Colgate-Palmolive(CL) - 2025 Q2 - Quarterly Results

Financial Highlights 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] - The company maintained global market leadership year-to-date in toothpaste with 41.1% share and manual toothbrushes with 32.4% share[3] Business Outlook and Strategic Initiatives 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-$300 million by December 31, 2028[5] Divisional Performance Q2 2025 divisional performance varied, with strong net sales growth in Europe and Africa/Eurasia, declines in North and Latin America, and varied operating profit trends Q2 2025 Net Sales Growth by Division (% change vs. Q2 2024) | Division | % of Total Sales | Net Sales | Organic Sales* | Pricing | FX | | :--- | :--- | :--- | :--- | :--- | :--- | | North America | 20% | -1.0% | -0.9% | -0.5% | -0.1% | | Latin America | 24% | -4.8% | +3.4% | +3.0% | -8.2% | | Europe | 14% | +7.8% | +2.0% | +2.2% | +5.7% | | Asia Pacific | 13% | +0.8% | —% | +1.6% | +0.9% | | Africa/Eurasia | 6% | +8.0% | +7.7% | +3.4% | +0.2% | | Hill's | 23% | +3.8% | +2.0% | +2.9% | +0.8% | | Total Company | 100% | +1.0% | +1.8% | +2.0% | -1.0% | Q2 2025 Operating Profit by Division | Division | Operating Profit ($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 This section presents the company's consolidated statements of income, balance sheet, and cash flows for the reported periods Statements of Income 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 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 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 This appendix provides detailed segment and geographic sales analysis, non-GAAP reconciliations, and important disclosures regarding the financial report Segment and Geographic Sales Analysis 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] Non-GAAP Reconciliations 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 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] - 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][19]