Colgate Q2 Sales Rise 2%

• Colgate-Palmolive Company’s second quarter sales rose 2% to more than $4.2 billion. Unit volume grew 5.0%, pricing increased 3.5% and foreign exchange was negative 6.5%. Excluding divested businesses, global unit volume grew 5.5%. The Sanex acquisition contributed 1.0% to sales and volume growth. Organic sales grew 8.0%. Net income rose less than 1% to $627 million. Gross profit margin was 57.7% in second quarter 2012, an increase of 30 basis points, according to the company.

“We are very pleased that our top and bottom line growth momentum continued this quarter, with net sales, gross profit, operating profit, net income and diluted earnings per share all increasing versus year ago,” said Ian Cook, chairman, president and chief executive officer. “The excellent 8.0% organic sales growth, which was the largest increase we have seen in eight quarters, was driven by unit volume gains and higher pricing on a worldwide basis. The robust growth was led by the emerging markets where organic sales grew 13.0% in the quarter, and we are encouraged by the 2.5% organic sales growth in the developed markets.”

Colgate’s global market shares in toothpaste and manual toothbrushes are both at record highs year to date. Colgate’s share of the global toothpaste market strengthened to 45.0% year to date, up 0.6 share points versus a year ago. The company’s global leadership in manual toothbrushes also strengthened during the quarter with Colgate’s global market share in that category reaching 32.8% year to date, up 0.6 share points versus year ago.

In North America (18% of company sales), net sales increased 2.0% in second quarter 2012. Unit volume decreased 0.5% with 3.0% higher pricing and 0.5% negative foreign exchange. Organic sales increased 2.5% during the quarter.

In the US, new product launches including Colgate Optic White and Colgate Sensitive Pro-Relief toothpastes are strengthening the firm’s leadership in toothpaste, with its share of that market reaching 36.6% year to date, up 1.5 share points versus year ago. In manual toothbrushes, Colgate achieved brand market leadership year to date, driven by the success of Colgate 360° Optic White, Colgate 360° Sensitive Pro-Relief, Colgate 360° Total Advanced and Colgate Extra Clean manual toothbrushes.
Successful new products in the US in other categories include Softsoap brand Pampered Hands Jasmine Oasis foaming hand soap, Softsoap brand Vineyard Escape Scrub, Irish Spring Deep Action Scrub and Irish Spring Clear & Fresh Skin body washes, Palmolive Soft Touch with Vitamin E and Palmolive Fresh Sponge dish liquids, Tom’s of Maine Naturally Dry antiperspirant, Speed Stick Power antiperspirants/deodorants and Fabuloso Sunset Spice liquid cleaner.

“Looking ahead, we continue to be sharply focused on our aggressive funding-the-growth programs and our strategic worldwide pricing initiatives,” said Cook. “We anticipate that the combined benefits from those programs will help us offset the transaction impact of negative foreign exchange and achieve gross margin expansion in 2012, allowing for even higher levels of advertising support behind a full pipeline of new products planned for launch in the balance of the year.”