Colgate-Palmolive (NYSE:CL) has reported robust quarterly earnings, exceeding consensus expectations and signaling plans for enhanced advertising investment in 2024. The consumer products giant’s shares experienced a premarket boost following the announcement.
Financial Highlights
For the fourth quarter, Colgate-Palmolive revealed earnings of $0.87 per share, surpassing the analyst estimate of $0.85 by $0.02. Additionally, the company reported quarterly revenue of $4.95 billion, marking a significant 7% YoY increase and surpassing the consensus estimate of $4.89 billion.
The full-year results for 2023 showcased an 8.5% YoY growth in net sales and an annual EPS of $2.77.
CEO’s Perspective
Noel Wallace, CEO of Colgate-Palmolive, expressed satisfaction with the company’s performance, highlighting strong top and bottom-line results. He emphasized the achievement of 7.0% net and organic sales growth, improved organic volume performance, expanded gross and operating profit margins, and double-digit earnings per share growth.
Outlook for 2024
Looking ahead to 2024, Colgate-Palmolive projects net sales growth in the range of 1% to 4%, accounting for a low-single-digit negative impact from foreign exchange. The company anticipates organic sales growth to stay within its long-term targeted range of 3% to 5%.
Noteworthy in the guidance for 2024 is the expectation of gross profit margin expansion, a commitment to increased advertising investment, and the prospect of achieving double-digit earnings-per-share growth.
Analysts’ Reaction
Analysts at Jefferies responded to the report, noting that Colgate-Palmolive concluded the year on a strong note, with fourth-quarter organic sales and margins outperforming estimates. The analysts acknowledged sequential improvements in volumes and gains in oral care market share, indicating the success of the company’s multi-year turnaround plan.
Jefferies analysts also pointed out Colgate-Palmolive’s intention to boost advertising spending by 19% in 2023, interpreting this move as a proactive strategy. They expressed confidence in the initial guidance for 2024, considering it aligns with expectations and offers room for surpassing estimates.
In summary, Colgate-Palmolive’s impressive financial performance and strategic initiatives have garnered positive responses from both investors and analysts, positioning the company well for the challenges and opportunities ahead in 2024.
