Colgate-Palmolive Company (NYSE:CL) reported its Q4 and full-year earnings for 2022 on Friday. The company posted its Q4 EPS of $0.77 per share, beating the analyst estimate of $0.76 per share.
The quarterly net sales increased by 5% to $4.6 billion, and the full-year sales number grew by 3% to $17.9 billion. Despite a difficult economic situation, the company posted positive numbers in all four of its segments. The company increased its prices by 12.5% during the year, which has helped it offset the 2.5% decline in volumes.
The company’s star products, its toothpaste and toothbrushes, continued to lead with market shares of 39.8% and 31.7%, respectively.
During the fourth quarter, the gross margin reduced by 250 bps to 55.6%, mainly due to higher raw material costs. The company also incurred higher advertising costs, which led to a decline in operating profits from $365 million in 2021 to $202 million in 2022.
Moving forward, the company is confident about its acquisition of the pet food business and expects its net sales to grow by 2-5% in 2023. It also expects to increase its gross margin and achieve EPS growth in the mid-single digits.
Following the earnings announcement, the stock was trading down by 5.2%.
Colgate-Palmolive is a US-based leading FMCG company dealing in a wide variety of products. The company owns some well-known brands such as Colgate, Palmolive, Softsoap, Protex, Sanex, etc.
Is Colgate-Palmolive a Buy or Sell?
Colgate-Palmolive stock has a Moderate Buy rating on TipRanks, based on three Buy and eight Hold recommendations.
The CL target price is $81.04, which is 13.2% higher than the current trading price.
