Colgate-Palmolive confirmed its annual sales outlook on Friday after reporting a rise in quarterly net sales, yet its shares fell 2.5% as the company continues to face subdued demand in North America.
Higher food and fuel costs tied to the Middle East conflict have placed particular strain on lower-income consumers, the company said, making it harder for U.S. consumer goods makers to attract purchases across both low-cost and premium product tiers.
For the quarter ended June 30, Colgate-Palmolive recorded net sales of $5.36 billion, a 4.9% increase from the year-ago period. That result matched analysts' expectations based on data compiled by LSEG.
However, the company reported that North America organic sales fell 3% during the period, driven by a 3.9% decline in volumes. Colgate cited slower category growth, market share losses, heightened competition and inventory reductions at key retailers as contributors to the regional weakness.
On the profitability front, adjusted earnings per share came in at $0.99, beating analysts' consensus of $0.95.
Despite the regional headwinds, Colgate-Palmolive said it still expects full-year net sales to rise between 2% and 6%. The company also raised the baseline for its 2026 adjusted earnings outlook to mid-single-digit growth, up from a prior baseline described as low- to mid-single-digit growth.
Colgate cautioned, however, that new tariff actions from the U.S. administration - specifically 10% and 12.5% tariffs - will present additional challenges. The company warned those tariffs are expected to more than offset the benefit of tariff refunds it received in the second quarter.
The report also referenced sector-wide pressures. Rival Procter & Gamble earlier forecast slower revenue growth in fiscal 2027 after reporting quarterly sales that missed estimates and margins that the company said fell under a "very challenging geopolitical and economic environment."
Context and implications
- Colgate's consolidated sales gain masks weakening U.S. volumes and market-share erosion in the North American personal-care category.
- Tariff changes are expected to create a net headwind in coming periods, offsetting recent one-time tariff refunds.
- Higher grocery and energy prices tied to geopolitical developments are weighing on lower-income shoppers, affecting demand across price points.