Colgate-Palmolive raised its forecasts for annual profit and organic sales on Friday after beating second-quarter estimates on resilient demand for its high-priced products.
The toothpaste maker saw organic sales in the Latin American market – a major revenue-generating region – jumped 18.8% in the quarter.
This was an increase on the 16% rise a year earlier.
Increased investments in advertising also helped the company counter rising competition from lower-priced private labels.
Consumer packaged goods companies such as Colgate-Palmolive and Kimberly-Clark have reported a rise in sales volumes on steady demand in spite of consecutive price hikes.
Higher product prices also helped Colgate-Palmolive counter rising raw materials and packaging costs, expanding gross profit margins by 280 basis points to 60.6% during the quarter.
Colgate-Palmolive expects annual profit growth between 8% and 11% compared with a previous forecast of mid-to-high single digits.
It projected organic sales growth to be between 6% and 8%, up from its previous expectations of 5% to 7%.
Colgate-Palmolive’s product prices rose 4.2% in the second quarter as its organic volumes jumped 4.7%.
Organic sales previously dipped 3% in the same quarter last year.
The company posted a quarterly adjusted profit of 91 cents per share, compared with analysts’ estimate of 87 cents, according to London Stock Exchange Group data.
Its net sales of $5.06 billion beat estimates of $5.01 billion.
Speaking about the results, chief executive of the company Noel Wallace said, “The strong levels of investment should continue in the balance of the year as we focus on building brand health and scaling the capabilities needed to drive growth in both the short and long term.”
Colgate-Palmolive’s shares rose about 1% in premarket trading.
Read More: Reckitt To Offload Homecare Brands And Consider Nutrition Business
