COLGATE-PALMOLIVE COMPANY 4Q & FULL YEAR 2024 EARNINGS PRESENTATION TIGHTLY FOCUSED ON FOUR ATTRACTIVE CORE CATEGORIES ORAL CARE PET NUTRITION JANUARY 31, 2025 January 2025 Notice for Investor Presentation Please review the following fourth quarter and full year 2024 earnings presentation in conjunction with our fourth quarter and full year 2024 earnings press release, our fourth quarter and full year 2024 prepared management remarks and additional information regarding our non-GAAP financial measures, incl ...

[Overall Financial Performance](index=1&type=section&id=Colgate%20Announces%204th%20Quarter%20and%20Full%20Year%202024%20Results) [Full Year 2024 Performance](index=1&type=section&id=Full%20Year) Full year 2024 saw record net sales of **$20.1 billion**, **7.4% organic growth**, and strong profitability and cash generation Full Year Total Company Results (Millions USD) | Full Year Total Company Results | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | **GAAP** | | | | | Net Sales (Millions USD) | $20,101 | $19,457 | +3.3% | | Diluted EPS (USD) | $3.51 | $2.77 | +27% | | **Base Business (Non-GAAP)** | | | | | Organic Sales Growth | | | +7.4% | | Base Business Diluted EPS (USD) | $3.60 | $3.23 | +11% | - Achieved a milestone by delivering over **$20 billion** in Net sales for the first time[5](index=5&type=chunk) - Net cash provided by operations for the full year was **$4.11 billion**, a **10% increase** compared to 2023[5](index=5&type=chunk) - The company returned **$3.4 billion** in cash to shareholders through dividends and share repurchases[5](index=5&type=chunk) [Fourth Quarter 2024 Performance](index=1&type=section&id=Fourth%20Quarter) Q4 2024 saw nearly flat net sales at **$4.94 billion**, offset by **4.3% organic growth**, improved EPS, and **70 basis point** gross margin expansion Fourth Quarter Total Company Results (Millions USD) | Fourth Quarter Total Company Results | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | **GAAP** | | | | | Net Sales (Millions USD) | $4,944 | $4,950 | -0.1% | | Diluted EPS (USD) | $0.90 | $0.87 | +3% | | **Base Business (Non-GAAP)** | | | | | Organic Sales Growth | | | +4.3% | | Base Business Diluted EPS (USD) | $0.91 | $0.87 | +5% | - GAAP Gross profit margin and Base Business Gross profit margin both increased by **70 basis points** to **60.3%**[6](index=6&type=chunk) - Colgate maintained global market leadership in toothpaste with a **41.4%** year-to-date share and manual toothbrushes with a **32.2%** year-to-date share[6](index=6&type=chunk)[7](index=7&type=chunk) [Management Commentary and Outlook](index=2&type=section&id=Management%20Commentary%20and%20Outlook) [Executive Summary](index=2&type=section&id=Executive%20Summary) The CEO highlighted consistent organic sales growth, increased advertising investment due to strong margins, and ongoing strategic investments in digital and data analytics - This marks the **sixth consecutive year** with organic sales growth at or above the **3% to 5%** targeted range[9](index=9&type=chunk) - Strong margin performance enabled a **15% increase** in advertising spending in 2024, following a **19% increase** in 2023[10](index=10&type=chunk) - The company is building income statement flexibility to continue investing in scaling digital and data analytics capabilities[10](index=10&type=chunk) - The CEO expressed confidence in delivering consistent, compounded earnings per share growth in 2025 and beyond[11](index=11&type=chunk) [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%20Guidance) Colgate anticipates roughly flat net sales in 2025 due to foreign exchange, with **3% to 5% organic sales growth**, gross margin expansion, and low to mid-single-digit EPS growth - Net sales are expected to be roughly flat, including a **mid-single-digit negative impact** from foreign exchange[12](index=12&type=chunk) - Organic sales growth is expected to be within the long-term targeted range of **3% to 5%**[12](index=12&type=chunk) - On a non-GAAP (Base Business) basis, the company expects gross profit margin expansion and **low to mid-single-digit earnings-per-share growth**[12](index=12&type=chunk) [Divisional Performance (Q4 2024)](index=4&type=section&id=Divisional%20Performance) [Sales by Division](index=4&type=section&id=Fourth%20Quarter%20Sales%20Growth%20By%20Division) Q4 2024 organic sales grew **4.3%** across divisions, led by Africa/Eurasia and Latin America, despite significant foreign exchange headwinds impacting net sales Fourth Quarter Sales Growth By Division (%) | % change 4Q 2024 vs. 4Q 2023 | Net Sales (%) | Organic Sales* (%) | Volume (%) | Pricing (%) | FX (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | North America | -1.0% | -0.7% | +1.9% | -2.7% | -0.3% | | Latin America | -7.2% | +9.2% | +0.9% | +8.3% | -16.4% | | Europe | +4.9% | +4.5% | +1.7% | +2.7% | +0.4% | | Asia Pacific | +3.7% | +3.8% | +5.8% | -2.0% | —% | | Africa/Eurasia | +2.8% | +9.4% | +11.5% | -2.1% | -6.6% | | Hill's | +2.3% | +2.9% | +0.8% | +2.0% | -0.5% | | **Total Company** | **-0.1%** | **+4.3%** | **+2.5%** | **+1.8%** | **-4.4%** | [Operating Profit by Division](index=4&type=section&id=Fourth%20Quarter%20Operating%20Profit%20By%20Division) Q4 2024 total operating profit decreased **1%**, with Hill's Pet Nutrition driving **19%** profit growth and **340 basis point** margin expansion, while North America declined Fourth Quarter Operating Profit By Division (Millions USD) | (Millions USD) | 4Q 2024 | % Change vs 4Q 2023 (%) | % to Net Sales (%) | Change in basis points vs 4Q 2023 (basis points) | | :--- | :--- | :--- | :--- | :--- | | North America | $206 | -11% | 19.9% | -220 | | Latin America | $339 | -8% | 30.6% | -10 | | Europe | $155 | 3% | 23.3% | -40 | | Asia Pacific | $211 | 4% | 29.1% | +10 | | Africa/Eurasia | $58 | -1% | 21.5% | -80 | | Hill's | $275 | 19% | 24.1% | +340 | | **Total Company, As Reported** | **$1,064** | **-1%** | **21.5%** | **-20** | [Detailed Financial Statements](index=8&type=section&id=Detailed%20Financial%20Statements) [Consolidated Statements of Income](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Full year 2024 saw net sales grow to **$20.1 billion** and net income to **$2.9 billion**, while Q4 net sales were flat at **$4.9 billion** with increased advertising spend Consolidated Statements of Income - Full Year (Millions USD) | For the Twelve Months Ended Dec 31, (Millions USD) | 2024 | 2023 | | :--- | :--- | :--- | | Net Sales (Millions USD) | $20,101 | $19,457 | | Gross Profit (Millions USD) | $12,161 | $11,326 | | Operating Profit (Millions USD) | $4,268 | $3,984 | | Net Income Attributable to Colgate-Palmolive (Millions USD) | $2,889 | $2,300 | | Diluted EPS (USD) | $3.51 | $2.77 | Consolidated Statements of Income - Fourth Quarter (Millions USD) | For the Three Months Ended Dec 31, (Millions USD) | 2024 | 2023 | | :--- | :--- | :--- | | Net Sales (Millions USD) | $4,944 | $4,950 | | Gross Profit (Millions USD) | $2,982 | $2,950 | | Operating Profit (Millions USD) | $1,064 | $1,072 | | Net Income Attributable to Colgate-Palmolive (Millions USD) | $739 | $718 | | Diluted EPS (USD) | $0.90 | $0.87 | [Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of December 31, 2024, total assets decreased to **$16.05 billion**, total debt was reduced to **$7.95 billion**, and shareholders' equity declined to **$212 million** Consolidated Balance Sheets (Millions USD) | As of December 31, (Millions USD) | 2024 | 2023 | | :--- | :--- | :--- | | Total assets | $16,046 | $16,393 | | Total debt | $7,949 | $8,549 | | Total liabilities | $15,502 | $15,436 | | Total Colgate-Palmolive Company shareholders' equity | $212 | $609 | [Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased to **$4.11 billion** in 2024, driving free cash flow to **$3.55 billion**, with significant cash returned to shareholders Consolidated Statements of Cash Flows (Millions USD) | For the Twelve Months Ended Dec 31, (Millions USD) | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operations | $4,107 | $3,745 | | Capital expenditures | ($561) | ($705) | | **Free cash flow before dividends** | **$3,546** | **$3,040** | | Dividends paid | ($1,789) | ($1,749) | | Purchases of treasury shares | ($1,739) | ($1,128) | | Net increase (decrease) in Cash and cash equivalents | $130 | $191 | [Segment and Geographic Analysis](index=12&type=section&id=Segment%20and%20Geographic%20Analysis) [Segment Information (Net Sales & Operating Profit)](index=12&type=section&id=Segment%20Information) Oral, Personal and Home Care remained the largest segment, while Hill's Pet Nutrition significantly grew sales to **$4.5 billion** and operating profit to **$965 million** in 2024 Full Year Net Sales by Segment (Millions USD) | Full Year Net Sales (Millions USD) | 2024 | 2023 | | :--- | :--- | :--- | | Total Oral, Personal and Home Care | $15,618 | $15,167 | | Pet Nutrition | $4,483 | $4,290 | | **Total Net Sales** | **$20,101** | **$19,457** | Full Year Operating Profit by Segment (Millions USD) | Full Year Operating Profit (Millions USD) | 2024 | 2023 | | :--- | :--- | :--- | | Total Oral, Personal and Home Care | $4,088 | $3,882 | | Pet Nutrition | $965 | $806 | | Corporate | ($784) | ($704) | | **Total Operating Profit** | **$4,268** | **$3,984** | [Geographic Sales Analysis](index=13&type=section&id=Geographic%20Sales%20Analysis%20Percentage%20Changes) Full year 2024 organic sales grew **7.4%**, led by Emerging Markets, despite significant foreign exchange headwinds moderating reported net sales growth to **3.3%** Full Year Geographic Sales Analysis (%) | Full Year 2024 vs 2023 | Sales Change As Reported (%) | Organic Sales Change (%) | Volume (%) | Pricing (%) | Foreign Exchange (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Company** | **3.3%** | **7.4%** | **3.1%** | **4.4%** | **(4.1)%** | | Emerging Markets | 3.0% | 12.2% | 4.0% | 8.2% | (9.2)% | | Developed Markets | 3.5% | 3.6% | 2.3% | 1.3% | —% | Fourth Quarter Geographic Sales Analysis (%) | Q4 2024 vs 2023 | Sales Change As Reported (%) | Organic Sales Change (%) | Volume (%) | Pricing (%) | Foreign Exchange (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Company** | **(0.1)%** | **4.3%** | **2.5%** | **1.8%** | **(4.4)%** | | Emerging Markets | (2.2)% | 7.5% | 3.7% | 3.8% | (9.7)% | | Developed Markets | 1.6% | 1.7% | 1.5% | 0.3% | (0.2)% | [Non-GAAP Reconciliations](index=15&type=section&id=Non-GAAP%20Reconciliations) [Q4 2024 Non-GAAP Reconciliation](index=15&type=section&id=Non-GAAP%20Reconciliations%20For%20the%20Three%20Months%20Ended%20December%2031) Q4 2024 GAAP operating profit of **$1,064 million** and diluted EPS of **$0.90** were adjusted to higher non-GAAP figures after accounting for specific charges Fourth Quarter 2024 Non-GAAP Reconciliation (Millions USD) | Q4 2024 (Millions USD) | As Reported (GAAP) | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Operating Profit (Millions USD) | $1,064 | $7 | $1,071 | | Net Income Attributable to Colgate (Millions USD) | $739 | $6 | $745 | | Diluted Earnings Per Share (USD) | $0.90 | $0.01 | $0.91 | [Full Year 2024 Non-GAAP Reconciliation](index=17&type=section&id=Non-GAAP%20Reconciliations%20For%20the%20Twelve%20Months%20Ended%20December%2031) Full year 2024 GAAP operating profit of **$4,268 million** and diluted EPS of **$3.51** were adjusted to higher non-GAAP figures after accounting for specific charges Full Year 2024 Non-GAAP Reconciliation (Millions USD) | Full Year 2024 (Millions USD) | As Reported (GAAP) | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Operating Profit (Millions USD) | $4,268 | $85 | $4,353 | | Net Income Attributable to Colgate (Millions USD) | $2,889 | $73 | $2,962 | | Diluted Earnings Per Share (USD) | $3.51 | $0.09 | $3.60 | [Supplementary Information](index=5&type=section&id=Supplementary%20Information) [About Colgate-Palmolive & Investor Information](index=5&type=section&id=About%20Colgate-Palmolive) Colgate-Palmolive is a global consumer products company focused on Oral Care, Personal Care, Home Care, and Pet Nutrition, with upcoming investor events - The company focuses on four core business areas: Oral Care, Personal Care, Home Care, and Pet Nutrition[20](index=20&type=chunk) - The company will host a conference call and webcast on January 31, 2025, to discuss results, with materials available on its investor website[18](index=18&type=chunk)[19](index=19&type=chunk) - The annual meeting of stockholders is scheduled for Friday, May 9, 2025[20](index=20&type=chunk) [Important Disclosures and Definitions](index=5&type=section&id=Cautionary%20Statement%20and%20Non-GAAP%20Measures) This section provides cautionary statements on forward-looking information and defines key non-GAAP financial measures for clearer business trend analysis - The report contains forward-looking statements based on management's current plans and assumptions, which are not guarantees of future performance; investors should refer to SEC filings for risk factors[23](index=23&type=chunk)[24](index=24&type=chunk) - Organic sales growth is a non-GAAP measure excluding foreign exchange, acquisitions, and divestments to show underlying sales trends[25](index=25&type=chunk)[27](index=27&type=chunk) - Base Business results are non-GAAP measures excluding non-recurring items like restructuring, litigation, and product recall costs[26](index=26&type=chunk)[27](index=27&type=chunk) - Market share data relies on third-party vendors and internal estimates, subject to limitations such as the exclusion of certain retail channels like eCommerce[21](index=21&type=chunk)[22](index=22&type=chunk)

Colgate-Palmolive Company CL will release earnings results for its fourth quarter before the opening bell on Friday, Jan. 31, 2025.Analysts expect the New York-based company to report quarterly earnings at 89 cents per share, up from 87 cents per share in the year-ago period. Colgate-Palmolive projects to report revenue of $4.99 billion for the recent quarter, compared to $4.95 billion a year earlier, according to data from Benzinga Pro.On Dec. 11, the company's Board of Directors declared a quarterly cash ...

Core Viewpoint - Colgate-Palmolive Company (CL) is anticipated to report growth in both revenue and earnings for the fourth quarter of 2024, with revenue expected to reach $5 billion, reflecting a 1.2% increase year-over-year, and earnings estimated at 89 cents per share, indicating a 2.3% growth from the previous year [1][2]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for fourth-quarter revenues is $5 billion, up 1.2% from the same quarter last year [1]. - The consensus estimate for earnings is 89 cents per share, suggesting a growth of 2.3% year-over-year [2]. Earnings Performance - In the last reported quarter, Colgate's earnings exceeded the consensus estimate by 3.4%, with an average earnings surprise of 3.8% over the trailing four quarters [2]. Earnings Prediction Model - The current Earnings ESP for Colgate is -0.91%, and it holds a Zacks Rank of 3 (Hold), indicating that the model does not predict a definitive earnings beat this season [3]. Business Momentum and Growth Drivers - Colgate's fourth-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]. - The company is projected to achieve organic sales growth of 6.5%, with significant improvements in various regions, including 12% in Latin America and 9% in Europe [5]. Gross Margin and Profitability - The adjusted gross margin is expected to expand by 210 basis points to 61.7%, with a 5.6% year-over-year increase in adjusted gross profit [7]. - Colgate has been experiencing a sequential rise in gross margin due to strong pricing and revenue growth management initiatives [6]. Challenges and Headwinds - The company faces challenges such as volume softness in China and lower private label growth, which may slightly impact top-line performance [8]. - Higher raw material costs and inflationary foreign exchange pressures are also expected to offset some gross margin growth [9]. SG&A Expenses - SG&A expenses are anticipated to rise by 6.9% year-over-year, reaching 38.2% of sales, reflecting continued investment in digital and analytics capabilities [10]. Stock Performance and Valuation - Colgate's shares have increased by 8.7% over the past year, outperforming the broader industry growth of 0.9% but underperforming the S&P 500 index, which grew by 24.8% [11]. - The stock trades at a forward P/E multiple of 24.04X, higher than the industry average of 21.43X and the S&P 500's average of 22.64X, indicating a relatively pricey valuation [14].

Stock Performance - Colgate-Palmolive Company (CL) shares appreciated 13.1% in the trailing 12 months, outperforming the Zacks Consumer Products – Staples industry's rise of 6% and the broader Zacks Consumer Staples sector's return of 0.2% [1] - The upswing was driven by strong pricing, funding-the-growth initiatives, and solid business momentum, leading to robust performance in Q3 2024 [3] Financial Metrics - Adjusted gross margin rose to 61.3% and adjusted operating profit margin increased to 21.5% in Q3 2024 [4] - Year-over-year earnings per share growth was achieved, driven by higher gross margins and improved pricing across all divisions except North America [5] - Organic sales growth was bolstered by increased volume and pricing, with every operating division reporting volume growth for the second consecutive quarter [5] Strategic Initiatives - The company's strategy of combining core and premium innovation with increased advertising investment and enhanced capabilities is driving brand strength and expanding household penetration [6] - Successful product launches include CO by Colgate, Colgate Elixir toothpaste, and Colgate enzyme whitening toothpaste [6] Outlook and Guidance - Management forecasts gross profit margin expansion on both GAAP and adjusted bases, driven by pricing gains and revenue-growth management initiatives [7] - Base Business's EPS is expected to increase 10-11% in 2024, with GAAP EPS rising by double digits [7] - Net sales growth is anticipated at 3-5%, with organic sales growth expected at 7-8% for 2024 [8] - Currency translations are expected to have a mid-single-digit negative impact on sales [8] Revised Estimates - The Zacks Consensus Estimate for CL's fiscal 2024 earnings has remained unchanged in the past 30 days [9] - For 2024, sales and EPS are expected to grow 3.9% and 11.2% year-over-year, respectively [9] - For 2025, sales and earnings are expected to grow 3.1% and 6.7% year-over-year, respectively [9] Challenges - The company faces macroeconomic instability and foreign currency headwinds [10] - Persistent inflation in raw materials and packaging costs has negatively impacted profitability [10] - North America's net sales dipped 1.9% year-over-year on an organic basis, with a 3.2% decrease in pricing offset by a 1.2% increase in volume [11] - Latin America's net sales fell 3.2% year-over-year due to unfavorable currency impacts [11] - Foreign currency fluctuations reduced total sales growth by 4.4% in Q3, with significant effects from Argentina and the Africa/Eurasia division [12] Final Thoughts - CL's robust pricing strategies, productivity initiatives, and innovations make the stock attractive for long-term investors [13] - Continuing challenges like macroeconomic instability and foreign currency headwinds act as deterrents, suggesting current investors retain their positions while new investors wait for a more favorable entry point [14]

Economic Outlook - As of January 9, 2025, the New York Fed's model indicates a 29% chance of a U.S. recession in 2025, a significant decrease from 70% two years prior [1] - Investors are expected to approach the new year with caution, seeking recession-proof investments due to uncertainties such as regulatory changes and military activities [2] Defensive Investment Opportunities - Analysts recommend defensive plays in consumer staples and retail, highlighting Procter & Gamble, Colgate-Palmolive, and Costco as strong candidates [3] Procter & Gamble (P&G) - P&G has a dividend yield of 2.53%, an annual dividend of $4.02, and a 69-year history of dividend increases, making it attractive for passive income [3] - P&G shares increased by approximately 9% leading up to January 9, 2025, despite a recent 5% decline, suggesting a potential buying opportunity [4] - Analysts project an 11% upside for P&G based on a consensus price target of $179.75, with its diverse product lineup providing stability during economic downturns [4] Colgate-Palmolive - Colgate-Palmolive offers a dividend yield of 2.32% and has a 62-year history of dividend payments, with an annualized 3-year dividend growth of 3.42% [6] - The stock reached an all-time high of over $105 in August 2024, driven by strong sales and improved operating margins, with analysts expecting 8% earnings growth [7] Costco - Costco has a dividend yield of 0.50% and an annualized 3-year dividend growth of 13.59%, with a 21-year history of dividend increases [8] - The stock reached all-time highs near $1,000 in December 2024, supported by an aggressive expansion plan and a 21% increase in e-commerce sales [9] - Despite a membership fee increase, Costco's member base grew by nearly 8% in the last quarter, indicating strong customer loyalty and a positive outlook for profits in 2025 and 2026 [10]

Core Viewpoint - Investing in high-quality, dividend-paying companies, particularly during market downturns, can provide significant benefits, with Dividend Kings like Walmart, Colgate-Palmolive, and Kimberly-Clark being highlighted as recession-resistant options poised for dividend increases in 2025 [2]. Group 1: Walmart - Walmart's stock saw a remarkable 71.9% increase in 2023, following a period of underperformance, and is generating record revenue with improved operating margins [3][4]. - On February 20, 2024, Walmart announced a 9% dividend increase, the highest in over a decade, and is expected to announce another significant raise due to a reasonable payout ratio of 33.2% [5]. - Analyst estimates for fiscal 2026 project earnings per share at $2.76, reflecting an 11.3% increase from fiscal 2025, although the stock's forward P/E ratio of 36.6 indicates it has become expensive [6][7]. Group 2: Colgate-Palmolive - Colgate-Palmolive benefits from strong brand diversification, with notable brands including Speed Stick and Hill's, and reported a 3.7% increase in organic volume and a 6.8% rise in organic sales in the latest quarter [8][9]. - The company has a geographically diversified revenue stream, with only 20% of sales coming from North America, and Hill's brand contributing 22% to revenue [9][10]. - Colgate-Palmolive has paid uninterrupted dividends since 1895, increasing them for 61 consecutive years, with a current yield of 2.2% and a forward P/E of 23.4, making it a solid choice for risk-averse investors [11][12]. Group 3: Kimberly-Clark - Kimberly-Clark operates in various consumer staples sectors and is considered recession-resistant, but it faces pricing and volume pressures, with only 1% volume growth and a 2% increase in net prices, leading to a total consolidated growth decline of 2% [13][14]. - The stock has decreased by 4.4% over the past five years, with sales and operating income growth of only 6.8% and 5.8%, respectively, resulting in a current yield of 3.8% and a forward P/E of 17 [15]. - Despite the lack of growth, Kimberly-Clark is viewed as a valuable source of passive income, appealing to investors focused on dividend income rather than capital gains [16].

Core Insights - Colgate-Palmolive Company (CL) stock has increased by 19.1% over the past year, outperforming the Zacks Soap and Cleaning Materials industry's growth of 11.8% and the broader Consumer Staples sector's rise of 4.4% [1] - The company's growth is attributed to effective pricing and productivity initiatives, as well as a successful innovation strategy [1][2] Innovation Strategy - Colgate's innovation strategy focuses on expanding into adjacent categories and enhancing its Oral Care portfolio through premiumization [2] - Products such as CO. by Colgate, Colgate Elixir toothpaste, and Colgate enzyme whitening toothpaste have shown strong performance, along with at-home and professional whitening products [3] Market Expansion - The company is expanding its Naturals and Therapeutics divisions and has acquired Hello Products LLC, contributing to market share growth in its Hill's Science Diet and Hill's Prescription Diet [4] - Colgate's revamped innovation model and investment in marketing have strengthened brand health and household penetration [5] Financial Performance - In the most recent quarter, Colgate reported a 3.1% year-over-year improvement in pricing, with positive pricing across all divisions except North America [5] - Analysts project a 3.2% increase in sales and a 7.3% rise in earnings per share (EPS) for 2025 [10] Challenges - The company faces challenges from macroeconomic conditions, including raw material cost inflation and rising packaging costs, which may impact profitability [8] - Increased selling, general and administrative expenses, along with higher advertising costs anticipated for 2024, are also concerns [8] - Unfavorable foreign currency fluctuations are expected to negatively impact sales in 2024 [9]

Core Insights - The consumer staples sector is undergoing significant transformation due to economic challenges and evolving consumer preferences, particularly towards health and wellness, convenience, and sustainability [1][2][7]. Industry Trends - The rise of e-commerce and digital shopping platforms has changed consumer interactions with staple brands, making convenience and personalized experiences essential for customer loyalty [1]. - There is a growing focus on health and wellness, with consumers preferring products with clean labels, natural ingredients, and functional benefits, leading to increased demand for low-sugar, plant-based, and protein-rich options [2]. - Economic pressures, such as rising inflation and tighter household budgets, are prompting consumers to prioritize value and essential goods over discretionary items [7][8]. Company Strategies - Companies in the staple sector are reimagining their strategies by investing in product innovation, leveraging technology, and acquiring brands that align with emerging trends to capture growth opportunities [3]. - Tyson Foods is expanding its portfolio of healthier food options and investing in plant-based products, with projected sales growth of approximately 2% and earnings per share (EPS) growth of 13.2% for the current fiscal year [4][16]. - Freshpet, Inc. focuses on healthy, clean ingredients for pets, experiencing significant sales growth with a projected year-over-year increase of 27.2% [11][18]. - Procter & Gamble is committed to non-toxic formulations and eco-friendly packaging, with expected sales growth of 1.7% and EPS growth of 5.2% for the current fiscal year [6][12]. - Colgate-Palmolive is expanding its portfolio of non-toxic and sustainable products, with projected sales growth of 3.8% and EPS growth of 11.2% for the current fiscal year [13][14]. - Constellation Brands is diversifying into health-conscious products, with expected sales growth of 4.1% and EPS growth of 12.6% for the current fiscal year [10][17].

Core Insights - The individual has a strong interest in financial markets, particularly in fundamental analysis, which evaluates actual company performance rather than price movements [1] - The focus is primarily on long-term investments in stocks and ETFs, with a preference for US companies, while also analyzing European and Chinese firms [1] - The banking sector is highlighted as a key area of interest, viewed as essential for understanding economic health [1] Investment Approach - The investment strategy is characterized by a contrarian view, indicating a willingness to go against prevailing market trends [1] - The individual emphasizes the importance of macroeconomics in investment decisions, suggesting a holistic approach to market analysis [1]