Colgate Q2 Results: Sales Grow, North America Weak
Colgate Q2 results show sales growth and margin expansion; company raised base EPS outlook but warned weak North America demand may dent positioning.
KEY TAKEAWAYS
- Net sales rose 4.9% to $5,361 million and gross margin expanded 140 bps to 61.5%.
- Base Business EPS rose 8% to $0.99 and company raised base EPS growth outlook to mid single digits.
- North America organic sales fell 3.0% on weaker volumes and retailer destocking while Latin America led growth.
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Colgate-Palmolive reported Colgate Q2 results on July 31, 2026, showing companywide sales growth and margin expansion while management said muted North American demand and potential tariff headwinds cloud near-term prospects for investors.
Sales and Margin Gains
For the quarter ended June 30, 2026, Colgate-Palmolive said in a press release that net sales rose 4.9% year over year to $5.36 billion. Organic sales increased 2.4%, including a 0.4% negative impact from lower private-label pet food sales. Reported volume rose 0.9%, with organic volume up 0.8%.
Base Business earnings per share (EPS), a measure adjusted for one-time items, rose 8% to $0.99, driven by Base Business earnings of $797 million. On a generally accepted accounting principles (GAAP) basis, EPS was $0.86, down 5%, and net income fell to $693 million from $743 million a year earlier.
Gross profit margin expanded 140 basis points to 61.5%, reflecting improved reported and adjusted profitability. Through the first six months of 2026, the company generated $1.74 billion in net cash from operations. Free cash flow margin for the quarter was 16.2%, roughly flat with the prior year.
Regional Performance and Guidance
North America, where the Oral, Personal & Home Care division accounts for about 17% of company sales, was the weakest region. Sales fell 3.0% year over year, with organic sales and volume declining 3.0% and 3.9%, respectively. Management attributed the weakness to slower category growth, increased competition, market-share losses, and inventory reductions at key retailers.
Latin America posted the strongest gains, with net sales up 13.7%, organic sales up 5.3%, and volume up 2.6%. Europe, the Middle East, and Africa grew as well, with net sales rising 3.5%, organic sales 2.0%, and volume 3.2%. Management also cited solid contributions from Asia Pacific and emerging markets including India, Brazil, Mexico, and China. Hill’s Pet Nutrition sales increased 3.4% year over year.
The company reaffirmed its full-year 2026 outlook, expecting net sales growth of 2% to 6%, including a low-single-digit positive impact from foreign exchange. Organic sales are projected to rise 1% to 4%. Colgate raised the base of its adjusted earnings outlook to mid-single-digit Base Business EPS growth for the year.
Reported revenue was broadly in line with consensus estimates, while adjusted EPS beat by about $0.04, or roughly 4% to 4.5%. Investors weighed the stronger-than-expected adjusted profit against ongoing North American softness and tariff risks.
