Colgate-Palmolive Company (CL) Q1 2026 earnings summary

Executive summary

• Net sales rose 8.4% year-over-year to $5,324 million in Q1 2026, with organic sales up 2.9% and notable volume growth in Asia Pacific and emerging markets, despite a 0.6% drag from the exit of private label pet food.

• GAAP EPS declined 6% to $0.80, while Base Business (non-GAAP) EPS increased 7% to $0.97; adjusted EPS growth was supported by innovation and cost-saving initiatives.

• Gross profit margin decreased 20 basis points year-over-year to 60.6% due to higher raw material and logistics costs.

• Free cash flow increased 28% year-over-year to $747 million, enabling $0.7 billion returned to shareholders via dividends and share repurchases.

• The Strategic Growth and Productivity Program (SGPP) was expanded, with cumulative pretax charges now estimated at $350–$550 million and annual savings projected at $200–$300 million.

Financial highlights

• Net sales reached $5.3 billion, up 8.4% versus Q1 2025, with organic sales up 2.9% and volume up 1.1%; foreign exchange contributed a 5.1% benefit.

• Operating profit (GAAP) fell 10% to $964 million due to $176 million in restructuring charges; Base Business operating profit rose 4% to $1,134 million.

• Free cash flow before dividends increased to $609 million from $476 million year-over-year.

• Advertising spending increased to $734 million, up 10% year-over-year and as a percentage of net sales.

• Net income attributable to shareholders was $646 million, down from $690 million a year ago.

Outlook and guidance

• Full-year 2026 net sales expected to grow 2%–6%, with organic sales growth forecast at 1%–4% and a low-single-digit FX benefit.

• Gross profit margin now expected to decline year-over-year due to higher input costs.

• Double-digit GAAP EPS growth and low to mid-single-digit Base Business EPS growth anticipated.

• Advertising spend projected to increase both in dollars and as a percentage of net sales.

• Tax rate expected between 23.0% and 24.0% for the full year.