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Introduction & Market Context
Colgate-Palmolive Company (NYSE:CL) presented its second quarter 2025 earnings results on August 1, 2025, reporting modest growth amid challenging global market conditions. The consumer products giant, with a market capitalization of approximately $75.9 billion, saw its stock trading near 52-week lows prior to the earnings release, with premarket trading showing a 0.85% increase to $84.56.
The $20.1 billion global consumer products company, which employs approximately 34,000 people across more than 200 countries, continues to focus on its purpose of "reimagining a healthier future for all people, their pets and our planet" while navigating inflationary pressures and shifting consumer behaviors.
Quarterly Performance Highlights
Colgate-Palmolive reported net sales growth of 1.0% for Q2 2025, with organic sales increasing by 1.8%, including a 0.6% negative impact from lower private label pet sales. Base Business earnings per share rose by 1% compared to the same period last year.
"We are pleased to have delivered another quarter of net sales, organic sales, and earnings per share growth despite difficult global market conditions," said Noel Wallace, Chairman, President, and Chief Executive Officer. "Organic sales growth improved sequentially, despite a greater negative impact from lower private label pet sales."
The company also highlighted a 20 basis point increase in global toothpaste market share on a volume basis year-to-date, demonstrating continued category leadership. Additionally, Colgate-Palmolive completed the acquisition of the Prime100 fresh pet food business on April 30, 2025, further expanding its pet nutrition portfolio.
Looking at the company’s longer-term performance, Colgate-Palmolive has maintained strong organic sales growth over the past several years, with rates of 4.0% in 2019, 7.2% in 2020, 4.4% in 2021, 7.0% in 2022, 8.4% in 2023, and 7.4% in 2024. However, the 2025 guidance suggests a significant slowdown in this growth trajectory.
Updated 2025 Guidance
Colgate-Palmolive has adjusted its 2025 guidance, now expecting organic sales growth to be at the low end of its previously communicated 2% to 4% range. This adjustment includes the impact of the planned exit from private label pet sales over the course of 2025.
The company maintained its other guidance metrics, with gross profit margin still expected to be roughly flat, advertising projected to remain flat as a percentage of net sales and on a dollar basis, and Base Business EPS anticipated to increase by low single digits.
Regarding raw materials, Colgate-Palmolive noted that expectations for underlying raw material cost inflation have risen due to continued increases for fats and oils, particularly palm kernel oil. However, the company revised its estimate for the impact of incremental tariffs from approximately $200 million (as stated in April 2025) to approximately $75 million, based on tariffs announced as of July 31, 2025.
New Productivity Program
A significant announcement in the presentation was Colgate-Palmolive’s new three-year productivity program designed to drive future growth and support the company’s 2030 strategy. The program includes initiatives to improve organizational structure, optimize the global supply chain, and reduce overhead costs.
The company projects that this program will result in cumulative pre-tax charges totaling between $200 and $300 million over the three-year period, once all initiatives are approved and implemented. This strategic move comes as Colgate-Palmolive seeks to enhance operating leverage and cash flow through revenue growth management, strong funding-the-growth savings, and generation of robust operating cash flow to fund dividends and share repurchases.
Product Innovation Strategy
Colgate-Palmolive emphasized its focus on driving growth through science-led, core, and premium innovation across its product portfolio. The presentation showcased numerous product launches and relaunches across global markets, highlighting the company’s commitment to category leadership and premium positioning.
In the oral care category, the company presented its comprehensive "Chair to Sink" whitening portfolio, which spans from everyday products like mouthwash and toothbrushes priced at $4-10 to professional in-office treatments costing approximately $350. This range demonstrates Colgate’s strategy to capture consumers across different price points and usage occasions.
The company also introduced the next generation of its Optic White Overnight Pen, featuring a powerful whitening performance with hydrogen peroxide, a sleek applicator for precision and convenience, automatic dosing, and smooth application. This innovation represents Colgate’s continued investment in the high-margin whitening segment.
In the skincare category, Colgate-Palmolive highlighted EltaMD UV Skin Recovery products, positioned as the #1 dermatologist-recommended and trusted brand. The lightweight, 100% mineral SPF 50 product features patented Skin Barrier Repair Technology and is clinically proven to alleviate symptoms of skin sensitivity, including a 52% reduction in visible redness.
For the pet nutrition segment, the company showcased the Science Diet Core Lifestage Portfolio Relaunch, upgraded with ActivBiome+ Multi-Benefit, a blend of prebiotic fibers and antioxidants that support digestion, immune system, and organ health. The relaunch is supported by strong media promotion with the new leading claim of "Supports long, healthy lives."
Forward-Looking Statements
Colgate-Palmolive’s presentation outlined several strategies for driving operating leverage and cash flow, including revenue growth management to aid pricing as inflationary pricing recedes, strong funding-the-growth savings, and generating robust operating cash flow to fund dividends and share repurchases.
The company’s focus on science-led innovation across its core categories, combined with the new productivity program, suggests a strategic pivot to maintain growth and profitability in a challenging global environment characterized by inflation, shifting consumer preferences, and geopolitical uncertainties.
While Colgate-Palmolive expressed confidence in its ability to navigate these challenges, the lowered organic sales growth guidance and the introduction of a significant productivity program indicate that the company anticipates continued headwinds throughout 2025. Investors will likely be watching closely to see if these strategic initiatives can successfully position the company for stronger performance in the latter part of 2025 and beyond.
Full presentation:
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