Colgate-Palmolive reported second-quarter net sales of $5.36B on July 31, while reaffirming its full-year sales growth forecast of 2% to 6%.
North America, which represents 17% of total company sales, saw organic sales fall 3%, with volumes down 3.9%, as slower category growth, market share losses, increased competition, and retailer inventory reductions all weighed on results.
High food and fuel prices tied to the Middle East conflict have hit lower-income US shoppers hard, making it tougher for consumer goods companies to serve both budget and premium segments.
GAAP net income fell to $693M from $743M a year ago, driven partly by higher selling, general, and administrative expenses.
Latin America was the standout, with net sales up 13.7% and organic sales growing 5.3%, boosted by an 8.4% favorable foreign-exchange impact.
Asia Pacific organic sales grew 5.2%, and Hill's Pet Nutrition posted a 2.1% organic sales gain despite a 1.8% volume decline tied to the company's exit from private-label pet food.
Tariffs cloud the back half
Colgate upgraded its adjusted earnings per share guidance to mid-single-digit growth, up from a prior low- to mid-single-digit range, and now expects gross profit margin to be roughly flat rather than down.
But the company warned that new 10% and 12.5% tariffs imposed by the Trump administration are expected to more than offset tariff refunds received in the second quarter.
Gross profit margin expanded 140 basis points year over year to 61.5%, and the company boosted advertising spending 15% as it pushes a premium, science-led innovation strategy heading into the back half.
Colgate held a 41.3% year-to-date share of the global toothpaste market and a 32.7% share of the worldwide manual toothbrush market.
"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."
Noel Wallace, Colgate-Palmolive
Rival Procter & Gamble recently forecast slower revenue growth in fiscal 2027 after quarterly sales missed estimates and margins fell under what it called a "very challenging geopolitical and economic environment."
Colgate's shares fell despite the earnings beat, reflecting investor concern over North America weakness and the tariff outlook heading into the second half of 2026.
