Mega cap tech stocks have been dominating the headlines, but today we focus on Colgate-Palmolive (CL, Financial), a consumer products company reaching new all-time highs. Colgate-Palmolive operates in Oral Care, Personal Care, Home Care, and Pet Nutrition with brands including Colgate, Palmolive, Irish Spring, Protex, Sanex, Softsoap, Speed Stick, Ajax, Fabuloso, Hill's Science Diet, and more.
- Years ago, Colgate-Palmolive (CL, Financial) faced declining or flat sales. Recently, the company refocused on growth, leveraging its strong core businesses and global household penetration. CL expanded its big franchises into adjacencies and adjusted its portfolio strategy for global channel expansion.
- CL shifted focus from market share to brand penetration, targeting specific categories and country combinations for growth. The company restructured organizational design to enhance growth opportunities, resulting in 19 consecutive quarters of year-over-year growth.
- In late April, CL reported a strong Q1 with EPS and revenue beats. Revenue grew 6.2% year-over-year to $5.07 billion, with organic sales growth across all categories and divisions. Volume and pricing growth contributed to a 6.2% total growth, impressive for a consumer products company, especially considering the 6.5% growth in the previous year.
- CL balanced pricing and volume growth, achieving solid volume growth in Q1 despite volume softness in China and headwinds from lower private label growth. Increased advertising spend boosted growth across a larger portfolio percentage, keeping major brands relevant and vibrant.
- A notable highlight from Q1 was CL raising its FY24 organic sales growth guidance to +5-7% from the previous +3-5%. This significant increase, made after just one quarter, signals strong confidence in 2024's performance.
While Colgate-Palmolive (CL) might not be as thrilling as the AI tech craze, its stock has steadily risen since early October. Retailers report a consumer shift towards essential items over discretionary ones, benefiting CL's everyday need products like toothpaste, soap, deodorant, and pet food. CL will report Q2 results in late July.
