Colgate-Palmolive Sales Slump Amid Forex Pressure
January 27 2017 - 8:08AM
Dow Jones News
By Anne Steele
Colgate-Palmolive Co. posted a bigger-than-expected decline in
sales in the final quarter of the year as the consumer products
giant said it contended with worsening foreign exchange challenges
that continue to pressure the top line.
Shares, up 4.3% so far this year, lost 3% premarket $66.23.
The company, which makes its namesake toothpaste, dish soap and
other consumer products, does most of its business abroad and has
struggled with the stronger U.S. dollar, making products more
expensive to overseas consumers.
Foreign exchange rates hurt sales by 1.5% in the fourth quarter,
while world-wide unit volume fell 5.5%.
But Chief Executive Ian Cook said despite "continued challenging
macroeconomic conditions world-wide, foreign currency headwinds
accelerating versus expectations, slowing category growth in
several key markets, and India's demonetization," the company saw
organic sales growth, lifted by emerging markets.
North American sales were flat, while Latin American sales, the
company's largest segment that makes up about a fourth of its top
line, slumped 11%. Sales in Europe and Asia slipped 7.5% and 4%,
respectively, while sales in Africa and Eurasia edged 1.5%
lower.
In all for the December period, Colgate-Palmolive reported a
profit of $606 million, or 68 cents a share, compared with a loss
of $458 million, or 51 cents, a year earlier. Excluding items such
as restructuring charges and land sales, per-share earnings rose to
75 cents, matching analysts' forecasts.
Revenue fell 4.6% to $3.72 billion. Analysts polled by Thomson
Reuters had forecast $3.87 billion in revenue. Organic sales, which
exclude the impact of currency rates and acquisitions, rose 1.5%
led by emerging markets where organic sales grew 4.5%.
Gross margin widened to 60.4% from 58.8%.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
January 27, 2017 07:53 ET (12:53 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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