Toothpaste maker Colgate-Palmolive forecast annual sales below Wall Street expectations after missing quarterly sales estimates on Friday.
The company was hurt by weaker demand in North America and Latin America for its household products.
Colgate-Palmolive has seen organic sales growth slow this year due to repeated price hikes which deterred consumer spending on its daily essential products such as toothpaste and pet nutrition.
Customers have been switching to cheaper private label alternatives to save money during a period of high inflation and cost-of-living concerns.
In an effort to contend with competitors, the company has had to ramp up product innovation and investments in advertising and marketing.
The company has also battled lower sales in Latin America as regions such as Argentina, Mexico and Brazil have hurt sales due to an uncertain economy.
On the other hand, peers Procter & Gamble and Kimberly Clark have seen a rise in sales driven by a recovery in demand.
Future
Colgate-Palmolive CEO Noel Wallace said, “Our (sales) guidance includes the impact of the planned exit from private label pet nutrition over the course of 2025.”
The company also said it would work to assess any impact where possible with regards to potential tariffs under new US President Donald Trump.
Shares of the New York-based company, which rose about 14% in 2024, fell about 2% in premarket trading.
The company projects annual sales growth to be flat, compared with analysts’ estimates of a 1.3% rise as per data compiled by the London Stock Exchange Group.
It posted net sales of $4.94 billion for the fourth quarter, compared with analysts’ average estimate of $4.97 billion.
Its overall prices rose 1.8% while volume was up 2.5% in the quarter ending 31 December 2024.
The company’s net sales in Latin America – a major revenue contributing region – fell 7.2% and dropped 1% in North America.
On an adjusted basis, its profit of 91 cents per share beat estimates of 89 cents.
Read More: Kimberly-Clark Forecasts Strong Annual Profit Growth
