Colgate-Palmolive still held back on issuing a 2020 financial guidance, citing continued uncertainty on the business impact of COVID-19 and related macroeconomic volatility.
Last week, Colgate-Palmolive reported net sales of €3.28bn ($3.89bn) for the second quarter (Q2) of 2020, up 1% on the previous year. Total net income for the quarter sat at €569m ($675m), up 8.4% on the previous year. First half (H1) net sales for 2020 tallied up at €6.74bn ($7.99bn), with a total net income of €1.2bn ($1.42bn).
The company’s European division reported a net sales rise of 5% for Q2, though organic sales were down 1.5% largely due to declines in the UK, Germany and Spain. Europe was the only region to report a drop in organic sales for Q2.
Elsewhere, North America reported a net sales surge of 12%, with organic sales up 11%. Colgate-Palmolive reported a 13.5% net sales declines in Latin America, with organic sales up 4.5%; net sales were down 6% in Africa/Eurasia but organic sales up 2.5%; and in Asia Pacific there was a dip of 3% in net sales and rise of 0.5%.
Demand for Colgate-Palmolive products ‘remains solid’
Noel Wallace, chairman, president and CEO of Colgate-Palmolive, said: “Our momentum continued in the second quarter, despite the many challenges brought on by the global COVID-19 pandemic, including government actions to stem the spread of the virus.”
Speaking to investors on the company’s earnings call last week, Wallace said Colgate-Palmolive delivered “very strong organic sales growth” above its long-term target.
“Underlying demand for our products remains solid, particularly in certain categories like liquid hand soap and dish soap, bar soap and cleaners – those with a health and hygiene orientation to them,” he said. Oral care demand dropped slightly in Q2 versus Q1, he said, though Optic White Renewal – its highest price point toothpaste in the US – had been “a great success”.
Responding to an analyst’s question during the call, Wallace said Colgate-Palmolive believed elevated demand in soaps and other products with a health and hygiene focus would continue “as behaviours change and people work from home”.
European ‘softness’ related to pantry destocking
John Faucher, chief investor relations officer at Colgate-Palmolive, said the “softness” seen in the European market was related to consumers destocking their pantry during the quarter.
“We planned for this weakness in Q2 and have shifted our marketing plan to take advantage of what we expect to be improved category growth in the second half of the year as we believe consumers are well along in this destocking process,” he said.
Coglate-Palmolive would continue to invest in advertising and marketing strategies, focused on a strong omni-channel moving forward, he said.