Colgate-Palmolive shares fall on Q1 revenue miss

Consumer products company Colgate-Palmolive Co. (CL) witnessed a 3% decline in its shares during the premarket trading, after the company reported a quarterly sales that trailed analysts’ expectations, primarily due to lower demand for its products in its key market — Latin America — as well as other emerging markets. Profit, however, beat analysts’ consensus.

During the first quarter of 2018, the company’s profits came in at $634 million, or $0.72 per share, up from $570 million, or $0.64 per share during the prior-year period. Revenues rose 6.4% to $4 billion. Organic sales witnessed a marginal growth of 1.5%, mainly due to flat volume growth in emerging markets. 

Colgate, which ]makes products ranging from toothpaste to pet food, reported profit margins of 60.2% when compared to 60.3% during first quarter of 2017. 

During the quarter, the slowdown was in Latin America that accounts for 23% of the company’s total sales. Net sales in Latin America fell 0.5% though it maintained its toothpaste leadership in this region. Organic sales in Latin America inched up 0.5%.

On the other hand, North America, which makes up for 21% of the company’s total sales, performed well during the quarter. It reported a 9% growth in sales, while organic sales jumped 5%.

Similar to other consumer product company, even Colgate struggles with sluggish growth in key markets due to a shift in consumers taste. According to analysts, Colgate is losing the battle to more health conscious and eco-friendly companies.