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COLGATE PALMOLIVE CO

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Business Summary

Colgate-Palmolive operates in a highly competitive global omni-channel marketplace that is increasingly defined by the integration of traditional and digital retail operations and evolving consumer purchasing behaviors and preferences, as consumers continue to shop online and increasingly through social commerce and with the assistance of AI. The increased presence of alternative retail channels, such as subscription services and direct-to-customer businesses, has also intensified competition for consumer attention. The Company markets its products in over 200 countries and territories throughout the world, with approximately two-thirds of its Net sales originating in markets outside the United States and approximately 45% of its Net sales coming from emerging markets, which consist of Latin America, Asia (excluding Japan), Africa/Eurasia and Central Europe.

The Company faces vigorous competition worldwide from multinational and local competitors, some of which may have greater resources, as well as from private label brands sold by retailers and new competitors entering via eCommerce and direct-to-consumer channels. The Company is a leader in Oral Care with global leadership in the toothpaste and manual toothbrush categories according to market share data, and a leader in many product categories of the Personal Care market with global leadership in liquid hand soap. The Company's share of the global toothpaste market was 41.3% for the full year 2025, down 0.4 share points from full year 2024, and its share of the global manual toothbrush market was 32.4% for the full year 2025, up 0.4 share points versus full year 2024. Sales to Walmart, Inc. and its affiliates represented approximately 11% of Net sales in 2025.

The Company generates revenue through the sale of well-known consumer products to trade customers under established trading terms, with revenue recognized when control of products is transferred to trade customers. The Company operates in two product segments: Oral, Personal and Home Care; and Pet Nutrition. Oral, Personal and Home Care products are sold primarily to a variety of retailers, wholesalers, distributors, dentists and, in some geographies, skin health professionals. Pet Nutrition products are sold principally through authorized pet supply retailers, veterinarians and eCommerce retailers, and certain products are also sold direct-to-consumer.

Sales of Oral, Personal and Home Care products accounted for 44% , 17% and 16% , respectively, of total worldwide Net sales in 2025. Oral Care products include toothpastes, toothbrushes, mouthwashes and pharmaceutical products for dentists, sold under brands such as Colgate, Darlie, elmex, hello, meridol, Sorriso and Tom's of Maine. Personal Care products include liquid hand soaps, bar soaps, shower gels, deodorants, antiperspirants, skin health products and shampoos, sold under brands such as Palmolive, Protex, Softsoap, Irish Spring, Sanex, Lady Speed Stick, Speed Stick, Tom's of Maine, EltaMD, Filorga and PCA SKIN. Home Care products include dishwashing liquids, household cleaners and fabric conditioners, sold under brands such as Ajax, Axion, Palmolive, Fabuloso, Murphy, Suavitel, Soupline, Fluffy and Cuddly.

Sales of Pet Nutrition products accounted for 23% of total worldwide Net sales in 2025. Through the Hill's Pet Nutrition segment, the Company is a leader in specialty pet nutrition products for dogs and cats, marketed in over 80 countries and territories worldwide under three primary brands: Hill's Science Diet (called Hill's Science Plan in Europe), Hill's Prescription Diet, and Prime100, a leading fresh pet food brand sold in Australia. The Pet Nutrition segment's net sales were $4,613 in 2025, up 2.9% from 2024.

On April 30, 2025, the Company acquired Care TopCo Pty Ltd, the owner of the Prime100 pet food business, for cash consideration of AU $471 (approximately $301 ), providing the Hill's Pet Nutrition segment with an entry into the fast-growing fresh pet food category in Australia. On July 31, 2025, the Board approved a new three-year productivity program, the Strategic Growth and Productivity Program, estimated to result in cumulative pre-tax charges of between $200 and $300 , with substantially all charges to be incurred by December 31, 2028. On March 20, 2025, the Board authorized the repurchase of shares of common stock having an aggregate purchase price of up to $5 billion under a new share repurchase program. During the year ended December 31, 2025, the Company redeemed at maturity $130 of 30-year Medium-Term Notes with a fixed coupon of 7.60% and $500 of three-year Senior Notes with a fixed coupon of 3.10%, and issued $500 of five-year Senior Notes at a fixed coupon rate of 4.20% and €600 of ten-year Senior Notes at a fixed coupon rate of 3.25%.

Worldwide Net sales were $20,382 in 2025, up 1.4% from 2024. Net income attributable to Colgate-Palmolive Company was $2,132 , or $2.63 per share on a diluted basis, in 2025, a decrease from $2,889 , or $3.51 per share on a diluted basis, in 2024. Worldwide Gross profit margin decreased to 60.1% in 2025 from 60.5% in 2024. Operating profit decreased 23% to $3,306 in 2025 from $4,268 in 2024, including goodwill and intangible assets impairment charges of $919 pretax ($794 aftertax) related to the skin health business. Net cash provided by operations increased 2% to $4,198 in 2025 as compared to $4,107 in 2024.

Business Outlook

Management expects global macroeconomic, geopolitical and market conditions to remain challenging, including as a result of inflation, high interest rates, foreign currency volatility and developments in trade relations. The Company expects developments in trade relations, including the imposition of new or increased tariffs by the United States and/or other countries as well as the ongoing implementation and potential renegotiation of the United States-Mexico-Canada Agreement, to continue to contribute to inflationary pressures, geopolitical tensions, macroeconomic and market volatility. The Company expects the softness across its categories that it witnessed in 2025 to continue into 2026. Given that approximately two-thirds of Net sales originate in markets outside the United States, the Company has experienced and will likely continue to experience volatile foreign currency fluctuations, particularly acute in hyper-inflationary economies including Argentina, Nigeria and Türkiye.

The Company's 2030 strategy is intended to accelerate growth through several key initiatives, including leveraging the global reach and penetration of its brands; building the incremental benefit of superior, science-based innovation supported by an agile and resilient supply chain; harnessing the power of best-in-class omni-channel demand generation; leading in capabilities such as data, analytics and AI; and evolving its high-impact, inclusive culture. The Company believes its new 2030 business strategy and the Strategic Growth and Productivity Program will help ensure it has the right capabilities and support to achieve its goals in the near term and deliver consistent compounded earnings per share growth over the long term. The Company continues to prioritize investments in high growth and high margin segments within its Oral Care, Personal Care and Pet Nutrition businesses.

The Company expects to continue experiencing higher raw and packaging material costs, including the impact of transactional foreign exchange. The Company has taken, and will continue to take, measures to mitigate the effect of these conditions, such as its funding-the-growth and revenue growth management initiatives and the Strategic Growth and Productivity Program. However, in the current environment it may become increasingly difficult to implement certain of these mitigation strategies. The Company anticipates consumers may forgo purchasing certain of its products or switch to private label or to its lower-priced product offerings, and demand for and sales volumes of its categories and/or its products may decline or shift from higher margin to lower margin product offerings.

The Company's new three-year productivity program, the Strategic Growth and Productivity Program, includes initiatives to better align the organizational structure to support strategic initiatives, optimize the global supply chain to drive agility and efficiencies, and simplify and streamline the organizational structure to reduce overhead costs. The program is estimated to result in cumulative pre-tax charges of between $200 and $300 , with approximately 75% to 85% of the charges resulting in cash expenditures, and substantially all charges to be incurred by December 31, 2028. The Company's prior targeted productivity program, the 2022 Global Productivity Initiative, concluded on December 31, 2024, resulting in total pretax charges of $228 ($186 aftertax) and total annualized pretax savings of approximately $125 ($100 aftertax).

Capital expenditures for 2026 are expected to be approximately 3.0% of Net sales. The Company continues to focus its capital spending on projects that are expected to yield high aftertax returns. The Company expects cash flow from operations and debt issuances will be sufficient to meet foreseeable business operating and recurring cash needs, including for debt service, dividends, capital expenditures, share repurchases and acquisitions. The Company believes its strong cash generation and financial position should continue to allow it broad access to global credit and capital markets.

On March 20, 2025, the Board authorized the repurchase of shares of common stock having an aggregate purchase price of up to $5 billion under a new share repurchase program. The Company also has authorized share repurchases on an ongoing basis to fulfill certain requirements of its compensation and benefit programs. In the first quarter of 2025, the Company increased the quarterly common stock dividend to $0.52 per share from $0.50 per share previously, effective in the second quarter of 2025. Dividend payments in 2025 were $1,823 , an increase from $1,789 in 2024, and dividends paid increased to $2.06 per share in 2025 from $1.98 per share in 2024.

The Company faces headwinds from uncertain or unfavorable global macroeconomic conditions, including a recession, economic slowdown, inflation, high interest rates and/or reduced category growth rates, including as a result of geopolitical events and tensions, wars and military conflicts such as in Ukraine, the Middle East and Venezuela, and developments in trade relations. The war in Ukraine has had and continues to have a significant impact on operations in Ukraine and Russia, though it has not been material to the Consolidated Financial Statements; for the year ended December 31, 2025, the business in the Eurasia region constituted approximately 1% of consolidated net sales and approximately 2% of consolidated operating profit. The Company also faces risks from the rapidly changing retail landscape, changing consumer preferences, and the substantial growth of eCommerce and the emergence and adoption of social commerce and AI, which have encouraged the entry of new competitors.

The Company faces risks from volatility in material and other costs, as raw and packaging material commodities such as resins, essential oils, tropical oils, pulp, tallow, corn, poultry and soybeans are subject to market price variations. Increases in the costs of and/or a reduction in the availability of commodities, energy, logistics or other necessary services, including as a result of macroeconomic and geopolitical tensions, conflicts and uncertainty, have affected and are likely to continue to adversely affect profit margins. The Company has taken and may continue to take actions to mitigate these cost increases in the form of price increases and efforts to achieve cost efficiencies, but these actions may not fully offset these higher costs.

Risk Factors

The Company faces significant risks from its extensive international operations, with approximately two-thirds of Net sales originating outside the United States, exposing it to foreign currency fluctuations, changing macroeconomic conditions, political instability, and trade policy changes including new or increased tariffs. The war in Ukraine has impacted operations, with the Eurasia region constituting approximately 1% of consolidated net sales and approximately 2% of consolidated operating profit for the year ended December 31, 2025. The Company faces vigorous competition worldwide, including from private label brands and new entrants via eCommerce and AI, and is increasingly dependent on certain key retailers that exercise greater bargaining strength. Volatility in raw and packaging material costs, such as resins, essential oils, tropical oils, pulp, tallow, corn, poultry and soybeans, has adversely impacted and may continue to adversely impact profitability. The Company recorded a non-cash, aftertax impairment charge of $794 in the fourth quarter of 2025 related to the skin health business, reflecting risks associated with acquisitions and the potential for further impairments if category growth rates or performance weaken. The Company is subject to extensive legal and regulatory risks, including talc-related litigation, the outcomes of which are highly uncertain and could result in outsized jury awards.

Management Priorities

Management's message emphasizes that the Company is a caring, innovative growth company united behind its purpose to reimagine a healthier future for all people, their pets and our planet. The key themes are a focus on driving organic sales growth; delivering consistent, compounded earnings per share growth; achieving operational efficiencies; and driving growth in free cash flow along with the efficient use of the balance sheet. Management states that the Company has concluded its 2025 strategic plan, delivering improved organic sales growth, consistent dollar-based earnings per share growth and increased capabilities in areas such as science-led core and premium innovation, digital, data, analytics and AI, despite macroeconomic and geopolitical challenges. The strategic priorities emphasized for the period ahead are leveraging the global reach and penetration of brands; building the incremental benefit of superior, science-based innovation supported by an agile and resilient supply chain; harnessing the power of best-in-class omni-channel demand generation; leading in capabilities such as data, analytics and AI; and evolving the high-impact, inclusive culture. Management believes the new 2030 business strategy and the Strategic Growth and Productivity Program will help ensure the Company has the right capabilities and support to achieve its goals in the near term and deliver consistent compounded earnings per share growth over the long term.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 7, MD&A — Results of Operations
  2. [2] Item 7, MD&A — Results of Operations
  3. [3] Item 1, Business — Distribution; Raw Materials; Competition; Trademarks and Patents
  4. [4] Item 1, Business — Description of the Business
  5. [5] Item 1, Business — Description of the Business
  6. [6] Item 1, Business — Description of the Business
  7. [7] Item 1, Business — Description of the Business
  8. [8] Item 7, MD&A — Results of Operations
  9. [9] Item 7, MD&A — Results of Operations
  10. [10] Item 7, MD&A — Significant Items Impacting Comparability
  11. [11] Item 7, MD&A — Significant Items Impacting Comparability
  12. [12] Item 7, MD&A — Restructuring and Related Implementation Charges
  13. [13] Item 7, MD&A — Restructuring and Related Implementation Charges
  14. [14] Item 5, Market for Registrant's Common Equity — Issuer Purchases of Equity Securities
  15. [15] Item 7, MD&A — Liquidity and Capital Resources
  16. [16] Item 7, MD&A — Liquidity and Capital Resources
  17. [17] Item 7, MD&A — Liquidity and Capital Resources
  18. [18] Item 7, MD&A — Liquidity and Capital Resources
  19. [19] Item 7, MD&A — Results of Operations
  20. [20] Item 7, MD&A — Results of Operations
  21. [21] Item 7, MD&A — Results of Operations
  22. [22] Item 7, MD&A — Results of Operations
  23. [23] Item 7, MD&A — Results of Operations
  24. [24] Item 7, MD&A — Results of Operations
  25. [25] Item 7, MD&A — Gross Profit/Margin
  26. [26] Item 7, MD&A — Gross Profit/Margin
  27. [27] Item 7, MD&A — Operating Profit
  28. [28] Item 7, MD&A — Operating Profit
  29. [29] Item 7, MD&A — Operating Profit
  30. [30] Item 7, MD&A — Goodwill and Intangible Assets Impairment Charges
  31. [31] Item 7, MD&A — Goodwill and Intangible Assets Impairment Charges
  32. [32] Item 7, MD&A — Liquidity and Capital Resources
  33. [33] Item 7, MD&A — Liquidity and Capital Resources
  34. [34] Item 7, MD&A — Liquidity and Capital Resources
  35. [35] Item 7, MD&A — Restructuring and Related Implementation Charges
  36. [36] Item 7, MD&A — Restructuring and Related Implementation Charges
  37. [37] Item 7, MD&A — Restructuring and Related Implementation Charges
  38. [38] Item 7, MD&A — Restructuring and Related Implementation Charges
  39. [39] Item 7, MD&A — Restructuring and Related Implementation Charges
  40. [40] Item 7, MD&A — Restructuring and Related Implementation Charges
  41. [41] Item 7, MD&A — Restructuring and Related Implementation Charges
  42. [42] Item 7, MD&A — Restructuring and Related Implementation Charges
  43. [43] Item 7, MD&A — Liquidity and Capital Resources
  44. [44] Item 5, Market for Registrant's Common Equity — Issuer Purchases of Equity Securities
  45. [45] Item 7, MD&A — Liquidity and Capital Resources
  46. [46] Item 7, MD&A — Liquidity and Capital Resources
  47. [47] Item 7, MD&A — Liquidity and Capital Resources
  48. [48] Item 7, MD&A — Liquidity and Capital Resources
  49. [49] Item 7, MD&A — Liquidity and Capital Resources
  50. [50] Item 7, MD&A — Liquidity and Capital Resources
  51. [51] Item 7, MD&A — Executive Overview
  52. [52] Item 7, MD&A — Executive Overview
  53. [53] Item 7, MD&A — Executive Overview
  54. [54] Item 7, MD&A — Executive Overview
  55. [55] Item 7, MD&A — Significant Items Impacting Comparability
  56. [56] Item 8, Consolidated Statements of Income
  57. [57] Item 8, Consolidated Statements of Income
  58. [58] Item 8, Consolidated Statements of Income
  59. [59] Item 8, Consolidated Statements of Income
  60. [60] Item 8, Consolidated Statements of Income
  61. [61] Item 8, Consolidated Statements of Income
  62. [62] Item 8, Consolidated Statements of Income
  63. [63] Item 8, Consolidated Statements of Income
  64. [64] Item 7, MD&A — Gross Profit/Margin
  65. [65] Item 7, MD&A — Gross Profit/Margin
  66. [66] Item 8, Consolidated Statements of Cash Flows
  67. [67] Item 8, Consolidated Statements of Cash Flows
  68. [68] Item 8, Consolidated Balance Sheets
  69. [69] Item 8, Consolidated Balance Sheets
  70. [70] Item 8, Note 6 — Long-Term Debt and Credit Facilities
  71. [71] Item 8, Note 6 — Long-Term Debt and Credit Facilities
  72. [72] Item 7, MD&A — Significant Items Impacting Comparability
  73. [73] Item 7, MD&A — Goodwill and Intangible Assets Impairment Charges
  74. [74] Item 7, MD&A — Segment Results
  75. [75] Item 7, MD&A — Segment Results
  76. [76] Item 7, MD&A — Segment Results
  77. [77] Item 7, MD&A — Segment Results
  78. [78] Item 7, MD&A — Segment Results
  79. [79] Item 7, MD&A — Segment Results
  80. [80] Item 7, MD&A — Segment Results

Analysis on 6/21/2026