Colgate, which makes products ranging from toothpaste to pet food, reported profit margins of 59.2% when compared to 60.1% during the second quarter of 2017. Adjusted gross margin fell by 140 basis points as higher raw and packaging material costs were partially offset by cost savings from funding-the-growth initiatives.
During the quarter, Latin America that accounts for 24% of the company’s total sales slowed down. Net sales in Latin America fell 7% though it maintained its toothpaste leadership in this region. Organic sales in Latin America inched down 1.5%.
On the other hand, North America, which makes up 21% of the company’s total sales, performed well during the quarter. Sales grew 8% in the region, while organic sales rose 2%.
Looking ahead into fiscal 2018, Colgate-Palmolive expects a year of higher operating cash flow, modestly lower gross margin, higher advertising investment, and mid-single-digit EPS growth. Previously, the company had expected a low double-digit EPS growth for the full year.
Shares of Colgate ended Thursday’s regular trading session up 1.50% at $66.94 on the NYSE and have dropped 11% year-to-date and 8% in the past 52-weeks.
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