Colgate-Palmolive Company
Earnings And Margins
Base Business EPS rose 8% to 99 cents, beating the 95-cent estimate. Net sales increased 4.9% to $5.361 billion, above the $5.358 billion estimate, while organic sales grew 2.4%.
The organic result included a 0.4-percentage-point drag from the private-label pet food exit. GAAP EPS fell 5% to 86 cents, while net income declined to $693 million from $743 million.
Gross margin expanded 140 basis points to 61.5% on both a GAAP and Base Business basis.
Productivity added 280 basis points, and pricing contributed 60 basis points, offsetting a 220-basis-point raw-material headwind that included tariffs and tariff refunds.
Tariff refunds drove roughly one-third of the margin expansion.
GAAP operating profit fell 6% to $1.016 billion, including $129 million in productivity-program charges. Base Business operating profit rose 5% to $1.145 billion.
Sales Drivers And Management Commentary
Organic volume increased 0.8%, while pricing rose 1.6%. Advertising spending climbed 15% to $777 million, or a record 14.5% of sales.
"While we expect the volatile market conditions to continue in the balance of 2026, we are confident that the strength of our global portfolio and clear business strategy should enable us to deliver consistent, compounded earnings per share growth and drive long-term shareholder value," Chairman, President and CEO Noel Wallace said.
Wallace said the company plans to maintain strong second-half investment. Its priorities include premium, science-led innovation and omni-channel demand generation.
Regional Performance And Cash Flow
Latin America sales rose 13.7%, while Asia Pacific increased 4.9%.
Europe, Middle East and Africa gained 3.5%, and Hill's Pet Nutrition grew 3.4%.
North America sales fell 3% amid slower category growth, market-share losses, heightened competition and retailer inventory reductions.
The Middle East conflict reduced EMEA organic growth by about 1 percentage point.
First-half operating cash flow rose to $1.742 billion. Free cash flow increased to $1.476 billion. Cash totaled $1.37 billion, while debt stood at $7.857 billion.
2026 Guidance And Stock Catalyst
Colgate maintained its 2026 net sales growth outlook of 2% to 6%, implying sales of about $20.790 billion to $21.605 billion based on 2025 revenue, versus the $21.463 billion estimate. Organic sales growth guidance remained at 1% to 4%.
The company raised Base Business EPS growth guidance to mid-single digits and now expects gross margin to remain roughly flat.
The stock decline followed weakness in North America and management's warning that recently announced tariff increases would more than offset second-quarter tariff refunds.
Those concerns outweighed the earnings beat and improved profit outlook.
CL Price Action: Colgate-Palmolive shares were down 1.48% at $90.24 at the time of publication on Friday, according to Benzinga Pro data.
