Strong Dollar Hurts Colgate-Palmolive Sales
November 01 2015 - 11:50PM
Dow Jones News
Colgate-Palmolive Co. said its sales slipped 8.7% in the third
quarter, hurt once again by significant currency-related headwinds,
though profit climbed during the period, helped by cost cuts,
increased prices and a more favorable tax rate.
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.
Foreign-exchange volatility had a 13% drag on sales, the company
said.
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 its namesake oral-care products, Lady Speed
Stick deodorant and Science Diet pet food—said it raised prices
3.5%.
The company also has been working to cut costs. Colgate brought
down selling, general and administrative expenses to 33.7% of sales
from 34.2% during the same period a year ago. The effective tax
rate during the latest quarter fell to 31.9% from 38.6% the earlier
year.
Overall, the company posted a profit of $726 million, or 80
cents a share, up from $542 million, or 59 cents a share a year
earlier.
Revenue dropped 8.7% to $4 billion.
Analysts surveyed by Thomson Reuters forecast per-share earnings
of 72 cents a share on revenue of $4.07 billion.
Shares were inactive premarket.
Ezequiel Minaya
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(END) Dow Jones Newswires
November 01, 2015 23:35 ET (04:35 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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