Colgate-Palmolive Co Reports Robust Sales Growth and Margin Expansion in Q4 and Full Year 2023
Net and Organic Sales Growth: Both increased by 7.0% in Q4 and 8.5% for the full year.
Earnings Per Share (EPS): GAAP EPS soared by 30% to $2.77 for the full year, while Base Business EPS grew by 9% to $3.23.
Gross Profit Margin: Improved by 400 basis points to 59.6% in Q4.
Operating Cash Flow: Net cash provided by operations jumped 47% to $3,745 million for the full year.
Market Leadership: Colgate continues to lead with a global market share of 41.1% in toothpaste and 31.5% in manual toothbrushes.
2024 Outlook: Expects net sales growth of 1% to 4% and organic sales growth within the 3% to 5% target range.
On January 26, 2024, Colgate-Palmolive Co (NYSE:CL) released its 8-K filing, announcing its fourth quarter and full year 2023 results. The company, a global leader in consumer products known for its oral care, personal care, home care, and pet nutrition products, has reported a significant increase in both net and organic sales, with a notable rise in earnings per share (EPS).
For the full year, Colgate-Palmolive achieved an 8.5% increase in net and organic sales, with growth in every division and all four categories. This marks the fifth consecutive year the company has met or exceeded its 3% to 5% organic sales growth target. The strong sales performance, coupled with a commitment to productivity and efficiency, has led to increases across key financial metrics, including gross profit, operating profit, and free cash flow.
Financial Highlights and Divisional Performance
Colgate-Palmolive's GAAP EPS for the full year increased by 30% to $2.77, reflecting the impact of lapping goodwill and intangible assets impairment charges from the fourth quarter of 2022. The Base Business EPS, which provides a view of the company's performance excluding certain items, grew by 9% to $3.23.
The fourth quarter saw net and organic sales both increase by 7.0%, with the GAAP gross profit margin and Base Business gross profit margin climbing by 400 basis points to 59.6%. The company's leadership in the toothpaste and manual toothbrush markets remains strong, with global market shares of 41.1% and 31.5%, respectively.
Divisionally, Latin America led with an 18.0% increase in net sales, followed by Europe and North America with 10.0% and 3.5% increases, respectively. The company's pet nutrition segment, Hill's, also saw a 5.0% increase in net sales.
Looking Ahead to 2024
For the full year 2024, Colgate-Palmolive expects net sales growth to be between 1% and 4%, including a low-single-digit negative impact from foreign exchange. Organic sales growth is anticipated to be within the long-term targeted range of 3% to 5%. The company projects gross profit margin expansion, increased advertising investment, and double-digit earnings-per-share growth on a GAAP basis, with mid to high-single-digit growth on a non-GAAP (Base Business) basis.
Colgate-Palmolive's strong performance in 2023 sets a positive tone for the upcoming year. The company's focus on innovation, digital capabilities, and brand investment, alongside its robust growth momentum, positions it well for continued success in 2024 and beyond.
For a detailed analysis of Colgate-Palmolive's financial performance and divisional highlights, investors and interested parties are encouraged to review the full earnings release and accompanying financial tables.
Investors looking for more information can access Colgate-Palmolive's prepared materials and webcast regarding the Q4 and full year 2023 results on the company's website.
Colgate-Palmolive's annual meeting of stockholders is scheduled for May 10, 2024.
For further insights and analysis on Colgate-Palmolive's earnings and what they mean for investors, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Colgate-Palmolive Co for further details.
This article first appeared on GuruFocus.
