Colgate-Palmolive Company (CL) Q4 2025 earnings summary

Executive summary

• Achieved stronger-than-expected Q4 and 2025 results, with net sales up 1.4% to $20.4B and organic sales up 1.4%, despite lower category growth, raw material inflation, and a 0.7% negative impact from private label pet food exit.

• Base Business EPS increased 3% to $3.69, while GAAP EPS declined 25% to $2.63 due to a $794M impairment charge in the skin health business.

• Exited the year with improved momentum: organic sales growth in all four categories in Q4 and sequential improvement in most divisions.

• Transitioned from the 2025 strategy, which added $5B in sales, to a new 2030 strategy focused on brand strength, innovation, omni-channel demand generation, digital/data/AI investments, supply chain optimization, and culture.

• Launched the Strategic Growth and Productivity Program (SGPP) to unlock organizational changes and funding for the new strategy.

Financial highlights

• Fourth quarter net sales rose 5.8% year-over-year to $5.2B, with organic sales up 2.2%.

• Hill's segment posted over 5% organic sales growth (ex-private label) and positive volume growth.

• Emerging markets grew 4.5% organically in Q4, with strong performance in Latin America (high single-digit growth in Mexico and Brazil).

• Record operating cash flow of $4.2B and free cash flow of $3.63B in 2025; $2.9B returned to shareholders via dividends and buybacks.

• Global toothpaste market share up 10 bps and manual toothbrush share up 60 bps year-to-date.

Outlook and guidance

• 2026 net sales growth guidance set at 2%–6%, organic sales growth at 1%–4%, with a low-single-digit positive FX impact and a 20 bps drag from private label pet food exit.

• Gross profit margin and advertising spend expected to increase; GAAP EPS projected to rise double digits, Base Business EPS up low to mid-single digits.

• Tax rate projected at 23.0%–24.0%; interest expense expected to be flat.

• No major rebound assumed in the U.S.; trends expected to improve gradually.