Colgate-Palmolive Company

What they do

The company sells oral care products under brands including Colgate, elmex and Tom's of Maine, personal care products under Palmolive, Softsoap and Irish Spring, and home care products under Ajax, Fabuloso and Suavitel. Its Hill's Pet Nutrition segment markets Science Diet, Prescription Diet and Prime100 pet foods in over 80 countries. The Oral, Personal and Home Care segment is managed geographically across North America, Latin America, Europe, Asia Pacific and Africa/Eurasia. Products are sold through retailers, wholesalers, distributors, veterinarians and eCommerce, with approximately two-thirds of net sales generated outside the United States.

Revenue drivers

• Oral Care — Toothpaste, toothbrushes, mouthwash and professional oral health products sold under Colgate, Darlie, elmex, hello, meridol, Sorriso and Tom's of Maine; accounted for 44% of total worldwide net sales in 2025, with global leadership in toothpaste and manual toothbrushes.
• Pet Nutrition (Hill's) — Specialty dog and cat foods sold under Hill's Science Diet, Hill's Prescription Diet and Prime100 through pet specialty retailers, veterinarians and eCommerce; accounted for 23% of total worldwide net sales in 2025.
• Personal Care — Liquid hand soap (global leadership), bar soaps, shower gels, deodorants and skin health products under Palmolive, Protex, Softsoap, Irish Spring, Sanex, Speed Stick, EltaMD, Filorga and PCA SKIN; accounted for 17% of total worldwide net sales in 2025.
• Home Care — Dishwashing liquids, household cleaners and fabric conditioners under Ajax, Axion, Palmolive, Fabuloso, Murphy, Suavitel, Soupline, Fluffy and Cuddly; accounted for 16% of total worldwide net sales in 2025.

Recent performance

Second quarter 2026 net sales rose 4.9% to $5,361 million, with organic sales growth of 2.4% including a 0.4% negative impact from lower private label pet food sales. GAAP diluted EPS fell 5% to $0.86, while Base Business EPS rose 8% to $0.99. GAAP and Base Business gross profit margin both increased 140 basis points to 61.5%. Net cash provided by operations was $1,742 million for the first six months of 2026. The company maintained global leadership in toothpaste at 41.3% market share and manual toothbrushes at 32.7% year to date.

Strategy

Management describes the company as a caring, innovative growth company focused on driving organic sales growth, consistent compounded EPS growth, operational efficiencies and free cash flow. It prioritizes building on the global reach of its brands, superior science-based innovation, an agile supply chain, omni-channel demand generation and capabilities in data, analytics and AI. Advertising investment increased 15% in the second quarter, and the company says strong investment levels will continue in the back half of 2026 under its 2030 strategy. The company is exiting its private label pet food business, which affects organic sales growth expectations.

Risks

• International operations and foreign currency — Approximately two-thirds of net sales come from outside the United States, exposing results to exchange-rate moves that may reduce the U.S. dollar value of revenues and cash flows, and to varying macroeconomic and political conditions across more than 200 countries and territories.
• Tariffs and trade relations — New or increased tariffs by the United States and other countries, retaliatory tariffs and renegotiated trade agreements such as the United States-Mexico-Canada Agreement have contributed to inflationary pressures and could affect the cost or availability of raw and packaging materials.
• Geopolitical conflict — The war in Ukraine and related tensions affect operations in Ukraine and Russia; the Eurasia region represented approximately 1% of consolidated net sales and 2% of consolidated operating profit for the year ended December 31, 2025.
• Customer concentration — Sales to Walmart, Inc. and its affiliates represented approximately 11% of net sales in 2025, with no other customer above 10%.

Outlook

For full year 2026, the company still expects net sales to increase 2% to 6%, including a low-single-digit positive impact from foreign exchange, and organic sales growth of 1% to 4% including the impact of exiting the private label pet food business. On a GAAP basis it now expects gross profit margin roughly flat versus down previously, advertising up in dollars and as a percentage of net sales, and double-digit EPS growth. On a Base Business basis it now expects gross profit margin roughly flat and mid-single-digit EPS growth, versus low- to mid-single-digit growth previously. Management expects volatile market conditions to continue in the balance of 2026.