Colgate-Palmolive Co (NYSE:CL) Reports Mixed Q3 2025 Results Amid Margin Pressure

Colgate-Palmolive Co (NYSE:CL) Reports Mixed Q3 2025 Results Amid Margin Pressure

Earnings and Revenue Performance

Colgate-Palmolive Co (NYSE:CL) delivered third-quarter results that presented a complex picture for investors, missing revenue expectations while meeting adjusted earnings estimates. The consumer goods giant reported net sales of $5.13 billion, representing a 2.0% increase year-over-year but falling short of analyst estimates of $5.28 billion. The company's organic sales growth was more modest at 0.4%, which included a 0.8% negative impact from the company's exit from the private label pet sales business.

On the earnings front, the company reported both GAAP and Base Business (non-GAAP) earnings per share of $0.91, essentially matching the analyst consensus estimate of $0.915. This represents a 1% increase in GAAP EPS compared to the prior year period, while Base Business EPS remained flat.

Market Reaction and Price Action

The market response to these mixed results has been cautiously positive in early trading, with the stock showing a pre-market gain of approximately 0.42%. This modest upward movement suggests investors may be focusing on the earnings beat and the company's maintained full-year EPS guidance rather than the revenue miss. However, the stock's recent performance reveals underlying concerns, with declines of 2.5% over the past week and 2.3% over the past month, indicating some investor apprehension leading into the earnings release.

Key Financial Metrics and Challenges

The quarter revealed several important financial developments:

• Gross profit margin decreased 170 basis points to 59.4% on a GAAP basis
• Base Business gross profit margin declined 190 basis points to 59.4%
• Operating profit decreased 1% to $1.06 billion
• Operating profit margin contracted 60 basis points to 20.6%
• Net cash provided by operations was $2.75 billion for the first nine months of 2025

The margin compression reflects the ongoing cost pressures facing the consumer staples sector, even as the company continues to maintain strong market positions in its core categories.

Divisional Performance and Geographic Trends

The company's performance varied significantly across its global divisions:

• North America (19% of sales): Net sales declined 0.4% with organic sales down 0.5%
• Latin America (23% of sales): Net sales increased 2.0% with organic sales up 1.7%
• Europe (16% of sales): Net sales surged 7.6% primarily due to foreign exchange benefits, while organic sales grew 1.2%
• Asia Pacific (14% of sales): Net sales declined 1.5% with organic sales down 1.0%
• Hill's Pet Nutrition (22% of sales): Net sales increased 1.4% but organic sales declined 1.3%

Updated Guidance and Strategic Positioning

The company revised its full-year 2025 guidance, now expecting organic sales growth of 1% to 2%, down from the previous range of 2% to 4%. This adjustment includes an approximately 70 basis point impact from the exit from private label pet sales. The company maintained its expectation for earnings per share to be up low single digits.

Chairman, President and CEO Noel Wallace commented on the company's strategic direction: "As we transition to our new 2030 strategy and deploy our previously announced Strategic Growth and Productivity Program, we are well positioned to reaccelerate growth despite uncertainty in global markets and lower worldwide category growth."

Looking Ahead

For the upcoming quarter, analysts are estimating revenue of $5.31 billion and earnings per share of $0.96. The full-year 2025 consensus estimates project sales of $20.92 billion with earnings expectations that align with the company's guidance for low single-digit growth.

The company's ability to navigate current market challenges while executing its new 2030 strategy will be critical for restoring stronger growth momentum. The maintained market leadership positions—with global market share in toothpaste at 41.2% and manual toothbrushes at 32.4% year-to-date—provide a solid foundation for recovery.

For detailed earnings estimates and future projections, investors can review the earnings and estimates page for COLGATE-PALMOLIVE CO.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consult with financial advisors before making investment decisions.