Strong Dollar Hurts Colgate-Palmolive Sales

Colgate-Palmolive Co. said its sales slipped 8.7% in the third quarter, hurt once again by significant currency-related headwinds, though profit climbed during the period, helped by cost cuts, increased prices and a more favorable tax rate.

Many consumer-product companies that do a large chunk of business abroad have blamed the stronger U.S. dollar for lackluster results, as it makes their products more expensive abroad and diminishes revenue once repatriated. For Colgate, roughly 80% of revenue is generated abroad.

Foreign-exchange volatility had a 13% drag on sales, the company said.

Colgate has raised prices in recent quarters in an attempt to offset the hit from foreign exchange. Over the latest quarter, Colgate—the maker of its namesake oral-care products, Lady Speed Stick deodorant and Science Diet pet food—said it raised prices 3.5%.

The company also has been working to cut costs. Colgate brought down selling, general and administrative expenses to 33.7% of sales from 34.2% during the same period a year ago. The effective tax rate during the latest quarter fell to 31.9% from 38.6% the earlier year.

Overall, the company posted a profit of $726 million, or 80 cents a share, up from $542 million, or 59 cents a share a year earlier.

Revenue dropped 8.7% to $4 billion.

Analysts surveyed by Thomson Reuters forecast per-share earnings of 72 cents a share on revenue of $4.07 billion.

Shares were inactive premarket.

Ezequiel Minaya

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(END) Dow Jones Newswires

November 01, 2015 23:35 ET (04:35 GMT)

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