CL · Colgate-Palmolive Company

Colgate-Palmolive delivered a strong Q1 2026 start with net sales rising 8.4% to $5,324 million, driven by 5.1% FX tailwinds, 2.2% pricing, and 1.1% volume growth, though organic sales grew more modestly at 2.9% amid a 0.6% drag from lower private label pet food sales. Growth was broad-based across categories and four of five divisions, with Latin America leading at +5.4% organic and Europe, Middle East & Africa at +3.5%, while North America declined -2.2%. CEO Noel Wallace highlighted resilience in a tough environment, with sequential gross margin improvement versus Q4 2025, year-over-year increases in operating profit, net income, EPS, and free cash flow, plus higher advertising spend. GAAP gross margin dipped 20 bps to 60.6%, pressured by input costs and mix, reflected in updated FY2026 guidance now expecting margins down on both bases versus prior up outlook, though ad spend rises in dollars and as % of sales. Base Business EPS rose 7% to $0.97, excluding SGPP and other charges. Separately, the Board expanded the Strategic Growth and Productivity Program (approved July 31, 2025) on April 30, 2026, to further align operations with 2030 strategy via organizational simplification, supply chain optimization, and overhead reduction. Cumulative pre-tax charges now $350-550 million (up from $200-300 million), with 70-80% employee costs (severance), 20-30% asset/other, 80-90% cash, across regions (e.g., 25-30% EMEA, 20-25% Corporate), all by 2028 end. Projected annual savings $200-300 million once fully implemented support long-term growth. Guidance holds net sales +2-6% (low-single FX help), organic +1-4%, double-digit GAAP EPS growth, low-mid single-digit Base Business EPS. Toothpaste share steady at 41.1%, manual toothbrushes 32.6% YTD. Operating cash flow robust at $747 million.