Organic sales, excluding foreign exchange, acquisitions and divestments, grew 6.5%. But net sales in Latin America, which represents about 27% of company sales, decreased 5.0% in first quarter. Net sales increased 2.0% in Europe/South Pacific, which accounts for about 20% of company sales.
The gross profit margin of 58.6% was flat year-on-year as higher raw and packaging material costs offset higher pricing and cost savings.
The company’s CEO said:
We are very pleased to have started the year with strong organic sales growth, building on the momentum we saw in 2013. Operating profit, net income and diluted earnings per share all increased versus the year ago period. All operating divisions contributed to the strong 6.5% organic sales growth, led by the emerging markets where organic sales grew a robust 10.0%. … We expect our growth momentum to continue as we progress through the year. Our 2012 Restructuring Program is on track and proceeding smoothly. We also continue to be sharply focused on our aggressive funding-the-growth programs and our strategic worldwide pricing initiatives.
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The company said it expects “another year of strong organic sales growth and gross margin expansion” for 2014, with EPS to grow 4% to 5% on a dollar basis and “at a double-digit rate on a currency neutral basis.” The consensus estimate for 2013 calls for EPS of $3.00 on revenues of $17.78 billion. For the second quarter, analysts estimate EPS at $0.74 on $4.41 billion in revenue.
Colgate’s brand image has suffered somewhat in the past few years. But analysts still like the company for its geographic diversification and solid dividend.
Colgate shares were down fractionally in premarket trading Friday to $65.87, in a 52-week range of $55.47 to $67.40. Thomson Reuters had a consensus analyst price target of around $67.19 before this report.
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