Colgate-Palmolive Q1 sales up despite ‘difficult’ COVID-19 environment
Colgate-Palmolive has, however, withdrawn 2020 financial guidance, citing “uncertainty surrounding the business impacts from COVID-19 and related macroeconomic volatility”.
Last week, Colgate-Palmolive reported net sales of €3.75bn ($4.09bn) for the first quarter (Q1) of 2020, up 5.5% on the previous year. Total net income for the quarter sat at €655m ($715m), up 28% on the previous year.
The company’s European division reported the strongest sales rise for the three months ending March 31, excluding pet care, with regional net sales of €618m ($675m), up 12% on the previous year. Growth in Europe was led by strong performances in Germany and the UK and strong sales from Palmolive liquid hand soap and peak market shares of Sanex body wash. Premium innovation on its Total toothpaste brand in the UK had also paid off. Total operating profit for Europe was up 2% at €141m ($154m).
Elsewhere, North America generated a net sales rise of 9% and total operating profit rise of 5%; net sales and operating profit in Asia-Pacific dropped 9.5% and 15, respectively.
Colgate-Palmolive to spotlight science and product claims
“The strong first quarter results reflect the dedication, creativity and courage of our teams on the ground and just how agile we have become,” said Noel Wallace, chairman, president and CEO of Colgate-Palmolive.
Speaking to analysts on the company’s earnings call, Wallace said: “Obviously, we’re operating in a difficult environment and we expect things to stay difficult for some time. But there’s one thing you should know about Colgate-Palmolive and the 34,000 people at the heart of our company – we’re at our best when times are difficult (…) We thrive in difficult times because we are, at the heart, a local company with global brands and strategies and best-in-class execution.”
He did add, however, that government actions, consumer behaviour changes and economic uncertainty ahead would “reduce category growth in many markets” and these uncertainties had led Colgate-Palmolive to withdraw its 2020 financial guidance. Despite this, he said the company was confident in its ability to come out the other side of the coronavirus crisis stronger.
Responding to an analyst’s question, he said Colgate-Palmolive would invest in innovation that highlighted the science behind its health and hygiene products, aligning with current market trends. “We have just a long history of great clinical studies in claims and science behind our products that we think we can pull out of the jaws and use in this current environment.”
Importantly, he said these innovations would be worked on “really, really quickly” and brought to market before the end of 2020, in addition to pre-scheduled product launches.
The company would also continue to heavily invest in e-commerce, he said.
COVID-19 outreach – ‘we have a profound responsibility’
Wallace said Colgate-Palmolive had also responded to the ongoing coronavirus crisis with plenty of outreach and on-the-ground efforts. The company had pledged €18m worth of health and hygiene products worldwide to non-profit organisations, for example, and had kickstarted production of specially packaged soap bars across five manufacturing sites to support the World Health Organisation’s (WHO) #SafeHands campaign. The bars were being made to include instructions on proper handwashing and would be donated as part of the WHO global campaign.
“At Colgate-Palmolive, our very purpose is to advance the health and wellness of people and pets. We recognise we have a profound responsibility – now more than ever – to help protect people,” he said. “…The worldwide COVID-19 pandemic has required all of us to rethink how we interact in the world, how we work and how we live.”