Colgate-Palmolive lowered its annual organic sales growth forecast on Friday, signalling that rising economic uncertainty is pushing consumers to cut back even on everyday essentials such as toothpaste and personal care products. The company now expects organic sales to grow 1% to 2% this year, down from its prior expectation at the low end of a 2% to 4% range.
While Colgate raised prices by 2.3% in the third quarter to offset U.S. tariff pressures, volumes slipped 1.9% year-on-year as shoppers turned toward lower-priced alternatives. CEO Noel Wallace noted that consumers in North America, particularly Hispanic households, remain under strain, with discount-seeking increasing and category demand softening. The company also cited pressures from Canada’s “Buy Canadian” movement and weaker demand in markets including Colombia, Central America and India.
Colgate continues to face roughly $75 million in tariff-related costs, driven by imported raw materials such as vitamins and amino acids, while toothpaste for the U.S. market is largely manufactured in Mexico. Higher raw and packaging input costs also weighed on profitability, with adjusted gross margin down 190 basis points to 59.4%.
To defend market share against private-label brands, Colgate has stepped up advertising and marketing efforts. Despite macro pressures, the company reported quarterly net sales of $5.13 billion, in line with expectations, and adjusted earnings of 91 cents per share, above estimates of 89 cents. Shares slipped slightly in morning trade, with analysts noting that investors were already anticipating guidance reductions given recent stock underperformance.
Peer Procter & Gamble delivered stronger results as customers continued paying higher prices for its beauty and hair-care products, underscoring diverging consumer behaviour across categories.
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