CL Colgate Palmolive Co

By Anne Steele 

Colgate-Palmolive Co.'s revenue slid more than expected in the most recent quarter, as foreign-currency headwinds dragged down results, particularly in Latin America.

The company, which makes its namesake toothpaste and dish soap, does most of business abroad and has struggled with the stronger U.S. dollar, making products more expensive to overseas consumers.

Chief Executive Ian Cook pointed to strong organic sales growth "in the face of continued challenging macroeconomic conditions world-wide."

However, he said macroeconomic conditions and foreign-exchange volatility remain challenging looking ahead, and the company expects a low- to mid-single-digit sales decline for the year. The company continues to expect adjusted per-share earnings to be flat with 2015.

Sales declines in China offset gains elsewhere in the Asia-Pacific region as Colgate was hit by a slowdown in consumer spending and a rapid shift to online shopping. Mr. Cook said Colgate's online business in China has doubled year-to-date, while sales declines at brick-and-mortar retailers led to a pile up of inventory that hurt the company's results.

He said consumer consumption in China slowed "quite sharply," but is already returning to more normal levels. "That slowdown was compounded by a fairly large structural change," toward online shopping, Mr. Cook said.

For the quarter ended June 30, Colgate earned $600 million, up 4.5% from the same period a year earlier. Revenue fell 5.4% to $3.85 billion in the quarter. Stripping out currency fluctuations, acquisitions, divestments and the impact of the deconsolidation of Colgate's Venezuelan operations, the top line grew 4.5% organically.

Sales in Latin America -- which make up nearly a quarter of the company's revenue -- fell 17%, sales in Asia Pacific were down 7%. Sales rose 2% in North America.

Sharon Terlep contributed to this article.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

July 28, 2016 14:22 ET (18:22 GMT)

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