Colgate-Palmolive Company (NYSE:CL) has reported a stronger-than-expected first quarter after it pushed through double-digit price increases.
The consumer goods company reported an 8.5% increase in sales to $4.77 billion for the three months to March 31, 2023, beating the $4.59 billion expected by Wall Street.
Net income amounted to $372 million, down from $559 million in 1Q 2022. Adjusted earnings per share came in at $0.73, ahead of the $0.70 expected by the Street.
The company noted that its leadership in toothpaste continued with its global market share at 40.2% year to date, while it has a leading global market share of 30.6% in manual toothbrushes.
"Our first quarter results provide further proof that our strategy to accelerate growth is working. We began 2023 with positive momentum, with sequential improvement in net and organic sales growth, gross profit margin, advertising spending, operating profit and free cash flow,” chairman, president and CEO Noel Wallace said in an earnings statement.
“Despite continued pressure from raw and packaging material costs during the quarter, gross profit margin improved sequentially versus fourth quarter 2022, which helped fund a 14% increase in advertising in support of our pricing and robust innovation across all categories.”
The company has guided for full-year sales growth of between 3% and 6%, while earnings per share are expected to rise in the double digits.
"We expect to drive further gross margin improvement in the balance of the year through continued strong pricing and the benefits from funding-the-growth and other productivity initiatives,” Wallace added.
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