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Colgate-Palmolive has increased its 2024 profit and organic sales forecasts following a robust second-quarter performance driven by sustained demand for its premium products. On Friday, the consumer goods giant reported better-than-expected results, bolstering confidence in its financial outlook.
The company’s organic sales in Latin America, a key revenue region, surged by 18.8% this quarter, surpassing last year’s 16% growth. This significant increase underscores the region’s continued importance to Colgate-Palmolive’s overall performance. The company’s strategic investments in advertising have also played a crucial role in maintaining its market position despite intensified competition from lower-priced private labels.
Consumer packaged goods firms like Colgate-Palmolive and Kimberly-Clark have generally seen higher sales volumes driven by consistent consumer demand, even as they implement price hikes to offset rising costs. For Colgate-Palmolive, increased product prices have mitigated the impact of soaring raw material and packaging expenses, leading to a 280-basis point expansion in gross profit margins to 60.6% during the quarter.
Colgate-Palmolive has now projected an annual profit growth of 8% to 11%, an increase from its previous forecast of mid- to high-single digits. Full-year organic sales growth is anticipated to range between 6% and 8%, up from an earlier estimate of 5% to 7%. The company’s second-quarter product prices rose by 4.2%, while organic volumes increased by 4.7%, a notable rebound from a 3% decline in the same quarter last year.
Following the announcement, Colgate-Palmolive shares rose approximately 1% in premarket trading.