Colgate-Palmolive Stock Falls as Foreign Exchange Rates Hurt Sales, Outlook
Key Takeaways
- Colgate-Palmolive's fourth-quarter revenue was dragged down by negative foreign exchange impacts.
- Revenue missed analysts' forecasts as sales dropped in Latin America and North America.
- The household products maker warned that full-year revenue will also be held back because of foreign exchange issues.
Colgate-Palmolive (CL) shares fell 5% Friday after the household products company missed revenue forecasts and gave weak guidance as it was hurt by foreign exchange rates.
The maker of its namesake toothpaste, dishwashing liquid, and Hill's pet food reported revenue declined 0.1% to $4.94 billion. Analysts surveyed by Visible Alpha had anticipated $4.98 billion. Adjusted earnings per share (EPS) of $0.91 exceeded forecasts.
Latin America Sales Slump More Than 7%
Foreign exchange rates caused a negative 4.4% effect on revenue. They were especially impactful in Colgate's largest regional market, Latin America, which posted a sales slump of 7.2%. Sales were also down 1.0% in North America. However, they were higher in Europe (+4.9%), Asia-Pacific (+3.7%), and Africa/Eurasia (+2.8%). Sales at Hill's, which made up the largest percentage of the company's total revenue, rose 2.3%.
CEO Noel Wallace argued that Colgate met its goals for the year to "deliver peer leading growth while funding investment for future growth," as well as building flexibility into its profit and loss "to counter macro headwinds."
For 2025, Colgate expects revenue to be "roughly flat" from 2024's $20.1 billion, "including a mid-single-digit negative impact from foreign exchange." Visible Alpha estimates were for $20.3 billion.
Even with today's drop, shares of Colgate-Palmolive remain slightly higher over the past year.
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