Core Insights - Colgate-Palmolive Company reported better-than-expected second-quarter earnings, with adjusted earnings per share of 92 cents, surpassing the analyst consensus estimate of 89 cents [1] - Quarterly sales reached $5.11 billion, reflecting a 1% year-over-year increase, exceeding the expected $5.03 billion [1] Sales and Growth Projections - The company anticipates net sales to increase in the low single digits, accounting for a flat to low-single-digit negative impact from foreign exchange [2] - Organic sales growth is projected to be at the low end of the 2% to 4% range, influenced by the planned exit from private label pet sales by 2025 [2] Profitability and Margins - On a non-GAAP (Base Business) basis, gross profit margin and advertising are expected to remain roughly flat as a percentage of net sales, with earnings per share anticipated to grow in the low single digits [3] Management Commentary - Noel Wallace, Chairman and CEO, expressed satisfaction with the company's performance, highlighting growth in net sales, organic sales, and earnings per share despite challenging market conditions [4] Stock Performance and Analyst Ratings - Following the earnings announcement, Colgate-Palmolive shares fell 0.3% to $83.27 [4] - Analysts adjusted their price targets, with Wells Fargo lowering it from $88 to $83, Morgan Stanley from $104 to $96, and JP Morgan from $99 to $95, while maintaining their respective ratings [10]

Core Insights - Colgate-Palmolive Company (CL) reported strong second-quarter 2025 results, with both revenue and earnings exceeding expectations and showing year-over-year improvement [1][2][8] - The company is focusing on enhancing its capabilities in digital, data, and analytics to strengthen competitive advantages and profitability [1] Financial Performance - On a non-GAAP basis, earnings per share (EPS) were $0.92, a 1% increase from the previous year, surpassing the Zacks Consensus Estimate of $0.89 [2][8] - Net sales reached $5.11 billion, a 1% increase from the prior year, exceeding the Zacks Consensus Estimate of $5.05 billion [2][8] - Organic sales grew by 1.8%, despite a 0.6% negative impact from reduced private-label pet volume and a 1% adverse effect from foreign exchange [2][8] Segment Analysis - North America's net sales, accounting for 20% of total sales, decreased by 1% year over year, attributed to a 0.5% drop in pricing and a 0.4% decline in volume [10] - Latin America's net sales, representing 24% of total sales, fell by 4.8% year over year, with an 8.2% negative currency impact overshadowing a 3% pricing gain [10] - Europe's net sales increased by 7.8% year over year, driven by a 2.2% rise in pricing and a 5.7% positive currency effect [11] - The Asia Pacific segment's net sales rose by 0.8% year over year, with a 1.6% drop in volume offset by a 1.6% increase in pricing [11] - Africa/Eurasia's net sales improved by 8% year over year, supported by a 4.3% growth in volume and a 3.4% increase in pricing [12] - Hill's Pet Nutrition's net sales increased by 3.8% year over year, benefiting from a 2.9% rise in pricing [12] Profitability Metrics - The base business gross profit was $3.07 billion, a slight decrease of 0.2% from the previous year, with a gross profit margin of 60.1%, down 70 basis points [6][9] - Adjusted operating profit was $1.09 billion, a decline of 3% year over year, with an adjusted operating profit margin of 21.3%, down 80 basis points [9] Cash Flow and Shareholder Returns - Colgate ended the second quarter with cash and cash equivalents of $1.22 billion and total debt of $8.8 billion [13] - The company generated $1.5 billion in net cash from operating activities for the first half of 2025 and returned $880 million to shareholders through dividends [13] Future Outlook - Colgate anticipates continued uncertainty and volatility in global markets, projecting organic sales growth at the lower end of the previous 2-4% guidance range [14][16] - The company expects net sales to grow in low single digits, with a flat to low-single-digit adverse impact from foreign exchange [15]

Employment Situation Report - Nonfarm payrolls increased by +73K in July, significantly below the expected +100K [1] - The unemployment rate rose by 10 basis points to 4.2%, still considered historically low [1] - Major downward revisions were made to previous months, with June revised from +147K to +14K and May from +144K to +19K, indicating a weaker labor market [2] Wage and Labor Participation - Hourly wages increased by +0.3% month-over-month, with a year-over-year increase of +3.9% [3] - Labor force participation fell to 62.2%, indicating a less robust labor market [3] - The U-6 unemployment rate, which includes underemployment, decreased slightly to 7.9% [3] Sector Performance - The healthcare sector added +55K jobs, making it the strongest industry for job growth [5] - Manufacturing experienced a decline for the third consecutive month, losing -37K jobs [5] - The federal government reduced its workforce by -12K jobs, totaling -84K job losses since the current administration took office [5] Market Reactions and Federal Reserve Implications - Following the jobs report, the probability of a Federal Reserve interest rate cut increased from +34% to +87% [7] - Bond yields fell significantly, with the 10-year bond yield dropping to +4.27% [8] - Major stock indexes declined in pre-market trading, with the Dow down -330 points, S&P 500 down -53, and Nasdaq down -220 [8] Earnings Reports - ExxonMobil reported earnings of $1.64 per share, exceeding expectations by +10%, but revenues fell -1.59% short [9] - Colgate-Palmolive beat earnings expectations by 3 cents, reporting 92 cents per share, and also exceeded revenue estimates by +1.17% [10] - Regeneron had a notable earnings beat of +60.5%, reporting $12.89 per share [10]

Financial Data and Key Metrics Changes - In Q2 2025, the company achieved growth in net sales, organic sales, and earnings per share despite facing significant raw material pressure and negative foreign exchange impacts [6][10] - Organic sales growth accelerated by 60 basis points to 2.4% in Q2, driven by improvements in North America and Africa-Eurasia [7][10] - Gross margin was down year-over-year due to higher raw material inflation and tariffs, with guidance for gross margin remaining roughly flat for 2025 [44][46] Business Line Data and Key Metrics Changes - The North America business showed improvement in volume, with good plans in place for the second half of the year [21][22] - The Hill's pet food segment delivered mid-single-digit organic growth, with a strong performance in therapeutic products [50][52] - The total relaunch of core products was strong in Latin America, with good incremental share and growth [27][30] Market Data and Key Metrics Changes - The company noted a cautious consumer environment in North America, with expectations for categories to normalize over time [20][21] - In Latin America, there was a slight deceleration in categories in Brazil, while Mexico showed some improvement [29][30] - The Asia market experienced softness, particularly in urban markets in India and challenges in the Holly and Hazel business in China [85][88] Company Strategy and Development Direction - The company remains committed to its long-term growth strategy, focusing on household penetration and brand health as key drivers of organic sales growth [11][12] - A productivity initiative was announced, aiming for $200 to $300 million in charges over three years to optimize supply chain and enhance capabilities [18][95] - The company is prioritizing innovation and digital transformation as part of its 2030 strategic plan [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the second half of 2025, expecting modest improvements in category growth and consumer behavior [93][94] - The company is focused on balancing top-line growth with margin restoration, particularly in North America [106][108] - Management acknowledged the challenges posed by inflation and raw material costs but remains confident in the strategies in place to drive growth [60][61] Other Important Information - The company closed the acquisition of Prime one hundred, a leading fresh pet food brand in Australia [7] - The company is leveraging AI and data analytics to optimize its portfolio and promotional spending [10][12] Q&A Session Summary Question: Details on the restructuring program and its timing - Management indicated that the restructuring program is designed to accelerate growth initiatives and is a natural evolution towards the 2030 strategy [15][16] Question: Insights on U.S. category growth and consumer behavior - Management noted a cautious consumer in North America, with expectations for categories to normalize over time despite recent setbacks [20][21] Question: Update on Latin America performance and potential pivots - Management reported strong initial results from the total relaunch in Latin America but acknowledged some cautiousness in Brazil [29][30] Question: Gross margin outlook and raw material cost drivers - Management highlighted that gross margin was impacted by raw material inflation, particularly in palm oil and fats, but expects some easing in the back half of the year [46][47] Question: Performance of Hill's pet food segment - Management reported strong growth in the Hill's segment, particularly in therapeutic products, despite challenges from private label competition [50][52] Question: Confidence in EPS guidance amidst market uncertainties - Management expressed confidence in low single-digit EPS growth expectations, citing effective strategies and investments planned for the second half of the year [58][60] Question: Evolution of the Asia market and specific challenges - Management noted softness in urban markets in India and challenges in the Holly and Hazel business in China, but remains optimistic about future improvements [85][88]

Financial Data and Key Metrics Changes - In Q2 2025, the company achieved growth in net sales, organic sales, and earnings per share despite facing significant raw material pressure and negative foreign exchange [5][6] - Organic sales growth accelerated by 60 basis points to 2.4% in Q2, driven by improvements in North America and AfricaEurasia [5][6] - Gross margin was down year over year due to greater than anticipated raw material inflation and tariffs, with guidance for gross margin remaining roughly flat for 2025 [41][42] Business Line Data and Key Metrics Changes - The company launched significant innovations across categories and closed the acquisition of Prime one hundred, a leading fresh pet food brand in Australia [5][6] - Hill's brand saw mid-single-digit organic growth across almost every hub, with a balanced contribution from volume and price [48][49] - The total relaunch of core brands was strong in Latin America, with good incremental share and growth [26][29] Market Data and Key Metrics Changes - North America showed improvement in volume, although the overall consumer sentiment remains cautious [20][21] - Latin America experienced a slight deceleration in categories, particularly in Brazil, while Mexico showed some improvement [28][29] - The Asia market faced softness, particularly in urban markets in India and challenges in the Holly and Hazel business in China [81][84] Company Strategy and Development Direction - The company remains committed to its long-term growth strategy, focusing on household penetration and brand health as key drivers of organic sales growth [9][10] - A productivity initiative was announced, aiming for $200 to $300 million in charges over three years, focusing on optimizing the supply chain and enhancing innovation capabilities [18][92] - The company is prioritizing innovation, particularly in premium products, and leveraging AI for revenue growth management [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the second half of 2025, expecting modest improvements in category growth and maintaining a strong innovation pipeline [90][91] - The company acknowledged the challenges posed by high raw material costs and tariffs but remains focused on driving value through innovation and pricing strategies [41][62] - Management highlighted the importance of balancing top-line growth with margin restoration, particularly in North America [106] Other Important Information - The company is actively leveraging price pack architecture to appeal to consumers seeking value, with a focus on both premium and entry-level products [7][100] - The company has stopped producing private label products as of July, which will impact the P&L in the second half of the year [52][78] Q&A Session Summary Question: Details on the restructuring program and U.S. category growth - Management discussed the productivity initiatives aimed at accelerating growth and optimizing resources, while acknowledging a cautious consumer environment in North America [14][20] Question: Assessment of the total relaunch and Latin America performance - The total relaunch has been strong in Latin America, with good growth and share gains, although some caution remains in Brazil [26][28] Question: Gross margin outlook and raw material cost drivers - Gross margin was impacted by raw material inflation, particularly in palm oil and fats, with guidance remaining flat for 2025 [41][42] Question: Performance of Hill's brand and private label impact - Hill's brand showed strong growth, particularly in therapeutic products, while the exit from private label production will affect future comparisons [49][78] Question: Sales run rate expectations and restructuring details - Management expects a modest improvement in sales run rate in the second half, driven by advertising and innovation, with restructuring focusing on optimizing resources [90][92] Question: Innovation strategy within the 2030 plan - The company plans to enhance innovation capabilities, focusing on breakthrough products and improving agility in bringing new products to market [65][68] Question: Category trends and market outlook - Management anticipates a modest improvement in category growth across markets, with some categories expected to recover more slowly than others [110]

Core Insights - Colgate-Palmolive reported quarterly earnings of $0.92 per share, exceeding the Zacks Consensus Estimate of $0.89 per share, and showing a slight increase from $0.91 per share a year ago, resulting in an earnings surprise of +3.37% [1] - The company achieved revenues of $5.11 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.17% and showing a year-over-year increase from $5.06 billion [2] - Colgate-Palmolive has consistently surpassed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.91, with projected revenues of $5.18 billion, while the estimate for the current fiscal year is $3.67 on revenues of $20.32 billion [7] - The company's earnings outlook is crucial for investors, as it reflects current consensus expectations and any recent changes in those expectations [4] Stock Performance - Colgate-Palmolive shares have underperformed the market, losing about 7.8% since the beginning of the year, while the S&P 500 has gained 7.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6] Industry Context - The Consumer Products - Staples industry, to which Colgate-Palmolive belongs, is currently ranked in the top 40% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements for Colgate-Palmolive Company, including income, balance sheet, and cash flow statements [Condensed Consolidated Statements of Income](index=2&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Details net sales and income for Q2 and H1 2025, showing slight sales growth in Q2 and income growth across both periods Condensed Consolidated Statements of Income (Unaudited) | (In Millions Except Per Share) | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :---: | :---: | :---: | :---: | | | **2025** | **2024** | **2025** | **2024** | | **Net sales** | **$5,110** | **$5,058** | **$10,021** | **$10,124** | | Cost of sales | 2,041 | 1,992 | 3,965 | 4,019 | | **Gross profit** | **3,069** | **3,066** | **6,056** | **6,105** | | Selling, general and administrative expenses | 1,963 | 1,939 | 3,861 | 3,855 | | Operating profit | 1,080 | 1,092 | 2,156 | 2,139 | | Income before income taxes | 1,007 | 1,010 | 1,959 | 1,977 | | **Net income attributable to Colgate-Palmolive Company** | **$743** | **$731** | **$1,433** | **$1,414** | | **Earnings per common share, basic** | **$0.92** | **$0.89** | **$1.77** | **$1.72** | | **Earnings per common share, diluted** | **$0.91** | **$0.89** | **$1.76** | **$1.71** | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position as of June 30, 2025, showing increases in total assets, liabilities, and equity Condensed Consolidated Balance Sheets (Unaudited) | (In Millions) | June 30, 2025 | December 31, 2024 | | :--- | :---: | :---: | | **Total current assets** | $5,996 | $5,317 | | Property, plant and equipment, net | 4,529 | 4,422 | | Goodwill | 3,696 | 3,272 | | **Total assets** | **$17,470** | **$16,046** | | **Total current liabilities** | $6,775 | $5,759 | | Long-term debt | 7,144 | 7,289 | | **Total liabilities** | **$16,418** | **$15,502** | | **Total equity** | **$1,052** | **$544** | | **Total liabilities and equity** | **$17,470** | **$16,046** | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash flows for H1 2025, noting decreased operating cash, increased investing cash use, and reduced financing cash use Condensed Consolidated Statements of Cash Flows (Unaudited) | (In Millions) | Six Months Ended June 30, | | :--- | :---: | :---: | | | **2025** | **2024** | | **Net cash provided by (used in) operations** | **$1,484** | **$1,671** | | **Net cash provided by (used in) investing activities** | **($560)** | **($304)** | | **Net cash provided by (used in) financing activities** | **($867)** | **($1,206)** | | Effect of exchange rate changes on Cash and cash equivalents | $62 | ($17) | | **Net increase (decrease) in Cash and cash equivalents** | **$119** | **$144** | | Cash and cash equivalents at beginning of the period | $1,096 | $966 | | **Cash and cash equivalents at end of the period** | **$1,215** | **$1,110** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed information on accounting policies, acquisitions, restructuring, legal contingencies, and tax matters, including the Prime100 acquisition - On April 30, 2025, the Company acquired Care TopCo Pty Ltd, owner of the Prime100 pet food business, for approximately **$301 million in cash**. This acquisition provides an entry into the fresh pet food category in Australia for the Hill's Pet Nutrition segment[40](index=40&type=chunk) - On July 31, 2025, the Board approved a new three-year Productivity Program expected to incur pre-tax charges of **$200 to $300 million**. The program aims to align organizational structure, optimize the supply chain, and reduce overhead costs[44](index=44&type=chunk) - The company is involved in several legal contingencies, including Brazilian tax matters (approx. **$108 million** and **$26 million** at issue), Talcum powder litigation (**384 cases** pending), and an ERISA matter which has been settled in principle[62](index=62&type=chunk)[66](index=66&type=chunk)[68](index=68&type=chunk)[74](index=74&type=chunk) - The effective income tax rate for Q2 2025 was **23.2%**, down from **24.1%** in Q2 2024. The company is evaluating the impact of the new "One Big Beautiful Bill Act" (OBBBA) tax legislation[101](index=101&type=chunk)[102](index=102&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and H1 2025 performance, covering sales, profitability, and cash flow across product segments and geographies [Executive Overview and Outlook](index=31&type=section&id=Executive%20Overview%20and%20Outlook) Outlines the company's two product segments, anticipates continued macroeconomic challenges, and details strategies including a new Productivity Program - The company operates in two product segments: Oral, Personal and Home Care; and Pet Nutrition. Approximately **45% of Net Sales** come from emerging markets[109](index=109&type=chunk)[110](index=110&type=chunk) - A new three-year "Productivity Program" was approved on July 31, 2025, with projected pre-tax charges of **$200 to $300 million** to drive future growth and support the 2030 strategy[120](index=120&type=chunk) - The company expects continued challenges from inflation, high interest rates, and foreign currency volatility. Tariffs are estimated to add approximately **$75 million** in incremental gross costs in 2025[124](index=124&type=chunk)[125](index=125&type=chunk) [Results of Operations - Three Months Ended June 30, 2025](index=37&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030%2C%202025) Analyzes Q2 2025 performance, highlighting 1.0% net sales growth, a 70 basis point decrease in non-GAAP gross profit margin, and a 1% increase in non-GAAP diluted EPS Q2 2025 Net Sales Growth vs. Q2 2024 | Segment | Net Sales Growth (GAAP) | Organic Sales Growth (Non-GAAP) | | :--- | :---: | :---: | | Total Oral, Personal and Home Care | 0.2% | 1.7% | | Pet Nutrition | 3.8% | 2.0% | | **Total Company** | **1.0%** | **1.8%** | Q2 2025 vs. Q2 2024 Profitability (Non-GAAP) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :---: | :---: | :---: | | Gross Profit Margin | 60.1% | 60.8% | (70) bps | | Operating Profit | $1,089M | $1,118M | (3)% | | Operating Profit Margin | 21.3% | 22.1% | (80) bps | | Diluted EPS | $0.92 | $0.91 | +1% | - The decrease in non-GAAP Gross Profit Margin was primarily driven by significantly higher raw and packaging material costs (**420 bps**), partially offset by cost savings (**250 bps**) and higher pricing (**80 bps**)[141](index=141&type=chunk) [Results of Operations - Six Months Ended June 30, 2025](index=47&type=section&id=Results%20of%20Operations%20-%20Six%20Months%20Ended%20June%2030%2C%202025) Reviews H1 2025 performance, noting a 1.0% decrease in net sales, flat non-GAAP gross profit margin, and a 3% increase in non-GAAP diluted EPS YTD 2025 Net Sales Growth vs. YTD 2024 | Segment | Net Sales Growth (GAAP) | Organic Sales Growth (Non-GAAP) | | :--- | :---: | :---: | | Total Oral, Personal and Home Care | (2.0)% | 1.3% | | Pet Nutrition | 2.6% | 2.5% | | **Total Company** | **(1.0)%** | **1.6%** | YTD 2025 vs. YTD 2024 Profitability (Non-GAAP) | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :---: | :---: | :---: | | Gross Profit Margin | 60.4% | 60.4% | 0 bps | | Operating Profit | $2,181M | $2,202M | (1)% | | Operating Profit Margin | 21.8% | 21.8% | 0 bps | | Diluted EPS | $1.83 | $1.78 | +3% | - Non-GAAP Gross Profit Margin was flat year-over-year, as significantly higher raw and packaging material costs (**340 bps**) were offset by cost savings (**230 bps**), higher pricing (**70 bps**), and favorable mix (**30 bps**)[186](index=186&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) Examines liquidity and capital, noting an 11% decrease in operating cash flow, increased total debt, and a higher quarterly dividend - Net cash provided by operations decreased **11%** to **$1,484 million** in the first six months of 2025, compared to **$1,671 million** in the same period of 2024[225](index=225&type=chunk) - In April 2025, the Company issued **$500 million** of five-year Senior Notes at a fixed coupon rate of **4.20%**[230](index=230&type=chunk) - The quarterly common stock dividend was increased to **$0.52 per share** from **$0.50 per share**, effective in the second quarter of 2025[233](index=233&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Reports no material changes in market risk disclosures concerning foreign currency, interest rate, commodity price, and credit exposures - There have been no material changes in market risk disclosures since the last Annual Report on Form 10-K[241](index=241&type=chunk) [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with IT system upgrades not materially impacting internal controls - The CEO and CFO concluded that the Company's disclosure controls and procedures are effective as of June 30, 2025[243](index=243&type=chunk) - The company is upgrading its enterprise IT system and transitioning to the cloud, but this is not expected to materially affect internal control over financial reporting[244](index=244&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 10 of the Condensed Consolidated Financial Statements for detailed information on legal matters - For information on legal proceedings, the report refers to Note 10, Contingencies to the Condensed Consolidated Financial Statements[248](index=248&type=chunk) [Item 1A. Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) States no material changes to risk factors previously disclosed in the 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K[249](index=249&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the new $5 billion share repurchase program authorized in March 2025 and Q2 2025 repurchase activity - A new **$5 billion** share repurchase program (the "2025 Program") was authorized on March 20, 2025[251](index=251&type=chunk) Share Repurchase Activity for Q2 2025 | Month | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining (in millions) | | :--- | :---: | :---: | :---: | | April 2025 | 621,081 | $92.49 | $4,917 | | May 2025 | 722,695 | $90.45 | $4,852 | | June 2025 | 1,216,973 | $89.83 | $4,744 | | **Total Q2** | **2,560,749** | **$90.65** | **$4,744** | [Item 5. Other Information](index=66&type=section&id=Item%205.%20Other%20Information) Reports the Chief Legal Officer's Rule 10b5-1 trading plan for up to 6,000 shares, with no other similar arrangements by directors or officers - The Chief Legal Officer and Secretary, Jennifer M. Daniels, entered into a Rule 10b5-1 trading plan on May 1, 2025, for the sale of up to **6,000 shares**[256](index=256&type=chunk)

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]