Colgate-Palmolive lowers annual forecast as wary shoppers pull back amid economic jitters
By Felicia Nwosu
Colgate-Palmolive has scaled down its full-year earnings expectations, pointing to growing economic unease that is making consumers rethink their spending on everyday essentials like toothpaste and soap. Chief Executive Officer Noel Wallace, speaking on a recent earnings call, said the mood among shoppers has shifted as people hold off on stocking up, choosing instead to buy only what they immediately need.
“Anxious times breed cautious behavior,” Wallace noted, explaining that consumers are limiting discretionary purchases and trimming pantry inventories, avoiding that extra bottle of body wash or spare tube of toothpaste. The maker of well-known brands such as Ajax and Softsoap has adjusted its projections, now expecting earnings to rise only in the low-single digits, down from the mid-single-digit growth forecast shared earlier in January.
Finimize reported that the company also flagged tariffs as a mounting pressure point, estimating they will add about $200 million in costs this year. These tariff impacts, combined with unfavorable currency spot rates, weighed heavily on the revised outlook. Wallace said that although the firm had anticipated a modest slowdown in 2025 following high inflation, February brought a sharper-than-expected dip in store traffic and sales across North America, fueled in part by stock market turbulence.
Despite these challenges, Wallace expressed optimism that demand would eventually rebound, noting that April sales hinted at a slight recovery. He emphasized that while consumption patterns have softened, Colgate-Palmolive’s products remain staples that customers cannot forgo for long. However, he admitted that much remains uncertain, particularly regarding how trade policies will unfold in the coming months.
Organic sales growth is now projected between 2% and 4%, a notch lower than the earlier 3% to 5% target. Gross profit margins are expected to hold steady as a share of sales, backtracking from hopes of a slight margin expansion. Chief Financial Officer Stanley Sutula stressed that predicting how the rest of the year will unfold is difficult, and that the company is preparing for a variety of possible demand scenarios.
In the first quarter, Colgate-Palmolive reported a net income of $690 million, or 85 cents per share, compared with $683 million, or 83 cents per share, a year earlier. Stripping out one-time items, adjusted earnings landed at 91 cents per share, topping Wall Street’s estimate of 86 cents. Revenue slipped 3% to $4.91 billion but still surpassed analysts’ expectations of $4.87 billion.
Regionally, Europe stood out as the lone bright spot with a 2.5% sales increase. Meanwhile, revenue in Latin America and Asia Pacific fell by 8.7% and 5%, respectively, and North America recorded a 3.6% dip. Within its product lineup, the Hill’s pet nutrition division continued to perform well, registering a 1.5% sales boost even as the broader consumer portfolio declined by 4.3%.
Colgate-Palmolive’s leadership remains cautious yet hopeful, aiming to steer through the year’s volatility while keeping a close watch on evolving consumer habits and the global economic landscape.
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