Colgate-Palmolive has raised its full-year guidance after pledging to pass on higher raw material and logistics costs by further raising prices for its products.
The consumer goods group, whose brands include Speed Stick deodorant and Softsoap, increased its full-year organic sales growth guidance 1 percentage point to between 5 and 7 per cent, but maintained its net sales growth forecast in the 1 to 4 per cent range.
The toothpaste maker reported net sales up 5.5 per cent in the second quarter to $4.48bn, above analysts’ estimates of $4.35bn, according to a Refinitiv poll, and up 5.5 per cent year-on-year. Organic sales grew 9 per cent, with growth in every division.
Colgate reported a jump in costs for raw materials, packaging and logistics in the quarter, as well as a negative 3.5 per cent impact on its net sales from volatile currencies.
“We acted boldly on pricing and are accelerating our revenue growth management plans, including additional pricing, in the balance of the year”, said chief executive Noel Wallace in a statement.
In a call with analysts, he said pricing increases would be “broad based across the world” in the second half.
“It’s an unpredictable environment relative to where we see consumers evolving, where we see inflation evolving”, he said. “But the good news is we’ve taken pricing and we have more pricing planned across the world moving into the back half.”
The New York-based company reported diluted earnings of 72 cents a share, above forecasts of 71 cents.
Colgate is the latest consumer goods company to pass on higher inflationary costs to its customers, following moves by Nestlé, Kraft Heinz, Danone and Unilever.
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