TLDR
- Q1 sales fell 3% but beat estimates.
- Non-GAAP EPS of $0.91 exceeded forecasts.
- $5 billion share buyback announced.
- Tariffs are expected to impact 2025 by $200 million.
- FY25 guidance raised slightly for organic sales growth.
Colgate-Palmolive (NYSE: CL) stock closed at $93.91 on April 25, 2025, gaining 1.31% for the day. Investors welcomed the company’s Q1 earnings report, which beat Wall Street expectations despite lower year-over-year sales. Earnings for the first quarter came as tariffs and weaker consumer demand presented hurdles.
The company’s next earnings date is set between July 24 and July 28, 2025. Colgate-Palmolive also maintains a forward dividend of $2.08 per share with a 2.21% yield. Analysts project a 1-year target estimate of $98.32, suggesting modest upside from current levels.
Solid Financials Amid Market Volatility
Colgate-Palmolive reported first-quarter FY25 sales of $4.91 billion, a 3% drop year-over-year, but still ahead of the $4.86 billion consensus. Organic sales rose by 1.4%, supported by a 6.8% jump in Total Oral, Personal, and Home Care net sales.
Gross profit reached $2.98 billion, with the margin expanding 80 basis points to 60.8%. Operating income rose 2.8% to $1.07 billion, and operating margins improved by 120 basis points to 21.9%. Non-GAAP EPS of $0.91 beat the $0.86 analyst consensus.
Colgate ended the quarter with $1.11 billion in cash and equivalents and operating cash flow of $600 million. This strong financial position supports the company’s ongoing $5 billion share buyback program.
Tariff and Demand Challenges Persist
Tariff-related costs remain a major hurdle for 2025, with a $200 million incremental impact expected compared to earlier forecasts. CEO Noel Wallace emphasized that while uncertainty persists, Colgate’s strategic execution and flexibility should help navigate these pressures.
There was some evidence of trading down from premium to mid-tier products in North America, reflecting increased consumer price sensitivity. Meanwhile, the company’s exit from private label production could weigh on near-term volume growth.
Raised Outlook for FY25
Despite challenges, Colgate-Palmolive raised its guidance for 2025. It now expects low single-digit net sales growth, including a slight drag from foreign exchange. Organic sales are forecasted to rise between 2% and 4%, improving from previous flat expectations.
The company expects gross profit margin and advertising expenses to stay roughly flat as a percentage of sales. Earnings per share are projected to rise in the low single digits on a non-GAAP basis.
Performance Overview
Year-to-date, Colgate-Palmolive stock is up 4.47%, outperforming the S&P 500’s 6.06% decline. Over a five-year span, CL has delivered a 47.77% return, though it lags the S&P 500’s 94.77% increase.
Despite sales declines, Colgate-Palmolive’s profitability and upgraded outlook reinforce its resilience. The company’s ability to adapt through core innovation, strategic investments, and cash flow generation suggests long-term strength even amid macroeconomic headwinds.
