Analysts expect sales to improve
Analysts expect Colgate-Palmolive (CL) to report sales of $4.0 billion in 1Q18, which represents a YoY (year-over-year) rise of 6.6%.
The graph above shows that Colgate-Palmolive’s sales are showing an improving trend thanks to favorable currency rates and improvements in its volumes. However, lower pricing across several markets has remained a drag.
Colgate-Palmolive’s top line is likely to benefit from improvements in volumes driven by new product launches in the oral and personal care segments backed by increased investments in advertising. Also, favorable currency rates are expected to support the company’s sales growth rate in 1Q18. The company’s premium products, including Colgate Optic White and Tom’s of Maine, are also expected to sustain growth momentum.
However, pricing pressures in the liquid hand soap and dish category, retailers destocking their inventories, and increased competition are likely to remain a drag.
In comparison, the sales of the company’s peers, including Procter & Gamble (PG) and Kimberly-Clark (KMB), are also expected to improve led by volume improvements, but lower pricing is expected to remain a drag. Meanwhile, Church & Dwight (CHD) and Clorox (CLX) are expected to benefit from their balanced portfolios of value and premium products.
Colgate-Palmolive’s management expects its sales to mark mid-single-digit growth in 2018 driven by new product launches and an improved market share led by increased advertising spending.
The company’s market-leading position in the toothpaste and toothbrush category is likely to support its volumes in the United States. Moreover, in Brazil, the company’s sales are expected to benefit from growth in the pharmacy channel and a strong product pipeline in the personal care segment. Also, increased advertising investments are likely to support its market share in Europe.