9:22 AM, Jan 25, 2019 — Colgate-Palmolive Company (CL) said fourth quarter sales fell year-on-year as Latin America, Asia Pacific and Europe slowed, but both earnings and sales still came in ahead of Wall Street’s expectations.
Net sales fell to $3.81 billion from $3.89 billion a year earlier, while the consensus on Capital IQ was for $3.78 billion. Non-GAAP earnings were $0.74 a share in the final quarter of 2018, a penny below the 2017 comparison but just ahead of the Street’s projection for $0.73.
Organic sales rose 2% in the quarter while the gross profit margin dipped to 59.1% from 59.8% a year earlier. Excluding charges from the company’s efficiency program, the margin was 59.4%, down 100 basis points from the year ago period “as higher raw and packaging materials costs were partially offset by cost savings from the company’s funding-the-growth initiatives and higher pricing.”
The maker of Hill’s pet food and Speed Stick deodorant said North American net sales rose 5% in the fourth quarter as Colgate toothpaste held on to a leadership spot in that category. Latin American sales fell 9% with declines in Brazil and Argentina that were partially offset by volume gains in Mexico.
Sales were down 2.5% in Europe and fell 6.5% in Asia Pacific while Africa and Eurasia sales decreased 5% in the quarter.
Shares were down about 2% in early trading on Friday.
Colgate-Palmolive’s chief executive Ian Cook said they were “pleased with the improvement in organic sales growth” while projecting an increase in the figure of 2% to 4% for this year. Net sales are projected flat to up low single digits, Cook said.
Excluding charges from its efficiency program and tax-related matters, “we are planning for a year of gross margin expansion, increased advertising investment and a mid-single-digit decline in earnings per share,” Cook said. “Our outlook reflects an increase in raw material prices, an increase in our tax rate year-over-year and the uncertainty surrounding the global economy, exchange rates and pricing.”
Companies: Colgate-Palmolive Company
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