Colgate-Palmolive Co. said its profit slipped in the second
quarter, hurt by significant currency-related headwinds, though
results met expectations.
"As we look ahead, macroeconomic conditions and foreign exchange
volatility remain challenging," Chief Executive Ian Cook said. He
reiterated that while Colgate's long-term goal of double-digit
annual earnings per share growth remains unchanged, "we continue to
see significant deterioration in foreign exchange rates."
Many consumer-product companies that do a large chunk of
business abroad have blamed the stronger U.S. dollar for lackluster
results, as it makes their products more expensive abroad and
diminishes revenue once repatriated. For Colgate, roughly 80% of
revenue is generated abroad.
Colgate has raised prices in recent quarters in an attempt to
offset the hit from foreign exchange. Over the latest quarter,
Colgate—the maker of Lady Speed Stick deodorant, Science Diet pet
food and namesake oral care products—said it raised prices
2.5%.
The company also has been working to cut costs. Colgate brought
down selling, general and administrative expenses by 8.4%. Gross
margin contracted slightly to 58.2% from 58.6% as higher raw and
packaging material costs, thanks to the stronger dollar, offset
other cost reductions and the pricing increases.
In all for the June quarter, the New York company reported a
profit of $574 million, down from $622 million a year earlier.
Per-share earnings declined to 63 cents from 67 cents. Excluding
items, like charges stemming from the company's 2012 restructuring
program, earnings per share slipped to 70 cents from 73 cents.
Revenue declined 6.5% to $4.07 billion. Organic sales—which
strip out currency effects in addition to acquisitions and
divestments—rose 5.5%, Colgate said.
Analysts projected 70 cents in per-share profit and $4.07
billion in sales.
Global volume rose 3%.
Shares in the company, shares about flat this year, were
inactive premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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