Colgate-Palmolive Company (CL) Earnings & Analysis

Latest quarter

Colgate-Palmolive reported Q2 FY2026 revenue of $5.4 billion, up from $5.1 billion a year earlier. Revenue exceeded the consensus by 0.20%, although both the reported figure and estimate round to $5.4 billion. Adjusted earnings per share were $0.99, above the $0.95 consensus, while reported diluted EPS fell to $0.86 from $0.91.

CEO Noel Wallace said emerging markets led sales growth, with contributions from India, Brazil, Mexico and China. He also cited growth in Europe and Hill’s, while saying the company was dissatisfied with its U.S. performance.

Colgate-Palmolive reported a gross margin of 61.5%, compared with 60.1% a year earlier, while operating margin declined to 19.0% from 21.1%. Wallace said the bulk of gross-margin growth came from the core business and company initiatives, with a modest benefit from refunds. Quarterly free cash flow rose to $867.0 million from $776.0 million.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Asked about the U.S., CEO Noel Wallace said competition had intensified and retailers reduced inventories during the quarter. He said categories rebounded in June from softness in May and remained broadly consistent in July, though below historical levels. Wallace said North American shipments were down while consumption was approximately flat.

Wallace said Colgate-Palmolive would increase support for premium toothpaste and other new products, including Fabuloso extensions. He said the company had identified selected pricing gaps at some retailers and would address them carefully, alongside increased advertising in the second half.

On Hill’s, Wallace said organic growth excluding private label was 4%, while volume excluding private label was roughly flat. He said the therapeutic business grew through both volume and pricing. Asked about fresh pet food, he said the U.S. rollout of three single-protein diets was proceeding as planned and that the immediate focus was on building the brand rather than generating significant volume.

Discussing margins, Wallace said Colgate-Palmolive was using pricing, revenue growth management and promotional AI tools while investing in advertising. CFO Stan Sutula cited productivity, pricing and mix among the factors behind the quarter’s margin performance. He said raw-material costs were slightly below expectations because tariff refunds partly offset higher costs.

For the second half, Wallace said he expected growth to be “a little bit more volume-driven” after pricing in the first half. He said the company was assuming category conditions would remain broadly consistent with June and early July. Asked about organic growth, Wallace said the company was “not going to get too specific” and would revisit it as the third quarter progressed.

Guidance

CFO Stan Sutula said Colgate-Palmolive raised its full-year gross-margin guidance to roughly flat from a prior expectation of a decline. Sutula attributed the revision to execution on margin and its components, including pricing, productivity and mix, while expecting higher raw-material costs and tariffs in the second half than in the second quarter.