Helped along by a postive foreign exchange, Colgate-Palmolive Company today reported worldwide net sales of $4.002 billion in first quarter 2018, an increase of 6.5%. Global unit volume increased 2.0%, pricing was even with the year ago period and foreign exchange was positive 4.5%. The previously disclosed professional skin care acquisitions contributed 0.5% to unit volume growth. Organic sales (Net sales excluding the impact of foreign exchange, acquisitions and divestments) increased 1.5%. Net income was $634 million. Gross profit margin was 60.2%, inline with 60.3% in first quarter 2017. Colgate's leadership in the global toothpaste market continued during the quarter with a market share at 42.4%. The company maintaind its lead in the global manual toothbrush category, too, with a share of 32.5%.
"The first quarter was a challenging one as category growth remained soft in many markets around the world. While net sales grew 6.5%, organic sales grew 1.5%, below our expectations, due to flat unit volume growth in emerging markets," said Ian Cook, chairman, president and chief executive officer. "In developed markets, unit volume grew 4.5% and organic volume grew 3.0%, led by strong volume growth in North America and Europe. Encouragingly, worldwide pricing improved sequentially versus fourth quarter 2017."
Looking ahead, Cook noted that while uncertainty in global markets and category growth worldwide remain challenging, Colgate is maintaining its focus on brand building and increased productivity while accelerating change efforts.
"Based on current spot rates, we expect a mid-single-digit net sales increase and low-single-digit organic sales growth in 2018, with sequential improvement in organic sales growth in the balance of the year," he concluded.
Taking a closer look at regional results:
• North America net sales increased 9.0% in first quarter 2018. Unit volume increased 9.0%, pricing decreased 0.5% and foreign exchange was positive 0.5%. The previously disclosed professional skin care acquisitions contributed 3.5% to unit volume growth. Organic sales and organic unit volume for North America increased 5.0% and 5.5%, respectively. In the U.S., Colgate maintained its leadership in the toothpaste category during the quarter with its market share at 35.2% year to date. Successful products include Colgate Optic White Stain Fighter, Colgate Optic White Stain-Less White, Colgate Sensitive Smart White and Tom's of Mainetoothpastes. In manual toothbrushes, Colgate widened its brand market leadership in the U.S. with its market share in that category at 42.6% year to date, supported by the success of Colgate Total 360° Advanced Optic White and Colgate Gum Health manual toothbrushes. Products succeeding in other categories include Softsoap Hydra Bliss body wash and liquid hand soap, Irish Spring Pure Fresh bar soap, Fabuloso Complete liquid cleaner and Suavitel Complete fabric conditioner.
• Latin America net sales increased 0.5% in first quarter 2018. Unit volume was even with the year ago period, pricing increased 0.5% and foreign exchange was even with the year ago period. Volume gains in Brazil were offset by volume declines in Mexico. Organic sales for Latin America increased 0.5%. Colgate maintained its toothpaste leadership in Latin America during the quarter, with market share gains in Brazil, Peru, Chile, Puerto Rico, Guatemala and El Salvador. Products contributing to growth in the region include Colgate Total 12 Salud Visible, Colgate Luminous White XD Shine, Colgate Triple Action Xtra Freshness, Colgate Kids and Colgate Sensitive Pro-Alivio Complete Repair toothpastes. Colgate's leadership in the manual toothbrush category continued throughout the region, supported by the success of Colgate 360° Advanced Total 12 and Colgate Pro Cuidado manual toothbrushes. Products contributing to growth in other categories include Colgate Total 12 mouthwash, Protex Pro-Hidrata shower gel and bar soap, Palmolive Natural Secrets shower gel and bar soap, Lady Speed Stick Derma + Aloe antiperspirant, Suavitel Superior Care fabric conditioner and Axion Perfect Fusion and Fabuloso Complete liquid cleaners.
• European net sales increased 16.0% in first quarter 2018. Unit volume increased 4.0%, pricing decreased 2.5% and foreign exchange was positive 14.5%. Volume gains were led by France and Italy. Organic sales for Europe increased 1.5%. Colgate maintained its toothpaste leadership in Europe during the quarter, with toothpaste market share gains in France, Germany, Greece, Switzerland, Austria and Denmark. Products succeeding in oral care include Colgate Max White Expert Complete, Colgate Enamel Strength, Colgate Natural Extracts and meridol Parodont Expert toothpastes and Colgate 360° Advanced Whole Mouth Health and Colgate 360° Advanced Max White Expert White manual toothbrushes. Products succeeding in other categories include Colgate Plax mouthwash, Sanex Zero% shower gel, deodorant and body lotion, Palmolive Aroma Sensations shower gel, Palmolive Handwash + Lotion liquid hand soap, Ajax Boost liquid cleaner and Soupline Parfum Supreme fabric conditioner.
• Asia Pacific net sales increased 5.5% during first quarter 2018. Unit volume increased 0.5%, pricing decreased 0.5% and foreign exchange was positive 5.5%. Volume gains in India and the Philippines were partially offset by volume declines in the Greater China region and Australia. Organic sales for Asia Pacific were even with the year ago period. Colgate maintained its toothpaste leadership in the Asia Pacific region during the quarter with market share gains in the Philippines. Products succeeding in the region include Colgate Naturals, Colgate Swarna Vedshakti, Colgate Dare To Love and Colgate Total Charcoal toothpastes. Products succeeding in other categories include Colgate Slim Soft Advanced, Colgate Slim Soft Micro Silky and Colgate Super Flexible manual toothbrushes, Protex Thai Therapy bar soap, Protex shower cream and Softlan Aroma Therapy fabric conditioner.
• Africa/Eurasia Net sales increased 3.5% during first quarter 2018. Unit volume decreased 3.5%, pricing increased 2.5% and foreign exchange was positive 4.5%. The volume decline was mainly driven by South Africa. Organic sales for Africa/Eurasia decreased 1.0%. Colgate maintained its toothpaste leadership in Africa/Eurasia during the quarter, with market share gains in Saudi Arabia, Kenya, Kuwait, Qatar and Oman. Successful products contributing to sales in the region include Colgate Ancient Secrets, Colgate Safe Whitening, Colgate Natural Extracts and Colgate Optic White Extra Power toothpastes, Colgate Zig Zag Charcoal and Colgate Triple Action manual toothbrushes, Palmolive Luminous Oils shower gel and Protex Herbal bar soap.
• Finally, Hill's Pet Nutrition's net sales increased 5.5% during first quarter 2018. Unit volume increased 0.5%, pricing increased 1.0% and foreign exchange was positive 4.0%. Volume gains in the United States, Australia and Brazil were partially offset by volume declines in Japan. Hill's organic sales increased 1.5%.