), a global dealer in consumer goods, reported first-quarter 2013
adjusted earnings of 68 cents per share. This was in line with
the Zacks Consensus Estimate and up 3.0% from the year-ago
quarter's adjusted earnings of 66 cents per share.
Global sales of $4,325 million were almost flat as compared
with the prior-year figure of $4,215 million, as the benefit from
5% growth in volume and 1.5% rise in prices was fully offset by a
negative foreign exchange rate of 6.5%. Moreover, quarterly
revenues missed the Zacks Consensus Estimate of $4,342
On an organic basis (excluding foreign exchange, acquisitions
and divestitures), the company recorded sales growth of 6.5%.
Adjusted gross profit margin remained flat at 58.6% year over
year, as the benefit from cost saving initiatives under
funding-the-growth and 2012 Restructuring Program and higher
pricing were fully offset by increased raw material and packaging
Adjusted selling, general and administrative (SG&A)
expenses, as a percentage of revenues, fell 10 basis points (bps)
to 35.3% from the year-ago quarter. The decline was mainly
due to lower overhead costs, partially offset by higher
advertising investment, both as a percentage of sales.
In the quarter, adjusted operating profit of $1,033 million
increased 2% from $985 million from the year-ago period.
Consequently, operating margin improved 40 bps to 23.2%.
On a year-to-date basis, Colgate-Palmolive's market share of
global toothpaste and manual toothbrushes reached 44.3% and
33.1%, respectively. Additionally, the company's mouthwash
business made significant progress, with its global market share
reaching a record of 17.3% in the year-to-date period, a 60 bps
improvement from the comparable period in 2013.
sales (18% of total sales) rose 2.5% in the quarter, driven by a
4.5% rise in unit volume, partly offset by the negative impact of
1% each from lower pricing and foreign exchange. On an organic
basis, sales increased 3.5%.
The segment's operating profit remained flat year over year at
$216 million while operating margin contracted 60 bps to 27.5%.
The year-over-year decline in operating profit margin was chiefly
due to lower gross profit margin and higher SG&A expenses as
a percentage of net sales.
sales (27% of total sales) declined 5% year over year, as the
benefit of a 6.5% increase in pricing and 4.5% unit volume growth
was more than offset by a negative foreign exchange impact of
16.0%. Volume gains were most prominent in Venezuela, Brazil,
Mexico and Colombia. On an organic basis, sales increased
Operating profit decreased 7% to $290 million while as a
percentage of sales, it contracted 50 bps to 25.2% primarily due
to a decline in gross profit margin, which was partially offset
by lower SG&A expenses as a percentage of sales.
sales (20% of total sales) grew 2% year over year, primarily
benefiting from a 3.5% rise in unit volume and a 1% positive
impact from foreign exchange. However, these were partially
offset by a 2.5% fall in pricing. Volume gains were primarily led
by the United Kingdom, Australia, France and Poland. Organic
sales for the region were down 1.5%.
Operating profit increased 9% year over year to $217 million.
Furthermore, the operating profit margin in the region expanded
150 bps to 25.1% primarily attributable to higher gross profit
margin, partially offset by increased SG&A expenses as a
percentage of sales.
sales (15% of total sales) climbed 2.5%, with a 7% increase in
unit volume and a 0.5% rise in pricing. These were partially
offset by a 5% negative impact from foreign currency. Volume
growth was primarily led by gains in India, the Greater China
region, Malaysia and the Philippines. On an organic basis, sales
Operating profit rose 4% to $193 million. Operating margin
expanded 30 bps to 28.7%, on account of improved gross
sales (7% of total sales) dropped 0.5% year over year due to a
10.5% negative impact from foreign currency exchange, which more
than offset the benefit of 9.5% growth in unit volume and 0.5%
increase in prices. Volume gains were primarily led by Russia,
South Africa, Turkey and the Central Asia/Caucasus region.
Organic sales for the region rose 10%.
Operating profit decreased 5% year over year to $59 million in
the quarter while as a percentage of sales, it contracted 90 bps
to 19.8%. The decrease was mainly due to lower gross profit
margin, partially offset by fall in SG&A expenses as a
percentage of sales.
Hill's Pet Nutrition
sales (13% of total sales) grew 3.5%. Unit volume increased 3.5%
due to volume gains in the U.S., Russia, France and Japan, partly
offset by volume declines in Canada. Pricing had a 2% positive
impact on sales growth while foreign exchange negatively impacted
sales by 2%. On an organic basis, sales rose 5.5% from the
Operating profit improved 6% to $144 million, while operating
profit margin expanded 50 bps to 26.0%. The rise in operating
margin was due to reduced SG&A expenses as a percentage of
net sales partially offset by lower gross profit margin.
Other Financial Details
Colgate-Palmolive, which competes with
The Procter & Gamble Co.
), ended the quarter with cash and cash equivalents of $1,795
million, total debt of $6,659 million and shareholders' equity of
$1,630 million. Net cash provided by operating activities came in
at $820 million for the period.
Looking ahead, Colgate-Palmolive anticipates the growth
momentum to continue throughout 2014 as it remains on track with
its global restructuring program. Further, the company's
increased focus on funding-the-growth programs and strategic
worldwide pricing endeavors should help boost its bottom
Other Stocks to Consider
Currently, Colgate-Palmolive carries a Zacks Rank #3 (Hold).
However, some other better-ranked stocks in the consumer staples
International Flavors & Fragrances Inc.
). Both of these have a Zacks Rank #2 (Buy).
COLGATE PALMOLI (CL): Free Stock Analysis
COTY INC-A (COTY): Free Stock Analysis Report
INTL F & F (IFF): Free Stock Analysis
PROCTER & GAMBL (PG): Free Stock Analysis
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