Colgate-Palmolive shares slide premarket as company says difficult cost environment to continue to weigh on profit

colgate-palmolive-shares-slide-premarket-as-company-says-difficult-cost-environment-to-continue-to-weigh-on-profit

Colgate-Palmolive Co. shares CL, -5.13% slid 4% premarket Friday, after profit fell in the first quarter and company warned of continued pressure from inflation and geopolitical concerns. The consumer goods giant posted net income of $559 million, or 66 cents a share, for the quarter, down from $681 million, or 80 cents a share, in the year-earlier period. Adjusted per-share earnings came to 74 cents, matching the FactSet consensus. Sales edged up to $4.399 billion from $4.344 billion, squeaking ahead of the $4.398 billion FactSet consensus. The company said its gross profit margin and base business gross profit margin fell 220 basis points. “While our growth continued on the top line, our profitability was impacted by significant increases in raw material and logistics costs worldwide, and we expect the difficult cost environment to continue for the next several quarters,” Chief Executive Noel Wallace said in a statement. “We remain sharply focused on our revenue growth management, including additional pricing, and funding-the-growth and other productivity initiatives.” Wallace also cited the uncertainty stemming from Russia’s invasion of Ukraine, the COVID pandemic, supply chain disruptions and volatility in consumer demand and currencies as pressures on the business. The company is now expecting full-year sales growth to come in at the high end of its 1% to 4% guidance. It expects a decline in gross profit margins, increased ad spending and double-digit EPS growth. Adjusted EPS however is expected to be down in the mid-single-digits. Shares are down about 5% in the year to date, while the S&P 500 SPX, -3.63% has fallen 10%.

Source: Marketwatch

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