Shares of Colgate-Palmolive (NYSE: CL) pulled back today after the household products giant missed the mark on the top line in its fourth-quarter earnings report and gave a weak outlook.
As a result, the stock finished the day down 4.6%.
Revenue growth slowed down from earlier in the year as price hikes it had previously implemented rolled off.
Organic sales, which exclude acquisitions, divestitures, and foreign exchange, rose 4.3%, but overall revenue was down 0.1% to $4.94 billion, missing the consensus at $4.99 billion. The strong dollar accounted for the discrepancy as the company generates most of its revenue overseas.
Volume sales in the quarter were up 2.5% with growth in every region, while overall pricing was up 1.8%.
Operationally, the business remained strong with its gross margin rising 70 basis points to 60.3%. It also continued to lead the global toothpaste market with 41.4% and manual toothbrushes with 32.2% global market share.
On the bottom line, base business earnings per share rose from $0.87 to $0.91, which topped expectations at $0.89.
CEO Noel Wallace said the company delivered on its goals of "peer-leading growth while funding investment for future growth and building flexibility into our P&L to counter headwinds."
Currency headwinds weighed on Colgate's guidance as it sees flat revenue for fiscal 2025 on a mid-single-digit negative impact from currency exchange. Organic sales are on track with its long-term target of 3% to 5%. It also called for gross profit margin expansion and low- to mid-single-digit adjusted earnings-per-share growth.
Based on the consensus of $20.39 billion, Colgate's revenue seemed to disappoint, though it's hard to fault the company for currency headwinds.
Given that, the sell-off could be a buying opportunity for income investors.
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