Colgate-Palmolive's earnings top estimates after consumer-goods company again raises prices

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Colgate has repeatedly raised prices in the current inflationary environment to boost margins

Consumer-goods giant Colgate-Palmolive Co. posted better-than-expected third-quarter earnings early Friday, as it again raised prices by an average of 9.5% globally.

Colgate posted net income of $708 million, or 86 cents a share, for the quarter, up from $618 million, or 74 cents a share, in the year-earlier period.Sales rose to $4.915 billion from $4.455 billion a year ago, above the $4.814 billion FactSet consensus.The company said its base business gross profit margin rose 140 basis points to 58.6%, and was up 190 bps, excluding a negative 50 bps impact from private label sales stemming from the previously disclosed acquisitions of its pet food business.

“This was our third quarter of sequential improvement in gross profit margin and our second quarter in a row delivering double-digit operating profit growth along with a double-digit increase in advertising spending,” Chief Executive Noel Wallace said in a statement.By geography, sales rose 3.5% in North America, where it raised prices by 7.5%. Volumes fell 4%, however. In Latin America, sales rose 20%, after it raised prices by 9.5%. Volume rose 5.5%.

The company said it now expects full-year sales to grow 6% to 8%, compared with prior guidance of 5% to 8%. It expects adjusted EPS growth in the high-single digits, up from prior guidance of the high end of mid-single digits.

 

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