tapebrief
CL · Q3 2025

CL · Q4 2025 Earnings

Cautious

Colgate-Palmolive

Reported January 30, 2026

30-second summary

Colgate closed FY25 with 1.4% organic growth — at the low end of the cut 1-2% guide — while Q4 organic printed 2.2% (above 3% underlying ex-private-label per management). FY25 met, but did not beat, the lowered bar. The FY26 guide is the story: 1-4% organic and low-to-mid-single-digit Base Business EPS growth, a "wider than normal" range that management explicitly attributed to uncertainty about category growth. The narrative has flipped from "reaccelerate growth" (Q3) to "difficult operating environment and slower category growth to continue in the short term" — a multi-year reset dressed as a new 2030 strategy.

Headline numbers

EPS

Q4 FY2025

$0.95

Revenue

Q4 FY2025

$5.23B

+5.8% YoY

Gross margin

Q4 FY2025

60.2%

Operating margin

Q4 FY2025

1.8%

Key financials

Q4 FY2025
MetricQ4 FY2025YoYQ3 FY2025QoQ
Revenue$5.23B+5.8%$5.13B+1.9%
EPS$0.95—$0.91+4.4%
Gross margin60.2%—59.4%+80bps
Operating margin1.8%—20.6%-1880bps

Guidance

FY2025 results met qualitative guidance; FY2026 guidance introduced with 2–6% net sales growth and low to mid-single-digit EPS growth, signaling cautious outlook amid difficult operating environment.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
Net Sales GrowthFY2025up low single digits1.4%in-lineMet
Organic Sales GrowthFY20251% to 2%2.2%+0.2 to +1.2pts above high endMet
Gross Profit MarginFY2025roughly in line with year-to-date 60.1%60.1%in-lineMet

New guidance

MetricPeriodGuideYoY
Net Sales GrowthFY20262% to 6%—
Organic Sales GrowthFY20261% to 4%—
Gross Profit Margin ExpansionFY2026expansion expected—
Base Business EPS GrowthFY2026low to mid-single-digit growth—

Segment performance

Q4 FY2025
SegmentQ4 FY2025YoY
Hill's Pet Nutrition$1.196B+4.9%

Platform metrics

Q4 FY2025
SegmentQ4 FY2025
Colgate Toothpaste Global Market Share (YTD)41.3%
Colgate Manual Toothbrush Global Market Share (YTD)32.4%
Organic Sales Growth2.2%
Advertising Spend (Q4)$682M

Profitability

Q4 FY2025
SegmentQ4 FY2025
Base Business Operating Margin21.2%

Other KPIs

Q4 FY2025
SegmentQ4 FY2025YoY
Oral, Personal and Home Care - North America$1.021B-1.5%
Oral, Personal and Home Care - Latin America$1.248B+12.8%
Oral, Personal and Home Care - Europe$0.734B+9.8%
Oral, Personal and Home Care - Asia Pacific$0.722B-0.3%
Oral, Personal and Home Care - Africa/Eurasia$0.309B+15.0%

Management tone

Q1-25 RGM-led pricing playbook → Q2-25 elasticity ceiling + restructuring → Q3-25 "2030 strategy transition" reframe → Q4-25 wider-than-normal guidance and acceptance of low-category-growth persistence.

Three quarters ago management was defending a 2-4% organic algorithm and arguing pricing could carry the load. Last quarter the diagnosis broadened to a category problem and the language shifted to "well positioned to reaccelerate growth despite uncertainty." This quarter the reacceleration narrative is gone. The verbatim shift is stark: "While category growth may have stabilized, growth rates remain low. This is difficult in and of itself, but also could lead to higher levels of promotion." Stabilization is no longer good news — it's the base case for slower-for-longer, with promotional risk on top. The bar moved from "outperform a slowing category" (Q3) to "navigate a stabilized-low category that may force promotional intensity" (Q4).

The guidance-range widening is itself the tone signal. Management explicitly said: "Because of this uncertainty, we're giving a wider range than normal in our net sales and organic sales growth guidance." Colgate is a company that historically prides itself on narrow guidance ranges and consistent delivery. A 3-point organic range (1-4%) is wider than any FY guide in recent memory and is a direct admission that management does not have conviction on the demand outcome. Paired with "we're not building in a big rebound," the asymmetry is now skewed to the downside of the range.

The 2030-strategy framing has hardened into a multi-year reset. Last quarter the language was "the timing to be kicking off our 2030 strategy could not be better"; this quarter it is "we are confident that the changes we are making will enable us to deliver consistent, compounded earnings per share growth and drive shareholder value in the long term." The repeated qualifier "long term" is doing real work — the implicit concession is that near-term EPS growth at low-to-mid-single-digits is below the historical algorithm and that recovery is multi-year.

FX framing is the most defensive shift. Management's own line — "Foreign exchange is favorable right now, but has been a negative impact for eight of the past 10 years" — is a pre-emptive defense against the market interpreting the low-to-mid-single-digit EPS guide as weak given the FX tailwind. The subtext: don't extrapolate the FX benefit, and don't expect the constant-currency EPS algorithm to look better than the guide implies.

Recurring themes management leaned on this quarter:

Transition from 2025 to 2030 strategic frameworkOperating model resilience and flexibility amid volatilityInvestment in innovation, omnichannel, and digital/AI capabilitiesEmerging markets outperformance vs developed marketsUncertainty and low category growth rates persisting into 2026Productivity and margin expansion initiatives offsetting inflation

Risks management surfaced:

Low category growth rates potentially driving higher promotion and competitive activityForeign exchange volatility despite current favorabilityGeopolitical environment and tariff uncertainty, particularly in Latin AmericaU.S. market remaining sluggish with uncertain trend improvementRaw material inflation and cost pressures

Q&A highlights

Dara Mosinian · Morgan Stanley

Seeking perspective on category growth within 1-4% OSG guidance for 2026, regional performance, market share positioning, and how FX benefits will flow through the P&L versus top-line growth.

Management indicated category growth has stabilized at 1.5-2.5% (below historical levels), with North America volume pressures being acute. Noel stated guidance reflects: low end if categories worsen, middle if stable, high end if strengthen. Stan confirmed FX is low single-digit benefit to revenue (first half focused), to be deployed as business model flexibility for investment and bottom-line contribution, managed through RGM and pricing.

1% to 4% OSG guidance for 2026Category growth stabilized at 1.5-2.5%Q4 organic (ex-private label) exceeded 3% on underlying basisFX benefit estimated at low single-digit to 2026 revenue, primarily H1

Peter Grom · UBS

Asked about Hills strong volume performance despite tough category backdrop, where outperformance came from, areas of weakness, and ability to sustain outperformance.

Noel attributed Q4 strength to 2% underlying volume growth (ex-private label's -360bps impact), broad-based gains across strategic segments, therapeutic/prescription diet as major driver with improved share, and science-based innovation strategy. Called out dry product softness but noted strength in super-premium, gained shelf space, improved supply chain flexibility from Tonganoxie plant ramp.

Hills volume growth 2% on underlying basis, ex-private labelPrivate label was -360bps headwind to volumeTherapeutic/prescription diet growing 'very, very nicely'Volume improved on two-year stack basis

Rob Ottenstein · Evercore

Inquired about learnings from successful Colgate turnaround in China and transferability to Holley and Hazel, and whether those learnings extend beyond Asia to the US.

Noel described sending key leaders/marketing directors to China for immersions in omni-demand generation strategies combining brick-and-mortar and e-commerce. Holley and Hazel is now replicating this approach with new dual-chamber technology super-premium product launch online showing great uptake. Made structural changes to position business for e-commerce evolution while leveraging existing downscale distribution.

Colgate China team deployed omni-demand generation strategy combining brick-and-mortar and e-commerceLeadership immersion program active across regionsHolley and Hazel launched dual chamber technology super-premium product online with 'great uptake'Significant structural changes made to Holley and Hazel business model

Bonnie Herzog · Goldman Sachs

Asked why A&P spend is increasing in 2026 despite challenged consumer backdrop and lower category growth; clarified intent (market share vs. category building) and flexibility to pull back if needed for EPS targets.

Noel indicated Q4 saw prudent scaling back of advertising due to category headwinds, but dollar spend was up 5% YoY despite % of sales being down. Emphasized shift to omni-demand generation efficiency, focusing on high-ROI spend in strategic brands/regions. Stated focus on optimization rather than absolute increases, but certain brands/regions will benefit from increased advertising for both share and category growth.

A&P as % of sales down slightly in Q4A&P spend up 5% in dollar terms YoY in Q4Deployment of omni-demand capabilities for improved spend efficiencyFocus on select brands and regions for incremental A&P investment

Filippo Filorni · Citi

Asked about emerging markets' strong Q4 performance, specifically Latin America and Africa/Eurasia; sought detail on macro conditions in Brazil/Mexico and balance of pricing vs. volumes as FX tailwinds continue.

Noel reported emerging markets grew ~4.5% organic with good price/volume balance. Latin America very strong (high single digits in Mexico and Brazil, strong growth across 3 categories), though some regions still challenged by competition. Noted FX helped in short term but volatility remains. Emphasized continued pricing ability given brand strength and inflation (especially fats/oils). Middle market being squeezed while super-premium and value grow; need multi-price-point innovation.

Emerging markets ~4.5% organic growth in Q4Latin America: Mexico and Brazil up high single digitsStrong growth across all three categories in Latin AmericaFX tailwind in short term but volatility expected

Answers to last quarter's watch list

Whether Q4 organic growth hits at least 1.5% — Cleared. Q4 organic printed 2.2% directly per press release, above the 1.5% threshold. FY organic landed at 1.4%, at the low end of the 1-2% cut guide. The cut guide held, no second cut required.
Resolved positively
Volume trajectory. Improved meaningfully. Hill's underlying volume turned positive at +2% ex-private-label, Latin America accelerated to +12.8% revenue, and management reported emerging markets at "good price/volume balance." Total Company Q4 organic volume was flat (0.0%) per Table 6, a material improvement from Q3's -1.9%.
Resolved positively
Q4 gross margin recovery to ~60%+. Cleared at 60.2% Q4 / 60.1% FY, matching the cut guide exactly. No explicit margin bridge with raw material flow-through quantification was provided in the release.
Resolved positively
Hill's ex-private label growth. Hill's headline +4.9% with +2% underlying volume ex-PL per Noel — implying ex-PL organic comfortably above the 3% watch threshold and a rebound from Q3's 2.5%. Therapeutic strength and Tonganoxie supply flexibility are credible drivers into FY26.
Resolved positively
Colgate Total relaunch share recovery quantification. Latin America revenue +12.8% (vs +2.0% in Q3) with Mexico and Brazil each up high single digits indicates the relaunch is working, but specific share-recovery data points by market were not disclosed. The Q3 150bp drag appears to have reversed, but precise share quantification was not provided.
Continue monitoring
2030 strategy quantification. Did not happen on this print. Management referenced "consistent, compounded earnings per share growth" and "long term" multiple times but did not disclose a medium-term organic/margin/EPS algorithm. The FY26 guide (1-4% organic, low-to-mid-single-digit EPS) is below the historical 3-5%/MSD-HSD framework — suggesting the algorithm has effectively reset downward without being formally restated.
Not resolved

What to watch into next quarter

Q1-26 organic growth and where it lands within the 1-4% range. Management's own conditional framing means Q1 sets the implied trajectory: a sub-1.5% print would push FY toward the low end and likely trigger another guide narrowing.

A&P quantification. Management committed to A&P up in both dollar and percentage terms for FY26 but did not size it. The Q1 print should reveal the magnitude of step-up and which brands/regions are receiving it. A 100bps+ increase as % of sales would meaningfully tighten EPS algebra.

North America trajectory. -1.5% Q4 is a slight worsening from Q3 and the US remains "sluggish" per management. Watch whether Q1 returns to flat/positive or if NA volume continues to deteriorate — this is the single largest unresolved geographic question.

Promotional intensity. Management explicitly flagged that stabilized-low category growth "could lead to higher levels of promotion." Watch competitor pricing actions and Colgate's price/volume mix — if price rolls toward 0-1% while volume struggles to follow, the FY26 organic math breaks.

Hill's underlying growth ex-private-label post-July-2025 production cessation. The 80-90bps quarterly private-label drag continues into H1-26 lapping. Watch whether ex-PL Hill's holds the +2% volume / +4-5% organic pace as therapeutic momentum and Tonganoxie flexibility scale.

FX deployment evidence. Management said FX benefit will be deployed between investment and bottom-line. Watch whether constant-currency EPS growth comes in below the headline low-to-mid-single-digit guide — that would confirm the FX tailwind is propping the print and the underlying algorithm is weaker than disclosed.

Sources

  1. Colgate-Palmolive Q4 2025 Press Release Tables, filed via SEC EDGAR — https://www.sec.gov/Archives/edgar/data/21665/000002166526000003/a4q2025pressreleasetables.htm
  2. Colgate-Palmolive Q4 2025 earnings call commentary (management prepared remarks and Q&A)

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