Colgate-Palmolive Company Announces 2nd Quarter 2025 Results
- Net sales increased 1.0%; Organic sales* increased 1.8%, including a 0.6% negative impact from lower private label pet sales
-
GAAP EPS increased 2% to
$0.91 ; Base Business EPS* increased 1% to$0.92 - GAAP Gross profit margin decreased 50 basis points to 60.1%; Base Business Gross profit margin* decreased 70 basis points to 60.1%
-
Net cash provided by operations was
$1,484 million for the first six months of 2025 - The Company’s leadership in toothpaste continued with its global market share at 41.1% year to date
- The Company’s leadership in manual toothbrushes continued with its global market share at 32.4% year to date
- The Company updated its organic sales growth guidance for full year 2025
Second Quarter Total Company Results (GAAP) |
|||
($ in millions except per share amounts) |
2025 |
2024 |
Change |
|
|
|
+1.0% |
EPS (diluted) |
|
|
+2% |
|
|
|
|
|
|
|
|
Second Quarter Total Company Results (Base Business - Non-GAAP)* |
|||
|
2025 |
2024 |
Change |
Organic Sales Growth |
+1.8% |
||
Base Business EPS (diluted) |
|
|
+1% |
*Indicates a non-GAAP financial measure. Please refer to “Non-GAAP Financial Measures” later in this release for definitions of non-GAAP financial measures and to “Table 6 - Geographic Sales Analysis Percentage Changes” and “Table 8 - Non-GAAP Reconciliations” included with this release for a reconciliation of these non-GAAP financial measures to the related GAAP measures. |
“We feel we are well positioned to deal with the year-to-date volatility in category growth and uncertainty in global markets. Guided by our strategic framework, including our focus on innovation and the strength of our global portfolio, our teams on the ground continue to execute with excellence and focus to achieve our 2025 financial targets.”
Separately, the Company today announced a new three-year productivity program to drive future growth and support the Company’s 2030 strategy. The program includes initiatives to better align the Company’s organizational structure to support its strategic initiatives, optimize the Company’s global supply chain to drive agility and efficiencies and simplify and streamline its organizational structure to reduce overhead costs. The productivity program is projected to result in cumulative pre-tax charges, once all initiatives are approved and implemented, totaling between
Full Year 2025 Guidance
Based on current spot rates and including the estimated impact of tariffs announced and finalized as of
- The Company still expects net sales to be up low single digits, now including a flat to low-single-digit negative impact from foreign exchange.
- The Company now expects organic sales growth to be at the low end of 2% to 4%, including the impact over the course of 2025 of the planned exit from private label pet sales.
- On a GAAP basis, the Company still expects both gross profit margin and advertising investment to be roughly flat as a percentage of net sales, and earnings per share to be up low single digits.
- On a non-GAAP (Base Business) basis, the Company still expects both gross profit margin and advertising to be roughly flat as a percentage of net sales, and earnings per share to be up low single digits.
Divisional Performance
See attached "Table 6 - Geographic Sales Analysis Percentage Changes" and "Table 5 - Segment Information" for additional information on net sales and operating profit by division.
Second Quarter Sales Growth By Division (% change 2Q 2025 vs. 2Q 2024 except % of Total Company Sales) |
|
|
|
||||
|
% of Total
|
Net
|
Organic
|
As
|
Organic
|
Pricing |
FX |
|
20% |
-1.0% |
-0.9% |
-0.4% |
-0.4% |
-0.5% |
-0.1% |
|
24% |
-4.8% |
+3.4% |
+0.4% |
+0.4% |
+3.0% |
-8.2% |
|
14% |
+7.8% |
+2.0% |
-0.2% |
-0.2% |
+2.2% |
+5.7% |
|
13% |
+0.8% |
—% |
-1.6% |
-1.6% |
+1.6% |
+0.9% |
|
6% |
+8.0% |
+7.7% |
+4.3% |
+4.3% |
+3.4% |
+0.2% |
Hill’s |
23% |
+3.8% |
+2.0% |
+0.1% |
-0.9% |
+2.9% |
+0.8% |
|
|
|
|
|
|
|
|
|
100% |
+1.0% |
+1.8% |
—% |
-0.2% |
+2.0% |
-1.0% |
Note: Table may not sum due to rounding. |
(1) The Company has recast its historical geographic segment information to conform to the reporting structure effective as of |
*Indicates a non-GAAP financial measure. Please refer to “Non-GAAP Financial Measures” later in this release for definitions of non-GAAP financial measures and to “Table 6 - Geographic Sales Analysis Percentage Changes” included with this release for a reconciliation of these non-GAAP financial measures to the related GAAP measures. |
**The impact of the acquisition of the Prime100 pet food business on as reported volume was 1.0% and 0.2% for Hill's |
Second Quarter Operating Profit By Division ($ in millions) |
|
|||
|
2Q 2025 |
% Change vs
|
% to Net
|
Change in basis
|
|
|
-9% |
18.9% |
-170 |
|
|
-12% |
30.4% |
-250 |
|
|
9% |
25.0% |
+40 |
|
|
-4% |
27.2% |
-150 |
|
|
1% |
22.0% |
-140 |
Hill’s |
|
13% |
22.9% |
+180 |
|
|
|
|
|
|
|
-1% |
21.1% |
-50 |
|
|
-3% |
21.3% |
-80 |
(1) The Company has recast its historical geographic segment information to conform to the reporting structure effective as of |
*Indicates a non-GAAP financial measure. Please refer to “Non-GAAP Financial Measures” later in this release for definitions of non-GAAP financial measures and to “Table 8 - Non-GAAP Reconciliations” included with this release for a reconciliation of these non-GAAP financial measures to the related GAAP measures. |
Prepared Materials and Webcast Information
At approximately
At
About
Market Share Information
Management uses market share information as a key indicator to monitor business health and performance. References to market share in this press release are based on a combination of consumption and market share data provided by third-party vendors, primarily Nielsen, and internal estimates. All market share references represent the percentage of the dollar value of sales of our products, relative to all product sales in the category in the countries in which the Company competes and purchases data (excluding
Market share data is subject to limitations on the availability of up-to-date information. In particular, market share data is currently not generally available for certain retail channels, such as eCommerce and certain club retailers and discounters. The Company measures year-to-date market shares from
Cautionary Statement on Forward-Looking Statements
This press release and the related webcast may contain forward-looking statements (as that term is defined in the
Non-GAAP Financial Measures
The following provides definitions and other information regarding the non-GAAP financial measures used in this press release and the related prepared materials and webcast, which may not be the same as or comparable to similar measures presented by other companies:
- Base Business: Base Business refers to non-GAAP measures of operating results that exclude certain items. Base Business operating results exclude, as applicable, charges resulting from the ERISA litigation matter and the 2022 Global Productivity Initiative and acquisition-related costs.
- Organic sales growth: Net sales growth excluding the impact of foreign exchange, acquisitions and divestments.
- Free cash flow before dividends: Net cash provided by operations less Capital expenditures.
This press release discusses Net sales growth (GAAP) and Organic sales growth (non-GAAP). Management believes the organic sales growth measure provides investors and analysts with useful supplemental information regarding the Company’s underlying sales trends by presenting sales growth excluding the external factor of foreign exchange as well as the impact from acquisitions and divestments. See “Geographic Sales Analysis Percentage Changes” for the three and six months ended
Gross profit, Gross profit margin, Selling, general and administrative expenses, Selling, general and administrative expenses as a percentage of Net sales, Other (income) expense, net, Operating profit, Operating profit margin, Non-service related postretirement costs, Effective income tax rate, Net income attributable to
The Company uses these financial measures internally in its budgeting process, to evaluate segment and overall operating performance and as factors in determining compensation. While the Company believes that these financial measures are useful in evaluating the Company’s underlying business performance and trends, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP.
As management uses free cash flow before dividends to evaluate the Company’s ability to satisfy current and future obligations, pay dividends, fund future business opportunities and repurchase stock, the Company believes that it provides useful information to investors. Free cash flow before dividends is not a measure of cash available for discretionary expenditures since the Company has certain non-discretionary obligations such as debt service that are not deducted from the measure. See “Condensed Consolidated Statements of Cash Flows” for the six months ended
(See attached tables for second quarter results.)
|
|
|
|
Table 1 |
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|
||||||||
|
||||||||
Condensed Consolidated Statements of Income |
||||||||
|
||||||||
For the Three Months Ended |
||||||||
|
||||||||
(Dollars in Millions Except Per Share Amounts) (Unaudited) |
||||||||
|
||||||||
|
|
2025 |
|
2024 |
||||
|
|
|
|
|
||||
Net sales |
|
$ |
5,110 |
|
|
$ |
5,058 |
|
|
|
|
|
|
||||
Cost of sales |
|
|
2,041 |
|
|
|
1,992 |
|
|
|
|
|
|
||||
Gross profit |
|
|
3,069 |
|
|
|
3,066 |
|
|
|
|
|
|
||||
Gross profit margin |
|
|
60.1 |
% |
|
|
60.6 |
% |
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
|
1,963 |
|
|
|
1,939 |
|
|
|
|
|
|
||||
Other (income) expense, net |
|
|
26 |
|
|
|
35 |
|
|
|
|
|
|
||||
Operating profit |
|
|
1,080 |
|
|
|
1,092 |
|
|
|
|
|
|
||||
Operating profit margin |
|
|
21.1 |
% |
|
|
21.6 |
% |
|
|
|
|
|
||||
Non-service related postretirement costs |
|
|
23 |
|
|
|
22 |
|
|
|
|
|
|
||||
Interest expense |
|
|
71 |
|
|
|
78 |
|
|
|
|
|
|
||||
Interest income |
|
|
21 |
|
|
|
18 |
|
|
|
|
|
|
||||
Income before income taxes |
|
|
1,007 |
|
|
|
1,010 |
|
|
|
|
|
|
||||
Provision for income taxes |
|
|
234 |
|
|
|
243 |
|
|
|
|
|
|
||||
Effective tax rate |
|
|
23.2 |
% |
|
|
24.1 |
% |
|
|
|
|
|
||||
Net income including noncontrolling interests |
|
|
773 |
|
|
|
767 |
|
|
|
|
|
|
||||
Less: Net income attributable to noncontrolling interests |
|
|
30 |
|
|
|
36 |
|
|
|
|
|
|
||||
Net income attributable to |
|
$ |
743 |
|
|
$ |
731 |
|
|
|
|
|
|
||||
Earnings per common share |
|
|
|
|
||||
Basic |
|
$ |
0.92 |
|
|
$ |
0.89 |
|
Diluted |
|
$ |
0.91 |
|
|
$ |
0.89 |
|
|
|
|
|
|
||||
Supplemental Income Statement Information |
|
|
|
|
||||
Average common shares outstanding |
|
|
|
|
||||
Basic |
|
|
810.2 |
|
|
|
819.7 |
|
Diluted |
|
|
813.3 |
|
|
|
823.7 |
|
|
|
|
|
|
||||
Advertising |
|
$ |
678 |
|
|
$ |
706 |
|
|
|
|
|
Table 2 |
||||
|
||||||||
|
||||||||
Condensed Consolidated Statements of Income |
||||||||
|
||||||||
For the Six Months Ended |
||||||||
|
||||||||
(Dollars in Millions Except Per Share Amounts) (Unaudited) |
||||||||
|
||||||||
|
|
2025 |
|
2024 |
||||
|
|
|
|
|
||||
Net sales |
|
$ |
10,021 |
|
|
$ |
10,124 |
|
|
|
|
|
|
||||
Cost of sales |
|
|
3,965 |
|
|
|
4,019 |
|
|
|
|
|
|
||||
Gross profit |
|
|
6,056 |
|
|
|
6,105 |
|
|
|
|
|
|
||||
Gross profit margin |
|
|
60.4 |
% |
|
|
60.3 |
% |
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
|
3,861 |
|
|
|
3,855 |
|
|
|
|
|
|
||||
Other (income) expense, net |
|
|
39 |
|
|
|
111 |
|
|
|
|
|
|
||||
Operating profit |
|
|
2,156 |
|
|
|
2,139 |
|
|
|
|
|
|
||||
Operating profit margin |
|
|
21.5 |
% |
|
|
21.1 |
% |
|
|
|
|
|
||||
Non-service related postretirement costs |
|
|
95 |
|
|
|
44 |
|
|
|
|
|
|
||||
Interest expense |
|
|
137 |
|
|
|
151 |
|
|
|
|
|
|
||||
Interest income |
|
|
35 |
|
|
|
33 |
|
|
|
|
|
|
||||
Income before income taxes |
|
|
1,959 |
|
|
|
1,977 |
|
|
|
|
|
|
||||
Provision for income taxes |
|
|
460 |
|
|
|
482 |
|
|
|
|
|
|
||||
Effective tax rate |
|
|
23.5 |
% |
|
|
24.4 |
% |
|
|
|
|
|
||||
Net income including noncontrolling interests |
|
|
1,499 |
|
|
|
1,495 |
|
|
|
|
|
|
||||
Less: Net income attributable to noncontrolling interests |
|
|
66 |
|
|
|
81 |
|
|
|
|
|
|
||||
Net income attributable to |
|
$ |
1,433 |
|
|
$ |
1,414 |
|
|
|
|
|
|
||||
Earnings per common share |
|
|
|
|
||||
Basic(1) |
|
$ |
1.77 |
|
|
$ |
1.72 |
|
Diluted(1) |
|
$ |
1.76 |
|
|
$ |
1.71 |
|
|
|
|
|
|
||||
Supplemental Income Statement Information |
|
|
|
|
||||
Average common shares outstanding |
|
|
|
|
||||
Basic |
|
|
811.2 |
|
|
|
821.3 |
|
Diluted |
|
|
814.2 |
|
|
|
824.9 |
|
|
|
|
|
|
||||
Advertising |
|
$ |
1,346 |
|
|
$ |
1,378 |
|
Note: |
(1) Basic and diluted earnings per share are computed independently for each quarter and any year-to-date period presented. As a result of changes in shares outstanding during the year and rounding, the sum of the quarters' earnings per share may not equal the earnings per share for any year-to-date period. |
|
|
|
|
|
|
Table 3 |
||||||
|
||||||||||||
|
||||||||||||
Condensed Consolidated Balance Sheets |
||||||||||||
|
||||||||||||
As of |
||||||||||||
|
||||||||||||
(Dollars in Millions) (Unaudited) |
||||||||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
2025 |
|
2024 |
|
2024 |
||||||
Cash and cash equivalents |
|
$ |
1,215 |
|
|
$ |
1,096 |
|
|
$ |
1,110 |
|
Receivables, net |
|
|
1,773 |
|
|
|
1,521 |
|
|
|
1,825 |
|
Inventories |
|
|
2,120 |
|
|
|
1,987 |
|
|
|
1,922 |
|
Other current assets |
|
|
888 |
|
|
|
713 |
|
|
|
789 |
|
Property, plant and equipment, net |
|
|
4,529 |
|
|
|
4,422 |
|
|
|
4,392 |
|
|
|
|
3,696 |
|
|
|
3,272 |
|
|
|
3,320 |
|
Other intangible assets, net |
|
|
1,904 |
|
|
|
1,756 |
|
|
|
1,814 |
|
Other assets |
|
|
1,345 |
|
|
|
1,279 |
|
|
|
1,308 |
|
Total assets |
|
$ |
17,470 |
|
|
$ |
16,046 |
|
|
$ |
16,480 |
|
|
|
|
|
|
|
|
||||||
Total debt |
|
$ |
8,758 |
|
|
$ |
7,949 |
|
|
$ |
8,676 |
|
Other current liabilities |
|
|
5,161 |
|
|
|
5,099 |
|
|
|
4,820 |
|
Other non-current liabilities |
|
|
2,499 |
|
|
|
2,454 |
|
|
|
2,502 |
|
Total liabilities |
|
|
16,418 |
|
|
|
15,502 |
|
|
|
15,998 |
|
|
|
|
702 |
|
|
|
212 |
|
|
|
123 |
|
Noncontrolling interests |
|
|
350 |
|
|
|
332 |
|
|
|
359 |
|
Total liabilities and equity |
|
$ |
17,470 |
|
|
$ |
16,046 |
|
|
$ |
16,480 |
|
|
|
|
|
|
|
|
||||||
Supplemental Balance Sheet Information |
|
|
|
|
|
|
||||||
Debt less cash, cash equivalents and marketable securities(1) |
|
$ |
7,346 |
|
|
$ |
6,693 |
|
|
$ |
7,341 |
|
Working capital % of sales |
|
|
(2.9 |
)% |
|
|
(5.2 |
)% |
|
|
(2.5 |
)% |
Note: |
(1) Marketable securities of |
|
|
|
|
Table 4 |
||||
|
||||||||
|
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
|
||||||||
For the Six Months Ended |
||||||||
|
||||||||
(Dollars in Millions) (Unaudited) |
||||||||
|
|
|
|
|
||||
|
|
2025 |
|
2024 |
||||
Operating Activities |
|
|
|
|
||||
Net income including noncontrolling interests |
|
$ |
1,499 |
|
|
$ |
1,495 |
|
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operations: |
|
|
||||||
Depreciation and amortization |
|
|
299 |
|
|
|
307 |
|
ERISA litigation matter |
|
|
65 |
|
|
|
— |
|
Restructuring and termination benefits, net of cash |
|
|
(13 |
) |
|
|
48 |
|
Stock-based compensation expense |
|
|
55 |
|
|
|
43 |
|
Deferred income taxes |
|
|
(17 |
) |
|
|
(92 |
) |
Cash effects of changes in: |
|
|
|
|
||||
Receivables |
|
|
(152 |
) |
|
|
(309 |
) |
Inventories |
|
|
3 |
|
|
|
(17 |
) |
Accounts payable and other accruals |
|
|
(248 |
) |
|
|
194 |
|
Other non-current assets and liabilities |
|
|
(7 |
) |
|
|
2 |
|
Net cash provided by (used in) operations |
|
|
1,484 |
|
|
|
1,671 |
|
|
|
|
|
|
||||
Investing Activities |
|
|
|
|
||||
Capital expenditures |
|
|
(232 |
) |
|
|
(243 |
) |
Purchases of marketable securities and investments |
|
|
(384 |
) |
|
|
(243 |
) |
Proceeds from sale of marketable securities and investments |
|
|
350 |
|
|
|
178 |
|
Payment for acquisition, net of cash acquired |
|
|
(293 |
) |
|
|
— |
|
Other investing activities |
|
|
(1 |
) |
|
|
4 |
|
Net cash provided by (used in) investing activities |
|
|
(560 |
) |
|
|
(304 |
) |
|
|
|
|
|
||||
Financing Activities |
|
|
|
|
||||
Short-term borrowing (repayment) less than 90 days, net |
|
|
(30 |
) |
|
|
736 |
|
Principal payments on debt |
|
|
(139 |
) |
|
|
(500 |
) |
Proceeds from issuance of debt |
|
|
497 |
|
|
|
2 |
|
Dividends paid |
|
|
(880 |
) |
|
|
(867 |
) |
Purchases of treasury shares |
|
|
(516 |
) |
|
|
(989 |
) |
Proceeds from exercise of stock options |
|
|
65 |
|
|
|
455 |
|
Other financing activities |
|
|
136 |
|
|
|
(43 |
) |
Net cash provided by (used in) financing activities |
|
|
(867 |
) |
|
|
(1,206 |
) |
|
|
|
|
|
||||
Effect of exchange rate changes on Cash and cash equivalents |
|
|
62 |
|
|
|
(17 |
) |
Net increase (decrease) in Cash and cash equivalents |
|
|
119 |
|
|
|
144 |
|
Cash and cash equivalents at beginning of the period |
|
|
1,096 |
|
|
|
966 |
|
Cash and cash equivalents at end of the period |
|
$ |
1,215 |
|
|
$ |
1,110 |
|
|
|
|
|
|
||||
Supplemental Cash Flow Information |
|
|
|
|
||||
Free cash flow before dividends (Net cash provided by operations less Capital expenditures) |
|
|
|
|
||||
Net cash provided by operations |
|
$ |
1,484 |
|
|
$ |
1,671 |
|
Less: Capital expenditures |
|
|
(232 |
) |
|
|
(243 |
) |
Free cash flow before dividends |
|
$ |
1,252 |
|
|
$ |
1,428 |
|
|
|
|
|
|
||||
|
|
|
|
|
||||
Income taxes paid |
|
$ |
530 |
|
|
$ |
505 |
|
Interest paid |
|
$ |
137 |
|
|
$ |
161 |
|
|
|
|
|
|
|
|
|
Table 5 |
||||||||
|
||||||||||||||||
|
|
|
|
|
||||||||||||
Segment Information |
||||||||||||||||
|
|
|
|
|
||||||||||||
For the Three and Six Months Ended |
||||||||||||||||
|
|
|
|
|
||||||||||||
(Dollars in Millions) (Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Oral, Personal and Home Care |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
$ |
1,027 |
|
|
$ |
1,037 |
|
|
$ |
2,025 |
|
|
$ |
2,073 |
|
|
|
|
1,207 |
|
|
|
1,267 |
|
|
|
2,350 |
|
|
|
2,520 |
|
|
|
|
738 |
|
|
|
685 |
|
|
|
1,427 |
|
|
|
1,358 |
|
|
|
|
687 |
|
|
|
682 |
|
|
|
1,378 |
|
|
|
1,408 |
|
|
|
|
295 |
|
|
|
273 |
|
|
|
566 |
|
|
|
549 |
|
|
|
|
|
|
|
|
|
|
||||||||
Total Oral, Personal and Home Care |
|
|
3,954 |
|
|
|
3,944 |
|
|
|
7,746 |
|
|
|
7,908 |
|
|
|
|
|
|
|
|
|
|
||||||||
Pet Nutrition |
|
|
1,157 |
|
|
|
1,114 |
|
|
|
2,275 |
|
|
|
2,216 |
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
5,110 |
|
|
$ |
5,058 |
|
|
$ |
10,021 |
|
|
$ |
10,124 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||||||
Operating Profit |
|
|
|
|
|
|
|
|
||||||||
Oral, Personal and Home Care |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
$ |
194 |
|
|
$ |
213 |
|
|
$ |
390 |
|
|
$ |
427 |
|
|
|
|
367 |
|
|
|
417 |
|
|
|
715 |
|
|
|
822 |
|
|
|
|
184 |
|
|
|
169 |
|
|
|
356 |
|
|
|
321 |
|
|
|
|
187 |
|
|
|
195 |
|
|
|
385 |
|
|
|
402 |
|
|
|
|
65 |
|
|
|
64 |
|
|
|
122 |
|
|
|
130 |
|
|
|
|
|
|
|
|
|
|
||||||||
Total Oral, Personal and Home Care |
|
|
997 |
|
|
|
1,058 |
|
|
|
1,968 |
|
|
|
2,102 |
|
|
|
|
|
|
|
|
|
|
||||||||
Pet Nutrition |
|
|
264 |
|
|
|
235 |
|
|
|
523 |
|
|
|
433 |
|
Corporate(2) |
|
|
(181 |
) |
|
|
(201 |
) |
|
|
(334 |
) |
|
|
(397 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Total Operating Profit |
|
$ |
1,080 |
|
|
$ |
1,092 |
|
|
$ |
2,156 |
|
|
$ |
2,139 |
|
Note: Table may not sum due to rounding. |
|
(1) The Company has recast its historical geographic segment information to conform to the reporting structure effective as of |
|
(2) Corporate operations include costs related to stock options and restricted stock units, research and development costs, Corporate overhead costs, restructuring and related implementation charges and gains and losses on sales of non-core product lines and assets. |
Corporate Operating profit (loss) for the three months ended |
|
Corporate Operating profit (loss) for the six months ended |
|
Corporate Operating profit (loss) for the three months ended |
|
Corporate Operating profit (loss) for the six months ended |
Table 6 |
||||||||||||||||||
|
||||||||||||||||||
|
||||||||||||||||||
Geographic Sales Analysis Percentage Changes |
||||||||||||||||||
|
||||||||||||||||||
For the Three Months Ended |
||||||||||||||||||
|
||||||||||||||||||
(Unaudited) |
||||||||||||||||||
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
COMPONENTS OF SALES CHANGE |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
Pricing |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
Coupons |
|
|
||||||
|
|
Sales |
|
|
|
|
|
|
|
Consumer & |
|
|
||||||
|
|
Change |
|
Organic |
|
As Reported |
|
Organic |
|
Trade |
|
Foreign |
||||||
Region |
|
As Reported |
|
Sales Change |
|
Volume(1) |
|
Volume |
|
Incentives |
|
Exchange |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
1.0 |
% |
|
1.8 |
% |
|
— |
% |
|
(0.2 |
)% |
|
2.0 |
% |
|
(1.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
(1.0 |
)% |
|
(0.9 |
)% |
|
(0.4 |
)% |
|
(0.4 |
)% |
|
(0.5 |
)% |
|
(0.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
(4.8 |
)% |
|
3.4 |
% |
|
0.4 |
% |
|
0.4 |
% |
|
3.0 |
% |
|
(8.2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
7.8 |
% |
|
2.0 |
% |
|
(0.2 |
)% |
|
(0.2 |
)% |
|
2.2 |
% |
|
5.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
0.8 |
% |
|
— |
% |
|
(1.6 |
)% |
|
(1.6 |
)% |
|
1.6 |
% |
|
0.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
8.0 |
% |
|
7.7 |
% |
|
4.3 |
% |
|
4.3 |
% |
|
3.4 |
% |
|
0.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total CP Products |
|
0.2 |
% |
|
1.7 |
% |
|
— |
% |
|
— |
% |
|
1.7 |
% |
|
(1.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Hill’s |
|
3.8 |
% |
|
2.0 |
% |
|
0.1 |
% |
|
(0.9 |
)% |
|
2.9 |
% |
|
0.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
(1.1 |
)% |
|
2.8 |
% |
|
0.2 |
% |
|
0.2 |
% |
|
2.6 |
% |
|
(3.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Developed Markets |
|
2.8 |
% |
|
0.9 |
% |
|
(0.1 |
)% |
|
(0.5 |
)% |
|
1.4 |
% |
|
1.4 |
% |
Note: Table may not sum due to rounding. |
|
(1) The impact of the acquisition of the Prime100 pet food business on as reported volume was 0.2%, 1.0% and 0.4% for |
|
(2) The Company has recast its historical geographic segment information to conform to the reporting structure effective as of |
|
(3) |
Table 7 |
||||||||||||||||||
|
||||||||||||||||||
|
||||||||||||||||||
Geographic Sales Analysis Percentage Changes |
||||||||||||||||||
|
||||||||||||||||||
For the Six Months Ended |
||||||||||||||||||
|
||||||||||||||||||
(Unaudited) |
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
COMPONENTS OF SALES CHANGE |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
Pricing |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
Coupons |
|
|
||||||
|
|
Sales |
|
|
|
|
|
|
|
Consumer & |
|
|
||||||
|
|
Change |
|
Organic |
|
As Reported |
|
Organic |
|
Trade |
|
Foreign |
||||||
Region |
|
As Reported |
|
Sales Change |
|
Volume(1) |
|
Volume |
|
Incentives |
|
Exchange |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
(1.0 |
)% |
|
1.6 |
% |
|
— |
% |
|
(0.1 |
)% |
|
1.7 |
% |
|
(2.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
(2.3 |
)% |
|
(2.0 |
)% |
|
(1.4 |
)% |
|
(1.4 |
)% |
|
(0.6 |
)% |
|
(0.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
(6.8 |
)% |
|
3.7 |
% |
|
1.6 |
% |
|
1.6 |
% |
|
2.1 |
% |
|
(10.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
5.2 |
% |
|
3.7 |
% |
|
1.4 |
% |
|
1.4 |
% |
|
2.3 |
% |
|
1.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
(2.2 |
)% |
|
(1.6 |
)% |
|
(2.6 |
)% |
|
(2.6 |
)% |
|
1.0 |
% |
|
(0.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
3.2 |
% |
|
4.8 |
% |
|
1.0 |
% |
|
1.0 |
% |
|
3.7 |
% |
|
(1.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total CP Products |
|
(2.0 |
)% |
|
1.3 |
% |
|
— |
% |
|
— |
% |
|
1.3 |
% |
|
(3.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Hill’s |
|
2.6 |
% |
|
2.5 |
% |
|
(0.1 |
)% |
|
(0.6 |
)% |
|
3.0 |
% |
|
(0.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
(3.7 |
)% |
|
2.2 |
% |
|
0.2 |
% |
|
0.2 |
% |
|
2.0 |
% |
|
(5.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Developed Markets |
|
1.2 |
% |
|
1.0 |
% |
|
(0.2 |
)% |
|
(0.4 |
)% |
|
1.5 |
% |
|
— |
% |
Note: Table may not sum due to rounding. |
|
(1) The impact of the acquisition of the Prime100 pet food business on as reported volume was 0.1%, 0.5% and 0.2% for |
|
(2) The Company has recast its historical geographic segment information to conform to the reporting structure effective as of |
|
(3) |
Table 8 |
|||||||||||
|
|||||||||||
|
|||||||||||
Non-GAAP Reconciliations |
|||||||||||
|
|||||||||||
For the Three Months Ended |
|||||||||||
|
|||||||||||
(Dollars in Millions Except Per Share Amounts) (Unaudited) |
|||||||||||
|
|
|
|
|
|
|
|||||
Gross Profit |
|
2025 |
|
2024 |
|
|
|||||
Gross profit, GAAP |
$ |
3,069 |
|
|
$ |
3,066 |
|
|
|
||
2022 Global Productivity Initiative |
|
— |
|
|
|
9 |
|
|
|
||
Gross profit, non-GAAP |
$ |
3,069 |
|
|
$ |
3,075 |
|
|
|
||
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
Gross Profit Margin |
2025 |
|
2024 |
|
Change |
||||||
Gross profit margin, GAAP |
|
60.1 |
% |
|
|
60.6 |
% |
|
(50 |
) |
|
2022 Global Productivity Initiative |
|
— |
% |
|
|
0.2 |
% |
|
|
||
Gross profit margin, non-GAAP |
|
60.1 |
% |
|
|
60.8 |
% |
|
(70 |
) |
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Selling, General and Administrative Expenses |
2025 |
|
2024 |
|
|
||||||
Selling, general and administrative expenses, GAAP |
$ |
1,963 |
|
|
$ |
1,939 |
|
|
|
||
2022 Global Productivity Initiative |
|
|
— |
|
|
|
(2 |
) |
|
|
|
Selling, general and administrative expenses, non-GAAP |
$ |
1,963 |
|
|
$ |
1,937 |
|
|
|
||
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
Other (Income) Expense, Net |
2025 |
|
2024 |
|
|
||||||
Other (income) expense, net, GAAP |
$ |
26 |
|
|
$ |
35 |
|
|
|
||
Acquisition-related costs |
|
|
(9 |
) |
|
|
— |
|
|
|
|
2022 Global Productivity Initiative |
|
|
— |
|
|
|
(16 |
) |
|
|
|
Other (income) expense, net, non-GAAP |
$ |
17 |
|
|
$ |
20 |
|
|
|
||
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
Operating Profit |
|
2025 |
|
2024 |
|
% Change |
|||||
Operating profit, GAAP |
$ |
1,080 |
|
|
$ |
1,092 |
|
|
(1 |
)% |
|
Acquisition-related costs |
|
|
9 |
|
|
|
— |
|
|
|
|
2022 Global Productivity Initiative |
|
|
— |
|
|
|
27 |
|
|
|
|
Operating profit, non-GAAP |
$ |
1,089 |
|
|
$ |
1,118 |
|
|
(3 |
)% |
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
Operating Profit Margin |
2025 |
|
2024 |
|
Change |
||||||
Operating profit margin, GAAP |
|
21.1 |
% |
|
|
21.6 |
% |
|
(50 |
) |
|
Acquisition-related costs |
|
|
0.2 |
% |
|
|
— |
% |
|
|
|
2022 Global Productivity Initiative |
|
|
— |
% |
|
|
0.5 |
% |
|
|
|
Operating profit margin, non-GAAP |
|
21.3 |
% |
|
|
22.1 |
% |
|
(80 |
) |
Note: Tables may not sum due to rounding. The impact of non-GAAP adjustments may not necessarily equal the difference between “GAAP” and “non-GAAP” as a result of rounding. |
Table 8 |
||||||||||||||||||||
Continued |
||||||||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Non-GAAP Reconciliations |
||||||||||||||||||||
|
||||||||||||||||||||
For the Three Months Ended |
||||||||||||||||||||
|
||||||||||||||||||||
(Dollars in Millions Except Per Share Amounts) (Unaudited) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
2025 |
|||||||||||||||||||
|
Income
|
|
Provision
|
|
Net Income
|
|
Less: Income
|
|
Net Income
|
|
Effective
|
|
Diluted
|
|||||||
As Reported GAAP |
$ |
1,007 |
|
$ |
234 |
|
$ |
773 |
|
$ |
30 |
|
$ |
743 |
|
23.2 |
% |
|
$ |
0.91 |
Acquisition-related costs |
|
9 |
|
|
2 |
|
|
7 |
|
|
— |
|
|
7 |
|
— |
% |
|
|
0.01 |
Non-GAAP |
$ |
1,016 |
|
$ |
236 |
|
$ |
780 |
|
$ |
30 |
|
$ |
750 |
|
23.2 |
% |
|
$ |
0.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
2024 |
|||||||||||||||||||
|
Income
|
|
Provision
|
|
Net Income
|
|
Less: Income
|
|
Net Income
Company |
|
Effective
|
|
Diluted
|
|||||||
As Reported GAAP |
$ |
1,010 |
|
$ |
243 |
|
$ |
767 |
|
$ |
36 |
|
$ |
731 |
|
24.1 |
% |
|
$ |
0.89 |
2022 Global Productivity Initiative |
|
27 |
|
|
4 |
|
|
23 |
|
|
— |
|
|
23 |
|
(0.3 |
)% |
|
|
0.02 |
Non-GAAP |
$ |
1,036 |
|
$ |
247 |
|
$ |
789 |
|
$ |
36 |
|
$ |
753 |
|
23.8 |
% |
|
$ |
0.91 |
Note: Tables may not sum due to rounding. The impact of non-GAAP adjustments may not necessarily equal the difference between “GAAP” and “non-GAAP” as a result of rounding. |
|
(1) The income tax effect on non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. |
|
(2) The impact of non-GAAP items on the Company’s effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on Income before income taxes and Provision for income taxes. |
Table 9 |
|||||||||||
|
|||||||||||
|
|||||||||||
Non-GAAP Reconciliations |
|||||||||||
|
|||||||||||
For the Six Months Ended |
|||||||||||
|
|||||||||||
(Dollars in Millions Except Per Share Amounts) (Unaudited) |
|||||||||||
|
|
|
|
|
|
|
|||||
Gross Profit |
|
2025 |
|
2024 |
|
|
|||||
Gross profit, GAAP |
$ |
6,056 |
|
|
$ |
6,105 |
|
|
|
||
2022 Global Productivity Initiative |
|
— |
|
|
|
9 |
|
|
|
||
Gross profit, non-GAAP |
$ |
6,056 |
|
|
$ |
6,114 |
|
|
|
||
|
|
|
|
|
|
|
|||||
Gross Profit Margin |
2025 |
|
2024 |
|
Change |
||||||
Gross profit margin, GAAP |
|
60.4 |
% |
|
|
60.3 |
% |
|
10 |
|
|
2022 Global Productivity Initiative |
|
— |
% |
|
|
0.1 |
% |
|
|
||
Gross profit margin, non-GAAP |
|
60.4 |
% |
|
|
60.4 |
% |
|
— |
|
|
|
|
|
|
|
|
||||||
Selling, General and Administrative Expenses |
2025 |
|
2024 |
|
|
||||||
Selling, general and administrative expenses, GAAP |
$ |
3,861 |
|
|
$ |
3,855 |
|
|
|
||
ERISA litigation matter |
|
|
(15 |
) |
|
|
— |
|
|
|
|
2022 Global Productivity Initiative |
|
— |
|
|
|
(3 |
) |
|
|
||
Selling, general and administrative expenses, non-GAAP |
$ |
3,845 |
|
|
$ |
3,852 |
|
|
|
||
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
Selling, General and Administrative Expenses as a Percentage of |
2025 |
|
2024 |
|
Change |
||||||
Selling, general and administrative expenses as a percentage of Net sales, GAAP |
|
38.5 |
% |
|
|
38.1 |
% |
|
40 |
|
|
ERISA litigation matter |
|
|
(0.1 |
)% |
|
|
— |
% |
|
|
|
2022 Global Productivity Initiative |
|
— |
% |
|
|
(0.1 |
)% |
|
|
||
Selling, general and administrative expenses as a percentage of Net sales, non-GAAP |
|
38.4 |
% |
|
|
38.0 |
% |
|
40 |
|
|
|
|
|
|
|
|
||||||
Other (Income) Expense, Net |
2025 |
|
2024 |
|
|
||||||
Other (income) expense, net, GAAP |
$ |
39 |
|
|
$ |
111 |
|
|
|
||
Acquisition-related costs |
|
|
(9 |
) |
|
|
— |
|
|
|
|
2022 Global Productivity Initiative |
|
— |
|
|
|
(51 |
) |
|
|
||
Other (income) expense, net, non-GAAP |
$ |
30 |
|
|
$ |
60 |
|
|
|
||
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
Operating Profit |
|
2025 |
|
2024 |
|
% Change |
|||||
Operating profit, GAAP |
$ |
2,156 |
|
|
$ |
2,139 |
|
|
1 |
% |
|
ERISA litigation matter |
|
|
15 |
|
|
|
— |
|
|
|
|
Acquisition-related costs |
|
|
9 |
|
|
|
— |
|
|
|
|
2022 Global Productivity Initiative |
|
— |
|
|
|
63 |
|
|
|
||
Operating profit, non-GAAP |
$ |
2,181 |
|
|
$ |
2,202 |
|
|
(1 |
)% |
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|||||
Operating Profit Margin |
2025 |
|
2024 |
|
Change |
||||||
Operating profit margin, GAAP |
|
21.5 |
% |
|
|
21.1 |
% |
|
40 |
|
|
ERISA litigation matter |
|
0.2 |
% |
|
|
— |
% |
|
|
||
Acquisition-related costs |
|
|
0.1 |
% |
|
|
— |
% |
|
|
|
2022 Global Productivity Initiative |
|
— |
% |
|
|
0.7 |
% |
|
|
||
Operating profit margin, non-GAAP |
|
21.8 |
% |
|
|
21.8 |
% |
|
— |
|
|
|
|||||||||||
Non-Service Related Postretirement Costs |
2025 |
|
2024 |
|
|
||||||
Non-service related postretirement costs, GAAP |
$ |
95 |
|
|
$ |
44 |
|
|
|
||
ERISA litigation matter |
|
|
(50 |
) |
|
|
— |
|
|
|
|
Non-service related postretirement costs, non-GAAP |
$ |
45 |
|
|
$ |
44 |
|
|
|
Note: Tables may not sum due to rounding. The impact of non-GAAP adjustments may not necessarily equal the difference between “GAAP” and “non-GAAP” as a result of rounding. |
Table 9 |
||||||||||||||||||||
Continued |
||||||||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Non-GAAP Reconciliations |
||||||||||||||||||||
|
||||||||||||||||||||
For the Six Months Ended |
||||||||||||||||||||
|
||||||||||||||||||||
(Dollars in Millions Except Per Share Amounts) (Unaudited) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
2025 |
|||||||||||||||||||
|
Income
|
|
Provision
|
|
Net Income
|
|
Less: Income
|
|
Net Income
|
|
Effective
|
|
Diluted
|
|||||||
As Reported GAAP |
$ |
1,959 |
|
$ |
460 |
|
$ |
1,499 |
|
$ |
66 |
|
$ |
1,433 |
|
23.5 |
% |
|
$ |
1.76 |
ERISA litigation matter |
|
65 |
|
|
12 |
|
|
53 |
|
|
— |
|
|
53 |
|
(0.1 |
)% |
|
|
0.06 |
Acquisition-related costs |
|
9 |
|
|
2 |
|
|
7 |
|
|
— |
|
|
7 |
|
— |
% |
|
|
0.01 |
Non-GAAP |
$ |
2,034 |
|
$ |
475 |
|
$ |
1,559 |
|
$ |
66 |
|
$ |
1,493 |
|
23.4 |
% |
|
$ |
1.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
2024 |
|||||||||||||||||||
|
Income
|
|
Provision
|
|
Net Income
|
|
Less: Income
|
|
Net Income
|
|
Effective
|
|
Diluted
|
|||||||
As Reported GAAP |
$ |
1,977 |
|
$ |
482 |
|
$ |
1,495 |
|
$ |
81 |
|
$ |
1,414 |
|
24.4 |
% |
|
$ |
1.71 |
2022 Global Productivity Initiative |
|
63 |
|
|
10 |
|
|
53 |
|
|
— |
|
|
53 |
|
(0.3 |
)% |
|
|
0.07 |
Non-GAAP |
$ |
2,040 |
|
$ |
492 |
|
$ |
1,548 |
|
$ |
81 |
|
$ |
1,467 |
|
24.1 |
% |
|
$ |
1.78 |
Note: Tables may not sum due to rounding. The impact of non-GAAP adjustments may not necessarily equal the difference between “GAAP” and “non-GAAP” as a result of rounding. |
|
(1) The income tax effect on non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. |
|
(2) The impact of non-GAAP items on the Company’s effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustments on Income before income taxes and Provision for income taxes. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250801612356/en/
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