Colgate-Palmolive Company (CL) Goldman Sachs Global Staples Forum summary

Macro environment and consumer trends

• Expectations for 2025 have shifted due to ongoing macro volatility, including tariffs and policy changes impacting consumer spending behavior.

• All 12 U.S. categories decelerated in February, driven by lower volume, though pricing remained stable.

• Sequential improvement in consumption was seen in April, but levels remain below historical trends.

• Q2 is expected to remain challenging, leading to a downward revision of the annual organic sales growth forecast.

Strategic focus and growth drivers

• Emphasis on consumer-centric, science-led innovation and maintaining brand freshness to drive market share and pricing growth.

• Investment in digital, data analytics, and AI is a key priority to scale capabilities and support growth.

• Hill’s Pet Nutrition is a central growth area, leveraging professional endorsements and innovation.

• M&A is used selectively to align with strategic direction, as seen with the acquisition of Prime100 in Australia.

Hill’s Pet Nutrition: Performance and opportunities

• Segment margins have recovered, with a 500 basis point expansion in Q1 and further improvement expected.

• Media and communication investments have doubled since 2019, driving awareness and penetration.

• Innovation, such as the Science Diet relaunch and new prescription diets, is a major growth engine.

• Supply chain improvements and increased in-house production have enhanced service and margins.

• Household penetration remains low, presenting significant upside in a large pet-owning market.