01.29.24
Happi Top 50 Company Colgate reported a 7.0% growth in net and organic sales in Q4 2023.
Net and organic sales for the full year 2023 both increased 8.5%.
This is the fifth consecutive year the company reached its organic sales growth target of between 3 and 5%, CEO Noel Wallace, said.
“The strong sales growth combined with our commitment to productivity and efficiency drove strong bottom line performance as well, with gross profit, gross profit margin, operating profit, operating profit margin, net income, earnings per share and free cash flow all increasing versus 2022 for both the quarter and the year,” said Wallace. “We continued to invest in the capabilities required to deliver robust growth going forward, building strength in areas like innovation, digital, data and analytics, revenue growth management and advertising. We leveraged our strong margin performance to invest behind building our brands, with a 19% increase in advertising spending in 2023, and we expect higher levels of brand investment in 2024.”
Full Year 2024 Guidance
For 2024, the company expects net sales growth to be 1% to 4% including a low-single-digit negative impact from foreign exchange.
The company also expects organic sales growth to be within its long-term targeted range of 3% to 5%.
Divisional Performance
North America accounted for 20% of company sales. Organic sales growth was led by oral care and personal care. In the US, Colgate's share of the toothpaste market is 33.7% year to date and its share of the manual toothbrush market is 41.1% year to date.
Organic sales growth was led by Argentina, Mexico, Brazil and Colombia. The increase in operating profit as a percentage of net sales was primarily due to higher pricing, savings from the company’s funding-the-growth initiatives and lower raw and packaging material costs, despite higher foreign exchange transaction costs, partially offset by losses on marketable securities and a gain on the sale of other assets and a value-added tax refund in fourth quarter 2022.
Europe accounted for 14% of company Sales. Organic sales growth in the UK, the Nordic region and Poland was partially offset by organic sales declines in the Filorga business and Italy.
The increase in operating profit as a percentage of net sales was primarily due to cost savings from the company’s funding-the-growth initiatives and higher pricing, partially offset by significantly higher raw and packaging material costs.
Asia Pacific accounted for 14% of company sales. Organic sales growth in India and Australia was partially offset by organic sales declines in the Greater China region and Thailand.
The increase in operating profit as a percentage of net sales was primarily due to cost savings from the Company's funding-the-growth initiatives and higher pricing, partially offset by higher overhead expenses.
Africa/Eurasia accounted for 5% of company sales. Organic sales growth was led by Turkiye, the Eurasia region, Nigeria and South Africa.
The decrease in operating profit as a percentage of net sales was primarily due to higher raw and packaging material costs predominantly driven by significant foreign exchange transaction costs, higher overhead expenses and increased advertising investment, partially offset by higher pricing and cost savings from the company’s funding-the-growth initiatives.