Colgate 'pleased' with Q4 results
NEW YORK — Colgate announced on Thursday during the fourth quarter it posted organic sales growth and higher profitability as new launches in the United States helped fuel volume growth.
“We are very pleased to have finished the year with strong, broad-based organic sales growth and higher profitability. Operating profit and net income as a percent to sales both increased versus the year ago period,” said Ian Cook, chairman, president and CEO. “All operating divisions contributed to the 6% organic sales growth, driven by positive unit volume growth and, in most divisions, higher pricing. Organic sales grew 9.5% in emerging markets, despite economic challenges in certain countries.”
During the quarter, worldwide net sales decreased 3% to $4.2 billion. Global unit volume grew 2.5%, pricing increased 3.5% and foreign exchange was negative 9%. Organic sales (net sales excluding foreign exchange, acquisitions and divestments) grew 6%.
Net income and diluted earnings per share in fourth-quarter 2014 were $628 million and 68 cents, respectively. Net income in fourth-quarter 2014 included $71 million ($0.08 per diluted share) in charges.
Net income and diluted earnings per share in fourth-quarter 2013 were $564 million and 60 cents, respectively. Net income in fourth-quarter 2013 included after-tax charges of $133 million.
In North America, which accounts for 18% of company sales, net sales increased 1% in fourth-quarter 2014. Unit volume increased 3% with 1% lower pricing due to increased promotional activities, while foreign exchange was negative 1%. Organic sales increased 2% during the quarter.
In the United States, new product launches are contributing to volume growth. Market share gains year-to-date were seen in manual toothbrushes, powered toothbrushes, mouthwash, liquid cleaners and fabric conditioners. In toothpaste, Colgate Enamel Health, Colgate Optic White, Colgate Optic White Platinum Whiten and Protect, Colgate MaxFresh Cool Scrub and Tom’s of Maine toothpastes had strong sales during the quarter, the company stated.
In manual toothbrushes, market share reached a record 40.5% year-to-date, up 2.4 share points versus the year ago period. This success was driven by strong sales of Colgate Optic White Toothbrush + Built-In Whitening Pen, Colgate 360° Enamel Health, Colgate 360° Optic White and Colgate 360° Total Advanced Floss-Tip Bristles manual toothbrushes, the company noted.
Successful products driving volume growth in the United States in other categories include Colgate Total Lasting White, Colgate Optic White and Colgate Kids mouthwashes, Fabuloso liquid cleaner and Suavitel Fast Dry fabric conditioner.
Cook said, “As we enter 2015, macroeconomic conditions and foreign exchange volatility remain challenging. Despite that, we anticipate another year of solid organic sales growth driven by a full new product pipeline across all categories and geographies. While our long-term goal of double-digit annual earnings per share growth remains unchanged, we continue to see significant deterioration in foreign exchange rates. As a result, we are planning for a year of gross margin expansion and low-single-digit earnings per share growth on a dollar basis, based on current spot rates and excluding charges related to the 2012 Restructuring Program. This earnings per share growth would reflect a double-digit increase on a currency neutral basis.”