Colgate-Palmolive Raises Full-Year Guidance Driven by International Sales and Pet Care

Colgate-Palmolive Company updated its full-year outlook after reporting quarterly financial results that beat Wall Street expectations. Strong performance across emerging markets and its pet care division offset soft demand in the domestic market. Management increased its annual Base Business earnings per share growth forecast to the mid-to-high single digits, or 5% to 7%, up from an earlier projection of mid-single digits, and stated that it now anticipates gross margin expansion for the full year.

The quarterly gains were driven primarily by Latin America and Hill's Pet Nutrition. Latin America recorded low-double-digit net sales growth alongside a double-digit jump in operating profit. Hill's Pet Nutrition also outperformed the parent organization, generating modest net sales and organic growth powered by higher pricing and volume gains. In other overseas segments, Asia Pacific delivered mid-single-digit organic growth, while Europe, Middle East and Africa lifted operating earnings by a high-single-digit percentage.

In contrast, North America remained a drag on company results. Regional net sales and organic sales both fell slightly, with organic sales slipping 1.6%. A sharp drop in volume and weaker consumer demand caused North American operating profit to decline by 11%. A decision to exit the private label pet food segment also created a slight headwind for organic revenue growth. In addition, charges tied to the Strategic Growth and Productivity Program affected reported results relative to Base Business numbers.

Colgate-Palmolive faces upcoming uncertainties heading into the holiday shopping period. The company noted that potential volume weakness among North American shoppers could weigh on future quarters. Management also pointed to elevated oil-linked input expenses stemming from the Middle East conflict, as well as high resin, pulp, and paper costs that could persist into early 2027.

Despite these headwinds, the company's balance sheet and cash flow provide significant dividend support. Over the twelve months ending September 30, Colgate paid out $1.83 billion in dividends from $3.79 billion of free cash flow, representing a 48% payout ratio. The stock trades on the New York Stock Exchange under the ticker CL, where it recently traded around $98.00.