Colgate-Palmolive’s second quarter results were characterized by modest year-on-year growth, as the company navigated a challenging operating environment marked by persistent raw material inflation and category volatility. Management attributed the quarter’s performance to improved revenue growth management, resilient performance in core brands, and innovation across product categories. CEO Noel Wallace highlighted the importance of “broad-based strength across geographies, categories and price tiers,” while acknowledging the impact of cautious consumer behavior, particularly in North America and certain international markets. The company also pointed to ongoing investments in product innovation and digital capabilities as central to sustaining competitiveness.
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Colgate-Palmolive (CL) Q2 CY2025 Highlights:
- Revenue: $5.11 billion vs analyst estimates of $5.03 billion (1% year-on-year growth, 1.5% beat)
- Adjusted EPS: $0.92 vs analyst estimates of $0.89 (2.8% beat)
- Adjusted EBITDA: $1.24 billion vs analyst estimates of $1.22 billion (24.3% margin, 1.4% beat)
- Operating Margin: 21.1%, in line with the same quarter last year
- Organic Revenue rose 1.8% year on year vs analyst estimates of 1.6% growth (18.9 basis point beat)
- Sales Volumes were flat year on year (4.7% in the same quarter last year)
- Market Capitalization: $68.67 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Colgate-Palmolive’s Q2 Earnings Call
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Dara Mohsenian (Morgan Stanley) asked about the new restructuring program’s operational focus and savings, to which CEO Noel Wallace and CFO Stan Sutula explained the initiative targets capability building, innovation, and supply chain optimization over three years, with savings expected to resemble prior programs.
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Robert Ottenstein (Evercore ISI) inquired about the global rollout of Colgate Total and category volatility in Latin America, with Wallace noting strong early results from the relaunch and acknowledging near-term cautiousness, especially in Brazil, due to food inflation.
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Andrea Teixeira (JPMorgan) sought clarity on the timing and P&L impact of the productivity initiative, and on European performance. Sutula stated most effects will materialize over the next three years and Wallace cited positive pricing but consumer caution in Europe.
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Filippo Falorni (Citi) questioned the gross margin outlook amid shifting tariffs and raw material costs, with Sutula attributing margin stability to offsetting lower tariffs and higher input costs, mainly from palm and vegetable oils.
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Peter Galbo (Bank of America) asked about Hill’s Pet Nutrition’s continued outperformance and the effects of exiting private label production, with Wallace crediting innovation and strategic focus, and Sutula detailing the phased reduction in private label’s impact on results.
Catalysts in Upcoming Quarters
In the upcoming quarters, the StockStory team will closely monitor (1) the execution and realized savings from the new productivity initiative, (2) the effectiveness of recent product and brand relaunches, especially Colgate Total and Hill’s, in driving market share, and (3) the company’s ability to manage input cost inflation while maintaining or improving margins. Progress in digital transformation and omnichannel execution will also be key markers of strategic success.
Colgate-Palmolive currently trades at $85, up from $83.89 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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