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Colgate-Palmolive(CL) - 2025 Q1 - Quarterly Report
CLColgate-Palmolive(CL)2025-04-25 12:31
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Sales Performance - Approximately two-thirds of Colgate-Palmolive's net sales are generated from markets outside the U.S., with about 45% coming from emerging markets[90]. - Worldwide net sales were 4,911millioninQ12025,down3.14,911 million in Q1 2025, down 3.1% from Q1 2024, with organic sales increasing by 1.4%[112]. - Net sales in the Oral, Personal and Home Care segment were 3,792 million, down 4.3% from Q1 2024, while organic sales increased by 1.0%[113]. - Net sales in North America decreased 3.6% to 998million,drivenbyvolumedeclinesof2.3998 million, driven by volume declines of 2.3% and net selling price decreases of 0.7%[145]. - Net sales in Latin America decreased 8.7% to 1,143 million, impacted by negative foreign exchange of 12.7%[148]. - Net sales in Europe increased 2.5% to 690million,withorganicsalesgrowthof5.4690 million, with organic sales growth of 5.4% driven by the United Kingdom, Germany, and France[152]. - Net sales in Asia Pacific decreased 5.0% to 690 million, with organic sales declining 3.1% primarily due to the Greater China region[155]. - Net sales in the Hill's Pet Nutrition segment were 1,118million,up1.51,118 million, up 1.5% from Q1 2024, with organic sales increasing by 2.9%[115]. Profitability and Expenses - Gross profit decreased to 2,987 million in Q1 2025 from 3,039millioninQ12024,whilegrossprofitmarginincreasedto60.83,039 million in Q1 2024, while gross profit margin increased to 60.8% from 60.0%[117][118]. - Selling, general and administrative expenses decreased by 1% to 1,898 million, with a percentage of net sales increasing to 38.6% from 37.8%[120][121]. - Operating profit increased by 3% to 1,076million,withanoperatingprofitmarginof21.91,076 million, with an operating profit margin of 21.9%, up 120 basis points from the previous year[126][127]. - Operating profit in North America decreased 8% to 196 million, with a margin of 19.6%, down 100 basis points from the previous year[147]. - Operating profit in Europe increased 12% to 172million,withamarginof24.9172 million, with a margin of 24.9%, up 220 basis points[154]. - Operating profit for Hill's Pet Nutrition rose 30% to 258 million, with an operating profit margin of 23.1%, an increase of 510 basis points compared to the previous year[163]. Income and Earnings Per Share - Net income attributable to Colgate-Palmolive Company in Q1 2025 increased to 690million,upfrom690 million, up from 683 million in Q1 2024, with diluted earnings per share rising to 0.85from0.85 from 0.83[141]. - Excluding certain charges, net income in Q1 2025 increased 4% to 743million,anddilutedearningspershareincreased6743 million, and diluted earnings per share increased 6% to 0.91[142]. Costs and Charges - The company expects incremental gross costs of approximately 200millionin2025duetotariffsimposedbytheUnitedStatesandothercountries[104].−Thecompanyrecordedachargeof200 million in 2025 due to tariffs imposed by the United States and other countries[104]. - The company recorded a charge of 65 million related to a lawsuit under the Employee Retirement Income Security Act (ERISA) during the quarter ended March 31, 2025[101]. - Non-service related postretirement costs were 72millioninQ12025comparedto72 million in Q1 2025 compared to 22 million in Q1 2024[129]. - Colgate-Palmolive continues to experience higher raw and packaging material costs, which may adversely affect future results[107]. Strategic Initiatives - Colgate-Palmolive announced the acquisition of Care TopCo Pty Ltd, owner of the Prime100 pet food brand, which is expected to close in Q2 2025[93]. - The 2022 Global Productivity Initiative resulted in pretax costs of 36million,aimedatreallocatingresourcestowardsstrategicprioritiesandefficiencies[102].−Thecompanyisfocusedondeliveringconsistentcompoundedearningspersharegrowththroughorganicsalesgrowthandoperationalefficiencies[111].−Colgate−Palmolive′sbusinessstrategyincludesprioritizinginvestmentsinhighgrowthandhighmarginsegmentswithinOralCare,PersonalCare,andPetNutrition[99].MarketConditions−Thecompanyfacesheightenedcompetitiveactivityincertainmarkets,impactingpricingpressuresandrelationshipswithkeyretailers[108].−Theglobaltoothpastemarketsharewas40.936 million, aimed at reallocating resources towards strategic priorities and efficiencies[102]. - The company is focused on delivering consistent compounded earnings per share growth through organic sales growth and operational efficiencies[111]. - Colgate-Palmolive's business strategy includes prioritizing investments in high growth and high margin segments within Oral Care, Personal Care, and Pet Nutrition[99]. Market Conditions - The company faces heightened competitive activity in certain markets, impacting pricing pressures and relationships with key retailers[108]. - The global toothpaste market share was 40.9%, a decrease of 0.5 share points year-over-year, while the manual toothbrush market share increased to 31.9%, up 0.3 share points[114]. Cash Flow and Debt - Net cash provided by operations decreased by 12% to 600 million in Q1 2025, compared to 681millioninQ12024,mainlyduetochangesinworkingcapital[173].−Totaldebtincreasedto681 million in Q1 2024, mainly due to changes in working capital[173]. - Total debt increased to 8,269 million as of March 31, 2025, up from 7,949millionattheendof2024[176].DividendsandCapitalExpenditures−Thecompanyannouncedanincreaseinthequarterlycommonstockdividendto7,949 million at the end of 2024[176]. Dividends and Capital Expenditures - The company announced an increase in the quarterly common stock dividend to 0.52 per share from 0.50,effectiveinQ22025[179].−CapitalexpendituresforQ12025were0.50, effective in Q2 2025[179]. - Capital expenditures for Q1 2025 were 124 million, with expectations for capital expenditures to be approximately 3.0% of net sales for the year[174]. IT and Internal Controls - The company is in the process of upgrading its enterprise IT system to SAP S/4 HANA, which is not expected to materially impact internal controls over financial reporting[189]. - As of March 31, 2025, the company's disclosure controls and procedures were evaluated and deemed effective by the management team[188]. - There were no material changes in the company's internal control over financial reporting during the most recent fiscal quarter[190]. - There is no material change in the information regarding market risk exposure as reported in the Annual Report for the year ended December 31, 2024[186].