Colgate-Palmolive Company (NYSE:CL) Q3 2023 Earnings Call Transcript

Colgate-Palmolive Company (NYSE:CL) Q3 2023 Earnings Call Transcript October 27, 2023

Colgate-Palmolive Company beats earnings expectations. Reported EPS is $0.856, expectations were $0.8.

Operator: Good morning. Welcome to today's Colgate-Palmolive Third Quarter 2023 Earnings Conference Call. This call is being recorded and is being simulcast live at www.colgatepalmolive.com. Now, for opening remarks, I'd like to turn this call over to Chief Investor Relations Officer and Executive Vice President, M&A, John Faucher.

John Faucher: Thanks, Allison. Good morning, and welcome to our third quarter 2023 earnings release conference call. This is John Faucher. Today's conference call will include forward-looking statements. Actual results could differ materially from these statements. Please refer to the Q3 2023 earnings press release and related prepared materials, and our most recent filings with the SEC, including our 2022 annual report on Form 10-K and subsequent SEC filings, all available on Colgate's website, for a discussion of the factors that could cause actual results to differ materially from these statements. This conference call will also include a discussion of non-GAAP financial measures, including those identified in tables 4, 6, 7, 8 and 9 of the earnings press release.

A full reconciliation to the corresponding GAAP financial measures is included in the Q3 2023 earnings press release and is available on Colgate's website. Joining me on the call this morning are Noel Wallace, Chairman, President and Chief Executive Officer, and Stan Sutula, Chief Financial Officer. Noel will provide you with some thoughts on our Q3 results and our 2023 outlook, and we will then open it up for Q&A. Noel?

Noel Wallace: Good morning, everyone. I want to give you my thoughts this morning on a very strong quarter of top and bottom-line growth, along with our raised 2023 outlook. As you can see in the materials we published this morning, our strategy is working, and the continued execution of the strategy leaves us well positioned as we look out to the future. We believe this will enable us to deliver balanced organic sales growth going forward, growing in all six divisions, all four of our categories, and with both volume and pricing growth. Organic volume performance improved in the quarter, which we believe puts us on our way towards a return to volume growth. And with the leverage from this balanced growth, along with the global productivity initiative, focused cost containment, and our funding the growth initiatives, we now have multiple points of leverage in our P&L.

This should enable us to deliver consistent operating profit and earnings growth going forward. You can see this in our Q3 results as our gross margin was up both sequentially and year-on-year, driven by sales growth, and overheads were down, driven by logistics. This leverage allowed us to deliver another quarter of double-digit operating profit growth, along with a 23% increase in advertising. Some of our markets remain choppy and the headwinds like foreign exchange and higher interest rates will continue to impact us, but we are leveraging the strength and the global reach of our brands while driving scale advantages through our science-based innovation, digital marketing, revenue growth management, and best-in-class on-the-ground execution.

Our momentum leaves us very well positioned to deliver strong results with compounding top and bottom-line growth as we look to generate consistent long-term value creation for all of our stakeholders. And with that, I'll turn it over to the questions.

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