Colgate Beats Forecasts Despite US Weakness

05 February 2004

Colgate-Palmolive shrugged off weakness at its core North American business with better-than-expected fourth-quarter results.

The toothcare giant posted earnings of $372.1 million (€297.1m; £202.8m) for Q4, up from $340.9m a year earlier and slightly ahead of analysts' forecasts. Sales surged 6.5% to $2.57bn.

The figures mask a difficult quarter in North America, where Colgate has come under sustained pressure from Procter & Gamble. Indeed, Q4 saw P&G's Crest overtake Colgate as the top-selling US toothpaste for the first time since 1997.

Chairman Reuben Mark admitted the group had failed to focus on its "basic" toothpaste line, concentrating instead on its Simply White gel. However, Colgate vowed to raise toothpaste marketing this year and claims it regained the US top spot from P&G in January.

North American operating profits, hit by raised promotional costs and weak sales of Simply White, tumbled 24% in Q4 as sales slipped 7.5%. However, the group was buoyed by its performance overseas, where revenues were boosted by the weaker dollar. Sales jumped 15% in Europe, 7% in Latin America and 14% in Asia and Africa.

Data sourced from: Financial Times; additional content by WARC staff