Consumer products company Colgate-Palmolive (NYSE: CL) met Wall Streets revenue expectations in Q3 CY2025, with sales up 1.9% year on year to $5.13 billion. Its non-GAAP profit of $0.91 per share was 2.4% above analysts’ consensus estimates.

Is now the time to buy CL? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Colgate-Palmolive’s third quarter results reflected a stable but challenging consumer environment, as the company delivered sales in line with Wall Street expectations and non-GAAP profit that modestly exceeded consensus. CEO Noel Wallace cited persistent headwinds including consumer uncertainty, cost inflation, and heightened promotional activity as pressures on sales and profit growth. Management attributed the flat organic sales and declining volumes primarily to ongoing sluggishness in North America and category softness in developed markets, while highlighting sequential improvement in performance outside of skin health. Wallace noted, “We are operating with determination and focus,” pointing to broad-based market share stability and continued investment in advertising and innovation as critical to navigating the current landscape.

Looking ahead, Colgate-Palmolive’s strategy is focused on accelerating innovation, leveraging artificial intelligence, and prioritizing productivity programs to drive growth in a slow-moving market. Management emphasized the rollout of its 2030 Strategy, which aims to enhance omnichannel demand generation, deploy more science-based product development, and streamline operations using data analytics and automation. Wallace stated, “We are seizing this moment as the 34,000 Colgate-Palmolive people around the world work to deliver on the change needed to reaccelerate growth and outperform.” The company is also increasing its focus on premiumization and efficiency, with expectations that these efforts will help offset ongoing raw material and tariff pressures.

Key Insights from Management’s Remarks

Management attributed the quarter’s results to weaker consumer demand in key markets, formula adjustments in Latin America, and continued investment in innovation and supply chain efficiency.

• North America volume pressure: The company experienced ongoing category softness and increased couponing, with sequential improvement outside of skin health. Wallace noted persistent weakness in U.S. consumer demand and higher levels of discounting, which affected sales volumes.
• Latin America formula change: A reformulation of Colgate Total in Brazil and other Latin American markets, prompted by consumer feedback about mouth irritation, led to inventory replacements and temporarily weaker oral care sales. Management expects market share to rebound as the new product rolls out.
• Mixed performance in Asia Pacific: India saw softer demand due to a goods and services tax (GST) change and sluggish urban consumption, while China faced challenges in the Holly & Hazel business. However, Colgate’s e-commerce and innovation efforts in China delivered mid-single digit growth, and management expects GST reductions to benefit India longer term.
• Hill’s Pet Nutrition segments: Growth was impacted by category slowdown and reduced e-commerce inventories, but underlying performance was strong in cat and wet food. The exit from private label pet food weighed on year-over-year comparisons, though management expects future gains in premium segments.
• AI and supply chain investment: Colgate-Palmolive emphasized strategic investments in artificial intelligence, predictive analytics, and automation to personalize marketing and enhance supply chain efficiency. These actions are intended to accelerate innovation and cost savings, supporting the company’s 2030 Strategy.

Drivers of Future Performance

Colgate-Palmolive’s outlook is shaped by a focus on driving efficiency, premiumization, and innovation to support modest growth amid ongoing external pressures.

• Productivity and cost management: Management is rolling out a global strategic growth and productivity program (SGPP) to fund incremental investments, streamline processes, and improve operational flexibility. This initiative is expected to help offset inflation, tariffs, and supply chain volatility, while supporting continued earnings growth.
• Investment in science-based innovation: The company is increasing resources for science-driven product development and premium offerings, aiming to stimulate demand across all price tiers. Wallace highlighted the importance of new product pipelines and noted that innovation will support both pricing and market share gains.
• AI-driven marketing and supply chain: Colgate-Palmolive is scaling the use of artificial intelligence and data analytics for targeted marketing, demand planning, and supply chain automation. Management believes these technologies will drive higher return on advertising spend, better personalization, and improved asset utilization, positioning the company for long-term efficiency gains.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will be monitoring (1) the pace at which the new Colgate Total formula regains market share in Latin America, (2) the effectiveness of science-based innovation and AI-driven marketing in driving demand across premium and value segments, and (3) the progression of the strategic growth and productivity program in delivering cost savings and operational improvements. Continued supply chain optimization and the impact of pricing actions will also be key areas of focus.

Colgate-Palmolive currently trades at $75.68, down from $76.51 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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