Colgate-Palmolive (NYSE:CL) executives said the company delivered “stronger-than-expected” fourth-quarter results and ended 2025 with improving momentum, while emphasizing that 2026 will begin under a highly uncertain operating backdrop as the company launches its new 2030 strategy.
On the company’s fourth-quarter and full-year 2025 earnings call, Chairman, President and CEO Noel Wallace said Colgate delivered growth in organic sales, net sales, gross profit, base business earnings per share, and free cash flow in 2025 despite “lower-than-expected category growth,” “higher-than-anticipated raw material inflation,” and the impact of higher tariffs.
Momentum improved exiting 2025, but categories remain sluggish
In response to questions about 2026 guidance, Wallace said category growth appears to have stabilized, but at lower levels than historical assumptions. He cited a range of roughly 1.5% to 2.5% category growth, alongside “significant uncertainty all around the world,” including the risk of higher promotional intensity if demand stays weak.
Wallace reiterated that the company’s 2026 organic sales growth guidance range of 1% to 4% reflects that uncertainty, adding a simple framework:
- If categories worsen, Colgate would expect to land toward the low end of the range.
- If categories hold at current levels, the company would expect to be closer to the middle.
- If categories strengthen, it hopes to perform toward the higher end.
2030 strategy priorities and the Strategic Growth and Productivity Program
Wallace said 2025 marked the completion of Colgate’s prior strategy, which he said added $5 billion in sales. The company now transitions into a 2030 strategy aimed at accelerating growth and total shareholder return.
He outlined five focus areas for the next phase, including leveraging global brands, accelerating science-based innovation across price tiers, expanding omni-channel demand generation, investing in scale capabilities like digital/data/analytics/AI (including revenue growth management and AI-driven innovation), and enhancing company culture. Wallace also highlighted supply chain optimization through predictive analytics and automation to improve service levels, asset utilization, and quality systems.
Management also pointed to the Strategic Growth and Productivity Program as a means to unlock organizational changes and funding to support the strategy. Wallace said the program, along with the company’s “Funding the Growth” initiatives, is intended to help offset cost inflation and support margin expansion.
Regional performance: Latin America strength, North America still pressured
Wallace described the U.S. market as “sluggish” and said the company is not assuming a major rebound in the near term. He noted month-to-month swings visible in scanner data, along with downward pressure on inventories as categories slow. He said volume has been particularly challenged in the U.S., with some core categories turning negative.
For North America specifically, Wallace said the fourth quarter improved from the third quarter but remained weak. He cited October and November pressures that he said were impacted by a government shutdown, likely SNAP-related factors, and broader consumer uncertainty. He also referenced category data showing widespread volume declines in October and November, improving somewhat in December. Home care categories such as dish and fabric softener were called out as particularly impacted in the quarter.
By contrast, Wallace said Latin America posted an “encouraging” quarter, with Mexico and Brazil described as very strong and both up high single digits. He said the Andean and Central America regions improved as well, though he noted those areas remain challenging from a category standpoint and face heightened competition. He also said Colgate has been able to take pricing in the region, citing inflationary pressure on fats and oils.
In Asia, Wallace said results improved sequentially with India returning to growth. He said demand among low-income urban consumers in India remains soft, and outlined a continued focus on premiumization in urban markets, pointing to launches such as Colgate Total, Colgate PerioGard through the professional channel, and Optic White Purple.
On Europe, Wallace said pricing is easing versus prior periods, with volume “maybe slightly better” than expected. He cited Western Europe as better, while noting continued weakness in Eastern Europe, specifically Poland.
Hill’s performance, Prime100 update, and cash flow strength
Wallace said Hill’s delivered a “terrific” quarter, with organic growth excluding private label in excess of 5% and positive volume. He noted that private label had a 360 basis point negative impact to volume, but that underlying volume grew 2%. Wallace emphasized continued strength in the Prescription Diet business and said the company is gaining share across channels, aided by “science-based innovation.” He also pointed to supply chain benefits and greater flexibility at the company’s Tonganoxie plant to support more wet product capacity.
Discussing Prime100, the Australia-based acquisition, Wallace said results are coming in ahead of plan and exceeding expectations. He described the brand as science-driven and vet-endorsed and said the company is in “watch and learn” mode to determine whether the approach can be applied more broadly, while focusing on continued success in Australia.
Chief Financial Officer Stan Sutula highlighted Colgate’s cash generation, stating the company delivered record operating cash flow of $4.2 billion in 2025 and higher free cash flow, driven by cash profits and net working capital performance. He said that has contributed to improved operational ROIC and cash conversion cycle, leaving the balance sheet with low leverage and “dry powder.”
On capital allocation, Sutula said the company’s first priority is investing in the business, followed by returning cash to shareholders through dividends and buybacks, and then M&A. He said an impairment announced that day reflected changing market conditions, but management still believes in the long-term health of the business involved and its role in the portfolio.
Looking to foreign exchange, Sutula said the company expects FX to be a low single-digit benefit to revenue in 2026, concentrated in the first half, and said the company plans to use FX as “flexibility” in the model—both to invest back into the business and contribute to the bottom line—while noting currency conditions can change quickly.
About Colgate-Palmolive (NYSE:CL)
Colgate-Palmolive Company is a global consumer products company with a long history in household and personal care categories. The business traces its roots to the early 19th century and has evolved into a multinational manufacturer and marketer of everyday consumer goods focused on health, hygiene and home care.
The company’s core activities center on oral care, personal care, home care and pet nutrition. Its product portfolio includes toothpaste, toothbrushes and mouthwash in oral care; soaps, body washes and deodorants in personal care; dishwashing liquids, surface cleaners and other household products in home care; and scientifically formulated pet foods under its pet nutrition business.
