Q2 2026 Colgate-Palmolive Co Earnings Call Transcript
Key Points
- Colgate-Palmolive Co (CL) delivered strong top and bottom-line growth in Q2 2026, with organic sales growth in four of five divisions and three of four categories.
- Emerging markets led sales growth, up mid-single digits, driven by strong performances in India, Brazil, Mexico, and China.
- The Hill's Pet Nutrition business continues to outperform the category, delivering solid organic growth of 4% (ex-private label) despite a tough market, with strong performance in therapeutic, wet, cat, and small paws segments.
- Gross margin expanded by 100 basis points in the quarter, driven by core business initiatives, revenue growth management, and positive mix, leading to an increased full-year gross margin guidance to roughly flat.
- The company generated strong cash flow, with free cash flow up 18% and $1.4 billion returned to shareholders in the first half of the year.
- Colgate-Palmolive Co (CL) is making significant strides in AI and digital capabilities, including scaling Promo AI tools and investing in data analytics, which is improving ROI on advertising and driving productivity.
- The company expressed dissatisfaction with its US business performance, citing heightened competition, category softness, and inventory reductions from key retailers.
- North America shipments were down 3% versus consumption of 1%, indicating significant inventory destocking in the quarter.
- The pet category remains soft, with the US market roughly flat, and the company noted a decline in the dry dog food business due to a shift in pet ownership trends.
- Colgate-Palmolive Co (CL) faces significant cost inflation and tariff pressures, with cost of goods expected to peak in the back half of the year, creating uncertainty for future margins.
- The company maintained its organic sales growth guidance despite a strong first half, citing global volatility, consumer uncertainty, and the impact of higher gasoline prices on consumer confidence.
- The company lost some market share in the US during the quarter, which contributed to the gap between tracked retail sales and reported results.
Good morning. Welcome to todayâs Colgate-Palmolive second quarter 2026 earnings conference call. This call is being recorded and is being simulcast live at www.colgatepalmolive.com.
For opening remarks, Iâd like to turn this call over to EVP Investor Relations, Claire Ross.
Good morning, welcome to our second quarter 2026 earnings release conference call. This is Claire Ross, Executive Vice President, Investor Relations. Todayâs conference call will include forward-looking statements. Actual results could differ materially from these statements.
Forward-looking statements inherently involve risks and uncertainties and are made on the basis of our views and assumptions at this time. Please refer to the earnings press release and our most recent filings with the SEC, including our 2025 annual report on Form 10-K and subsequent SEC filings, all available on our website, for a discussion of the
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