Chairman, president and CEO Ian Cook commented, “We are delighted that our strong growth momentum continued on both the top and bottom lines. For the tenth consecutive quarter, operating profit, net income and diluted earnings per share all increased versus the year ago period … advertising investment increased versus year ago, both absolutely and as a percent to sales, and we continue to plan for higher levels of commercial investment in the balance of the year in support of a very full pipeline of new products worldwide.”
He continued, “Colgate’s leading global market shares in toothpaste and manual toothbrushes remain strong at 45.0% and 33.4%, respectively, on a year-to-date basis. Pleasingly, we continue to make great progress in mouthwash as well, with our global market share in that category reaching a record high at 16.8% year to date, up 130 basis points versus prior year.”
Cook said that looking forward, the firm expects its “growth momentum to continue in the balance of the year. We are pleased that our 2012 Restructuring Program is on track and proceeding smoothly. We also continue to be sharply focused on our aggressive worldwide funding-the-growth programs and our strategic pricing initiatives.
“Based on this, for 2013, we continue to anticipate another year of strong organic sales growth and gross margin expansion, and we continue to expect diluted earnings per share to grow 4.5% to 5.5% for the year, on a dollar basis, assuming average exchange rates in the balance of the year are equal to current spot rates.”
Cook concluded, “As we look ahead to 2014, while our global budget process is in its initial stages, based on the company’s current growth momentum and our confidence in the strength of our global growth and efficiency program, we are planning for a year of gross margin expansion and double-digit earnings per share growth, on a dollar basis based on current spot rates, excluding charges related to the 2012 Restructuring Program.”
In North America, which represents 18% of company sales, net sales increased 1.0% in third quarter 2013. Unit volume increased 1.5%, pricing was even with the year ago quarter and foreign exchange was negative 0.5%. Operating profit in North America increased 15% in the third quarter of 2013 to $244 million.
In the US, new product launches are contributing to volume growth across categories. Market share gains year to date were seen in manual toothbrushes, powered toothbrushes, mouthwash, body washes and fabric conditioners. In toothpaste, the success of Colgate Optic White and Colgate Optic White Dual Action toothpastes helped drive market share for the Colgate Optic White brand to 5.5% year to date, up 0.6 share points versus a year ago. Strong sales of Colgate Total, Colgate Max Fresh Cool Scrub, Colgate Sensitive SmartFoam with Whitening and Tom’s of Maine toothpastes also contributed to volume growth in the quarter.
In manual toothbrushes, Colgate continued its brand market leadership with its market share in that category reaching a record 38.4% year to date, up 2.0 share points versus a year ago. This success was driven by strong sales of Colgate 360° Optic White, Colgate 360° Total Advanced Floss Tip bristles and Colgate Extra Clean manual toothbrushes. Building on this growth momentum, Colgate Slim Soft manual toothbrush was just launched in the US, with robust advertising support planned to begin in the fourth quarter.
Successful products driving volume growth in the US in other categories include Colgate Total Advanced Pro-Shield and Colgate Optic White mouthwashes, Softsoap brand Acai Berry & Tropical Water and Softsoap brand Coconut Island Quench body washes, Palmolive Soft Touch dish liquid and Suavitel Silky Essence fabric conditioner.