Colgate-Palmolive Grew Sales In Every Division, Except for North America — Market Talk

What happened

Colgate-Palmolive's chief executive said sales grew in four of its five divisions in the third quarter. North America was the exception, where net sales fell 1.7% as higher prices could not make up for lower volumes. Company-wide sales rose 4.6%.

Confirmed

Global impact / market context

North America is a large, mature market, so a 1.7% sales drop there means shoppers bought less even as prices rose. The company depended on Latin America, which supplied about 25% of sales and grew 13%, leaving results sensitive to that region.

Analyst inference

Colgate-Palmolive is up 5% premarket. The company said worldwide volume rose 1.7% and pricing added 2%, so sales growth came from both selling more products and charging higher prices.

Confirmed

What to watch

1. Watch whether North America net sales, which fell 1.7% as higher prices failed to offset lower volumes, recover in the next quarter or keep shrinking as shoppers buy less. Confirmed
2. Watch Latin America, about 25% of sales and up 13% on higher volumes and pricing, because slower growth there would remove the main offset to North America weakness and pressure total company sales. Analyst inference
3. Watch the split between volume growth of 1.7% and pricing growth of 2% to see if sales growth comes from selling more products or mainly from raising prices, which can weaken over time. Analyst inference

Evidence

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