%20and%20Geographic%20Sales%20Analysis) This section details Q2 2025 sales and operating profit by segment, showing flat Oral, Personal and Home Care sales, 3.8% growth in Pet Nutrition, and a 2.0% pricing contribution to total sales growth Net Sales by Segment (Q2, $ in Millions) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Total Oral, Personal and Home Care | $3,954 | $3,944 | | Pet Nutrition | $1,157 | $1,114 | | **Total Net Sales** | **$5,110** | **$5,058** | Operating Profit by Segment (Q2, $ in Millions) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Total Oral, Personal and Home Care | $997 | $1,058 | | Pet Nutrition | $264 | $235 | | Corporate | ($181) | ($201) | | **Total Operating Profit** | **$1,080** | **$1,092** | - For Q2 2025, the **1.0%** reported sales growth comprised a **2.0%** pricing increase, a **0.2%** organic volume decline, and a **1.0%** negative foreign exchange impact[41](index=41&type=chunk) [Non-GAAP Reconciliations](index=14&type=section&id=Non-GAAP%20Reconciliations) This section details adjustments reconciling GAAP to non-GAAP measures, showing Q2 2025 non-GAAP operating profit of $1,089 million and six-month non-GAAP net income of $1,493 million Q2 2025 Operating Profit Reconciliation ($ in Millions) | | Amount | | :--- | :--- | | Operating profit, GAAP | $1,080 | | Acquisition-related costs | $9 | | **Operating profit, non-GAAP** | **$1,089** | Q2 2025 Diluted EPS Reconciliation | | Amount | | :--- | :--- | | Diluted EPS, GAAP | $0.91 | | Acquisition-related costs | $0.01 | | **Diluted EPS, non-GAAP** | **$0.92** | [Important Disclosures](index=4&type=section&id=Important%20Disclosures) This section provides essential context, including cautionary statements on forward-looking information and definitions of key non-GAAP financial measures like organic sales growth - The press release contains forward-looking statements subject to risks and uncertainties detailed in SEC filings[17](index=17&type=chunk) - The company utilizes non-GAAP measures such as "Organic sales growth" to provide supplemental information on underlying sales trends, excluding foreign exchange and M&A impacts[18](index=18&type=chunk)[19](index=19&type=chunk)

Core Insights - Colgate-Palmolive Company (CL) is anticipated to report a decline in earnings for the second quarter of 2025, with revenues expected to reach $5.1 billion, reflecting a slight growth of 0.03% year-over-year [1] - The consensus estimate for earnings per share (EPS) is set at 89 cents, indicating a year-over-year decline of 2.2% [2] Financial Performance Expectations - The earnings surprise history shows that Colgate has beaten consensus estimates by an average of 4% over the last four quarters, with a 5.8% beat in the last reported quarter [2] - The current Earnings ESP stands at -0.11%, and the Zacks Rank is 3 (Hold), suggesting that an earnings beat is not likely this season [3] Business Drivers - The second-quarter performance is expected to benefit from strong business momentum, pricing strategies, and productivity initiatives, with a focus on balanced organic sales growth across all categories [4] - Gross margin has been on a sequential rise due to strong pricing and revenue growth management initiatives, which are expected to continue contributing to margin expansion [5] Challenges and Headwinds - Colgate's performance may face challenges from inflationary pressures, foreign currency fluctuations, and weak sales in key regions, particularly in Latin America and North America [6][7] - The company anticipates a sales decline of 0.3% for the second quarter, with specific declines projected in various regions: 1% in Latin America, 3% in North America, and 2.5% in Asia Pacific [8] Market Position and Valuation - Colgate's shares have decreased by 4.3% over the past three months, compared to a 2.5% decline in the industry [11] - The company trades at a forward 12-month P/E multiple of 22.71X, which is above the industry average of 19.97X and slightly below the S&P 500 average of 22.87X, indicating a relatively high valuation [12]

Core Viewpoint - Analysts forecast a quarterly earnings per share (EPS) of $0.89 for Colgate-Palmolive, indicating a year-over-year decline of 2.2%, with revenues expected to be $5.06 billion, showing no change from the previous year [1]. Earnings Projections - The consensus EPS estimate has been revised upward by 0.2% in the last 30 days, reflecting analysts' reassessment of their initial estimates [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue Estimates - The consensus estimate for 'Net Sales- Pet Nutrition' is $1.13 billion, reflecting a year-over-year increase of 1.1% [5]. - 'Net Sales- Total Oral, Personal and Home Care' is projected to reach $3.91 billion, indicating a decline of 0.9% from the prior year [5]. - 'Net Sales- Oral, Personal and Home Care- North America' is expected to be $1.01 billion, showing a growth of 1% year-over-year [5]. - 'Net Sales- Oral, Personal and Home Care- Latin America' is estimated at $1.24 billion, reflecting a decrease of 2.5% from the previous year [6]. - 'Net Sales- Oral, Personal and Home Care- Europe' is projected at $716.03 million, indicating a decline of 0.6% [7]. - 'Net Sales- Oral, Personal and Home Care- Asia Pacific' is expected to be $666.60 million, showing a decrease of 2.3% [7]. Operating Profit Estimates - 'Operating profit- Total Oral, Personal and Home Care' is expected to be $999.32 million, down from $1.06 billion in the same quarter last year [8]. - 'Operating profit- Pet Nutrition' is projected at $260.59 million, an increase from $235 million reported in the same quarter last year [8]. - 'Operating profit- Oral, Personal and Home Care- North America' is estimated at $200.45 million, compared to $223 million in the previous year [9]. - 'Operating profit- Oral, Personal and Home Care- Latin America' is expected to be $364.91 million, down from $417 million reported last year [9]. - 'Operating profit- Oral, Personal and Home Care- Africa/Eurasia' is projected at $61.54 million, compared to $64 million in the same quarter last year [10]. Stock Performance - Colgate-Palmolive shares have decreased by 4.9% over the past month, contrasting with a 3.6% increase in the Zacks S&P 500 composite [11].

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Colgate-Palmolive despite higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Colgate-Palmolive is expected to report quarterly earnings of $0.89 per share, reflecting a year-over-year decrease of 2.2%, while revenues are projected to be $5.06 billion, unchanged from the previous year [3]. - The consensus EPS estimate has been revised 0.22% higher in the last 30 days, indicating a slight positive adjustment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Colgate-Palmolive is lower than the consensus estimate, resulting in an Earnings ESP of -0.11%, suggesting bearish sentiment among analysts [12]. - The stock holds a Zacks Rank of 3, complicating predictions of an earnings beat [12]. Historical Performance - Colgate-Palmolive has consistently beaten consensus EPS estimates, achieving this in the last four quarters, including a surprise of +5.81% in the most recent quarter [13][14]. Industry Comparison - In the consumer products industry, Clorox is expected to report earnings of $2.25 per share, a year-over-year increase of 23.6%, with revenues projected at $1.94 billion, up 2% [18]. - Clorox's consensus EPS estimate has been revised 0.3% higher, but it has an Earnings ESP of -3.62% and a Zacks Rank of 4, indicating challenges in beating the consensus estimate [19][20].

Market Overview - The market capitalization of major US stocks shows varied performance, with Oracle at 762.30 billion, Mastercard at 321.36 billion, and Visa at 770.15 billion, reflecting increases of +0.66%, +0.86%, and +0.68% respectively [3] - Exxon Mobil's market cap is 679.53 billion, with a slight decrease of -0.98%, while Johnson & Johnson and Netflix show minor changes of -0.08% and -0.05% respectively [3] - Companies like Wells Fargo and Cisco have market caps of 270.15 billion and 279.59 billion, with respective increases of +0.98% and -0.58% [3] Notable Stock Movements - T-Mobile US Inc experienced a significant increase of +6.20%, reaching a market cap of 272.19 billion [3] - General Electric and Coca-Cola saw market caps of 285.05 billion and 298.76 billion, with increases of +0.37% and +0.91% respectively [3] - Companies like Disney and Goldman Sachs have market caps of 229.06 billion and 221.80 billion, with slight changes of +0.01% and -0.60% [3] Sector Performance - The technology sector shows mixed results, with Intel at 991.05 billion, down -3.28%, while AMD increased by +2.46% to 254.92 billion [5] - The consumer goods sector is represented by companies like Procter & Gamble and Coca-Cola, with market caps of 371.68 billion and 298.76 billion, showing slight increases [3][4] - The energy sector, represented by Exxon Mobil and Chevron, shows varied performance, with Exxon down -0.98% and Chevron up +0.66% [3] Summary of Key Companies - Oracle's market cap stands at 762.30 billion, reflecting a positive trend [3] - Mastercard and Visa show strong performance with market caps of 321.36 billion and 770.15 billion, both increasing [3] - Companies like Pfizer and Comcast have market caps of 1579.81 billion and 1332.00 billion, with Pfizer showing minimal change and Comcast down -3.16% [4][5]

Market Overview - The broader equity markets have shown a steady uptrend as investors remain optimistic despite tariff threats from President Trump on 14 countries, including Japan and South Korea [1] - Investors are hopeful for a mutually beneficial solution to avoid market turmoil as they look forward to a busy earnings season [1][2] Trade Relations - Positive discussions between U.S.-China diplomats regarding trade tariffs and potential peace talks between U.S. officials and Iran have contributed to market stability [2] - Investors are awaiting clarity on interest rate cuts with inflation data expected to be released soon [2] Investment Strategy - Investors are advised to focus on "cash cow" stocks that provide higher returns, emphasizing the importance of attractive efficiency ratios like return on equity (ROE) [3] - High ROE indicates effective reinvestment of cash at a high rate of return, distinguishing profitable companies from less efficient ones [4][5] Stock Screening Parameters - Stocks are screened based on criteria including cash flow greater than $1 billion and ROE exceeding industry averages [6] - Additional metrics include Price/Cash Flow lower than industry average and Return on Assets (ROA) greater than industry average [7] Featured Stocks - **Walt Disney**: Long-term earnings growth expectation of 11.8% with a trailing four-quarter earnings surprise of 16.4% on average, Zacks Rank 2 [8][9] - **TE Connectivity**: Long-term earnings growth expectation of 9.8% with a trailing four-quarter earnings surprise of 3.3% on average, Zacks Rank 2 [10][11] - **Fortinet**: Long-term earnings growth expectation of 13.4% with a trailing four-quarter earnings surprise of 23.8% on average, Zacks Rank 2 [12][13] - **Banco Bilbao**: Long-term earnings growth expectation of 5.5% with a trailing four-quarter earnings surprise of 6.3% on average, Zacks Rank 1 [13][14] - **Colgate-Palmolive**: Long-term earnings growth expectation of 5.2% with a trailing four-quarter earnings surprise of 4% on average, Zacks Rank 2 [14][15]

Company Overview - Colgate-Palmolive positions itself as a "caring, innovative growth company reimagining a healthier future for all people, their pets, and our planet" [1] - The company operates in two segments: oral care, personal care, and home care [1] Investment Philosophy - The focus is on identifying undervalued, promising stocks while balancing risk and reward [1] - Emphasis on limited risks with decent to high upside potential by understanding ownership [1] - Simplicity in investment ideas is highlighted as a key principle, with a contrarian approach being favored [1]

Core Viewpoint - The Federal Reserve is maintaining a cautious stance regarding interest rate cuts due to concerns over inflationary pressures from tariffs imposed by President Trump, leading to uncertainty in the market [1][5][6]. Federal Reserve Meeting Insights - The minutes from the latest Federal Reserve meeting indicate that most officials are not in a hurry to implement an immediate rate cut, suggesting a wait-and-see approach [2][5]. - A delay in rate cuts could lead to increased volatility in the stock market [2][7]. - Most participants believe that any inflationary impact from tariffs will be temporary or modest, and there is no urgency for rate cuts in the near term [6]. Investment Recommendations - Given the current uncertainty, it is advisable to invest in defensive stocks from the utility and consumer staples sectors, which are considered safe havens [3][11]. - Recommended stocks include: - **Atmos Energy Corporation (ATO)**: Expected earnings growth rate of 6%, Zacks Rank 2, beta of 0.70, and a dividend yield of 2.27% [9]. - **Fortis, Inc. (FTS)**: Expected earnings growth rate of 3.8%, Zacks Rank 2, beta of 0.48, and a dividend yield of 3.81% [13]. - **Colgate-Palmolive Company (CL)**: Expected earnings growth rate of 1.7%, Zacks Rank 2, beta of 0.37, and a dividend yield of 2.27% [15]. - **The Coca-Cola Company (KO)**: Expected earnings growth rate of 3.1%, Zacks Rank 2, beta of 0.45, and a dividend yield of 2.94% [17]. Stock Characteristics - The recommended stocks are characterized by low beta (greater than 0 but less than 1), high dividend yields, and favorable Zacks Ranks, making them attractive in the current market environment [4][11].

Core Insights - Colgate-Palmolive Company (CL) is effectively utilizing its pricing power to drive growth and alleviate external cost pressures through a multifaceted pricing strategy [1][10] Pricing Strategy - The company employs competitive pricing, value-based strategies, and price segmentation to cater to diverse consumer needs while optimizing value [1][2] - Colgate's pricing actions, combined with its funding-the-growth program and productivity initiatives, are enhancing efficiency and expanding margins [2] Financial Performance - In Q1 2025, Colgate's adjusted gross margin increased by 80 basis points (bps) and operating margin expanded by 120 bps year over year, resulting in a 6% growth in adjusted earnings per share (EPS) [3] - The company anticipates pricing gains of 2.5% for 2025, with an expected flat gross margin and low single-digit EPS growth [3][4][10] Competitive Landscape - Major competitors in pricing power include Procter & Gamble (PG), Clorox (CLX), and Church & Dwight (CHD) [5] - Procter & Gamble's pricing strategy focuses on value-based pricing to maintain market share and reduce reliance on promotional discounts [6] - Clorox has achieved a 240 bps expansion in gross margin year over year, driven by strategic pricing and cost-saving measures [7] - Church & Dwight is enhancing its market position through strategic pricing and innovation, gaining market share in nine of its 14 major brands [8] Valuation and Estimates - Colgate's shares have increased by 0.7% year to date, contrasting with a 3.2% decline in the industry [9] - The company trades at a forward price-to-earnings ratio of 24.17X, higher than the industry average of 20.19X [11] - The Zacks Consensus Estimate predicts year-over-year EPS growth of 1.7% for 2025 and 7.3% for 2026, with stable EPS estimates over the past 30 days [12]