Colgate-Palmolive Company (NYSE:CL) Q4 2025 Earnings call January 30, 2026 08:30 AM ET Company ParticipantsAndrea Teixeira - Executive DirectorBonnie Herzog - Managing DirectorDara Mohsenian - Managing Director in US Beverage and Household Products SectorsFilippo Falorni - Director in Equity ResearchJohn Faucher - Chief Investor Relations Officer and EVP in M&AKaumil Gajrawala - Managing Director in Beverage, Household Products, and HALO StrategyKevin Grundy - Managing DirectorLauren Lieberman - Managing Di ...

Financial Data and Key Metrics Changes - The company reported stronger-than-expected Q4 results, with organic sales growth, net sales, gross profit, base business earnings per share, and free cash flow growth in 2025 despite challenges such as lower-than-expected category growth and higher raw material inflation [3][4] - The company achieved $5 billion in sales growth as part of its 2025 strategy, transitioning to a new 2030 strategy aimed at accelerating change and driving top-tier growth [4][8] Business Line Data and Key Metrics Changes - Organic sales growth was observed in all four categories in Q4, with modest volume growth excluding the impact of the Prime100 acquisition and planned exit from the private label business [4][8] - The Hill's brand showed strong growth, with volume growth exceeding 5% on an underlying basis, despite challenges in the overall category [21][32] Market Data and Key Metrics Changes - Emerging markets, particularly Latin America, performed well with high single-digit growth in Mexico and Brazil, contributing to an overall organic growth of about 4.5% in emerging markets [58][60] - North America faced challenges, with nine categories experiencing volume declines in October and ten in November, although December showed slight improvement [48][50] Company Strategy and Development Direction - The company is focusing on five key areas: leveraging strong global brands, accelerating investment in innovation, enhancing omni-channel demand generation, investing in digital and AI capabilities, and fostering a high-impact culture [5][7][8] - The Strategic Growth and Productivity Program aims to unlock organizational changes and funding necessary to support the new strategy, with a focus on building brand capabilities and driving productivity [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, citing improved momentum in Q4 and stabilization of category growth rates, but acknowledged significant uncertainty in the market [9][10] - The company is cautious about the U.S. market, expecting continued challenges in the near term but believes that innovation and premiumization strategies will drive future growth [50][95] Other Important Information - The company noted that foreign exchange has been favorable recently, but historically has only been a tailwind in two of the last ten years, and will be managed flexibly in the business model [23][70] - The company is adapting its organizational structure to focus on omni-channel demand generation, aiming to enhance decision-making and responsiveness to market changes [90][91] Q&A Session Summary Question: Insights on category growth and market share positioning - Management indicated that category growth has stabilized at lower rates than historical assumptions, with expectations of gradual improvement in 2026 [18][26] Question: Performance of the Hill's brand - Despite challenges in the category, the Hill's brand experienced strong volume growth, driven by science-based innovation and improved market shares [31][32] Question: North America market challenges - Management acknowledged the sluggishness in North America, particularly in personal care, and emphasized the need for a stronger innovation pipeline and effective revenue growth management strategies [46][50] Question: Emerging markets performance - Emerging markets showed strong growth, particularly in Latin America, with a focus on executing strategic growth initiatives to capitalize on favorable category growth rates [58][60] Question: Advertising and promotional strategies - Management discussed the need for a balanced approach to advertising spend, focusing on efficiency while also investing in areas that will drive market share and category growth [41][44]

Colgate-Palmolive Company (NYSE:CL) 2025 Conference Summary Company Overview - **Company**: Colgate-Palmolive Company - **Industry**: Household Products and Consumer Goods - **Event**: Global Consumer and Retail Conference - **Date**: December 02, 2025 Key Points 2030 Strategic Plan - The new Chief Growth Officer emphasizes the importance of strong brands as the foundation for growth, focusing on consumer needs and insights [2][4] - The 2030 strategy will build on the successes of the 2025 plan, with a focus on science-led growth and perceived superiority in brand offerings [4][5] - Investment in data analytics and digital tools is crucial for driving revenue growth and marketing efficiency [5][6] Omni Demand Generation (ODG) - ODG is a key focus area, adapting to the modern consumer's shopping journey which includes both online and offline experiences [7][8] - The company aims to reorganize marketing and sales workflows to deliver a consistent brand experience [8] Strategic Growth and Productivity Program (SGPP) - SGPP is a multi-year productivity initiative aimed at making strategic investments while also contributing to bottom-line growth [9][10] - The program will focus on core productivity improvements and supply chain efficiencies [10][12] Marketing and Advertising Investments - Colgate has increased marketing spend significantly, from under 10% of sales to 13.5% in the previous year, with a focus on improving return on investment [14][15] - The company is leveraging AI for content generation and marketing strategies to enhance efficiency [15][36] Resource Allocation and Growth Opportunities - The 2030 strategy involves careful resource allocation to areas with the highest growth potential, including emerging markets and specific product categories [18][22] - The company is focusing on premiumization and innovation, particularly in oral care and pet nutrition [52][57] Consumer Environment Insights - The consumer environment is challenging, particularly in North America, but Colgate is making progress through increased investment in brands and innovation [30][31] - The company sees potential for growth in emerging markets, despite current economic challenges [29][32] Innovation and Premiumization - Colgate's innovation strategy has contributed significantly to top-line growth, with 45% of incrementality attributed to new products over the last four years [52][53] - The company is focusing on premium products and therapeutic nutrition in the pet care segment, anticipating long-term growth despite short-term challenges [57][59] AI and Technological Advancements - AI is viewed as a transformative technology that will enhance productivity and support growth initiatives [36][47] - The company is developing proprietary tools to improve innovation processes and consumer engagement [39][40] Market Outlook - Long-term category growth is expected to be between 2-4%, with Colgate aiming to outperform this through strategic investments and innovation [26][27] - The company is cautious about relying on favorable foreign exchange rates and is focused on controllable factors like productivity [27][28] Additional Insights - The company is adapting to changes in consumer behavior and market dynamics, particularly in the context of e-commerce and digital marketing [7][36] - Colgate's focus on collaboration between central category groups and local divisions is intended to enhance innovation and market responsiveness [55][56]

Financial Performance - Net sales decreased by 3.1%, including a 4.4% negative impact from foreign exchange[21] - Organic sales increased by 1.4%, but experienced a 0.4% negative impact from lower private label pet volume[21] - GAAP and Base Business Gross profit margin increased 80 basis points to 60.8%[21] - Base Business EPS increased 6%[21] Strategic Investments - Advertising as a percentage of sales increased 30 basis points to 13.6% to support building brand health and strong innovation[21] Guidance - Net sales growth is now expected to be up low single digits, including a low-single-digit negative impact from foreign exchange[25] - Organic sales growth is now expected to be 2% to 4%, including the impact of the planned exit from private label pet nutrition over the course of 2025[27] - The company expects the incremental tariffs announced and in effect as of April 24, 2025 to have an incremental gross impact of approximately $200 million dollars to the cost of goods sold in 2025[30] Market Share - Global toothpaste market share was up 20 basis points on a volume basis[21] Company Overview - Colgate-Palmolive is a $20.1B global consumer products company with ~34,000 employees serving over 200 countries and territories[7]