© Bloomberg
Colgate-Palmolive has raised its full-year guidance as it vowed to pass on higher raw material and logistics costs by further raising prices for its products.
The consumer goods group, whose brands include Speed Stick deodorant and Softsoap, raised its full-year organic sales growth guidance by 1 percentage point to between 5 and 7 percent, but maintained its forecast for net sales growth in the range 1 to 4 percent.
The toothpaste maker reported net sales rose 5.5 percent in the second quarter to $4.48 billion, above analysts’ estimates of $4.35 billion, according to a Refinitiv survey, and up 5.5 percent year over year. Organic sales rose 9 percent, with growth in every sector.
Colgate reported an increase in costs for raw materials, packaging and logistics in the quarter, as well as a 3.5 percent negative impact on its net sales from volatile currencies.
“We acted boldly on awards and are accelerating our plans to manage revenue growth, including additional awards, over the balance of the year,” chief executive Noel Wallace said in a statement.
In a call with analysts, he said price increases would be “broad-based around the world” in the second half.
“It’s an unpredictable environment in terms of where we see consumers evolve, where we see inflation evolve,” he said. “But the good news is that we’ve got the awards and we’ve got more awards planned around the world going into the back half.”
The New York-based company reported diluted earnings of 72 cents per share, beating forecasts of 71 cents.
Colgate is the latest consumer goods company to pass on higher inflationary costs to its customers, following moves by Nestlé, Kraft Heinz, Danone and Unilever.
