- Emerging Markets Outperform Q4 organic growth of 4.5% driven by Latin America's high single-digit gains in Mexico/Brazil.
- 2026 Guidance Adjusted Organic sales growth projected at 1-4%, with emerging markets expected to outpace developed regions.
- FX Impact in 2026 Low single-digit revenue boost from currency, prioritized for reinvestment in growth initiatives.
- Hill's Strong Performance Underlying volume growth of 2% achieved despite challenging category conditions.
- Balance Sheet Strength Record operating cash flow of $4.2 billion supports reinvestment, dividends, and M&A discipline.
Segment Performance
The company's performance varied across regions, with Latin America standing out with high single-digit growth in Mexico and Brazil. North America, however, presented a tougher picture, although there was an improvement from Q3. The category growth continues to lag, but the company is gearing up with a stronger innovation pipeline for 2026, focusing on driving premium innovation and revenue growth management strategies. Hill's had a strong quarter with 2% volume growth on an underlying basis, despite a challenging category backdrop.
Guidance and Outlook
For 2026, Colgate-Palmolive expects organic sales growth between 1% to 4% and net sales growth between 1% to 4%, with emerging markets anticipated to outperform developed markets. The guidance range is wider than normal to account for various levels of category growth, reflecting the uncertainty in the current environment. The company plans to continue executing its strategy, focusing on investing in growth markets and driving growth through innovation and premiumization.
Valuation
With a P/E Ratio of 25.09 and an EV/EBITDA of 16.62, the market seems to have priced in a certain level of growth and profitability for Colgate-Palmolive. Analysts estimate next year's revenue growth at 3.6%, which is within the company's guided range. The Dividend Yield stands at 2.3%, indicating a relatively stable return for shareholders. The company's strong balance sheet, with low leverage and record operating cash flow of $4.2 billion, supports its ability to invest in the business, return value to shareholders, and engage in disciplined M&A activity.
Strategy and Initiatives
Colgate-Palmolive is focusing on its new 2030 strategy, which includes five key areas: strong brands with global reach, accelerating investment in innovation models, harnessing best-in-class omnichannel demand generation, investing in scale capabilities, and developing a high-impact culture. The company is also optimizing its advertising spend to drive market share and penetration, with a focus on science-driven innovation to drive premiumization and growth across multiple price points.