Colgate-Palmolive Sales Slump Amid Forex Pressure

By Anne Steele 

Colgate-Palmolive Co. posted a bigger-than-expected decline in sales in the final quarter of the year as the consumer products giant said it contended with worsening foreign exchange challenges that continue to pressure the top line.

Shares, up 4.3% so far this year, lost 3% premarket $66.23.

The company, which makes its namesake toothpaste, dish soap and other consumer products, does most of its business abroad and has struggled with the stronger U.S. dollar, making products more expensive to overseas consumers.

Foreign exchange rates hurt sales by 1.5% in the fourth quarter, while world-wide unit volume fell 5.5%.

But Chief Executive Ian Cook said despite "continued challenging macroeconomic conditions world-wide, foreign currency headwinds accelerating versus expectations, slowing category growth in several key markets, and India's demonetization," the company saw organic sales growth, lifted by emerging markets.

North American sales were flat, while Latin American sales, the company's largest segment that makes up about a fourth of its top line, slumped 11%. Sales in Europe and Asia slipped 7.5% and 4%, respectively, while sales in Africa and Eurasia edged 1.5% lower.

In all for the December period, Colgate-Palmolive reported a profit of $606 million, or 68 cents a share, compared with a loss of $458 million, or 51 cents, a year earlier. Excluding items such as restructuring charges and land sales, per-share earnings rose to 75 cents, matching analysts' forecasts.

Revenue fell 4.6% to $3.72 billion. Analysts polled by Thomson Reuters had forecast $3.87 billion in revenue. Organic sales, which exclude the impact of currency rates and acquisitions, rose 1.5% led by emerging markets where organic sales grew 4.5%.

Gross margin widened to 60.4% from 58.8%.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

January 27, 2017 07:53 ET (12:53 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.