Colgate-Palmolive Company (CL) Q2 2024 earnings summary

Executive summary

• Net sales rose 4.9% year-over-year to $5,058 million in Q2 2024, with organic sales up 9.0% and balanced growth across all divisions and categories, driven by both volume and pricing improvements.

• Net income attributable to Colgate-Palmolive increased to $731 million from $502 million in Q2 2023; diluted EPS rose to $0.89 from $0.60, with Base Business EPS up 18% to $0.91.

• Gross profit margin expanded to 60.6% (GAAP), up 280–300 bps year-over-year, reflecting cost savings and higher pricing.

• Innovation, targeted marketing, and enhanced capabilities, including AI, have increased brand health and household penetration.

• Maintained global market leadership in toothpaste (41.5% share) and manual toothbrushes (32.2% share) year-to-date.

Financial highlights

• Operating profit increased 12% to $1,092 million; operating margin rose to 21.6% (GAAP), with Base Business operating profit up 13% to $1,118 million.

• Cash flow from operations increased 15% to $1,671 million for the first six months of 2024; free cash flow before dividends was $1,428 million.

• Dividend per share increased to $0.50 in Q2 2024; $989 million in treasury shares repurchased in H1 2024.

• Every operating division delivered positive volume growth in the quarter, with Latin America leading organic growth at 18.8%.

• Advertising spend increased 18% versus Q2 2023, marking six consecutive quarters of double-digit growth.

Outlook and guidance

• Full-year 2024 net sales growth expected at 2% to 5%, including a mid-single-digit negative FX impact; organic sales growth guidance raised to 6%–8%.

• Expects continued gross margin expansion, increased advertising investment, and double-digit EPS growth (GAAP and Base Business); Base Business EPS growth guidance increased to 8%–11%.

• Management expects continued macroeconomic and market challenges, including inflation, high interest rates, and FX volatility.

• Continued investment in innovation and marketing to sustain momentum into 2025.

• Further pricing actions may impact consumer demand and product mix; category growth rates expected to remain volatile.