We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Strong Volume & Pricing Aid Colgate's (CL) Q2 Earnings?
Read MoreHide Full Article
Colgate-Palmolive Company (CL - Free Report) is expected to register top and bottom-line growth when it reports its second-quarter 2024 numbers on Jul 26, before the opening bell. The Zacks Consensus Estimate for second-quarter revenues is pegged at $5 billion, indicating a rise of 4.1% from the year-ago quarter’s reported figure.
The consensus estimate for the company’s earnings is pegged at 87 cents per share, suggesting growth of 13% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for earnings for the quarter has been unchanged in the past 30 days.
In the last reported quarter, the company's earnings beat the consensus estimate by 4.9%. It has delivered an earnings surprise of 4.4%, on average, in the trailing four quarters.
Colgate’s second-quarter 2024 results are expected to have benefited from its idea of delivering balanced organic sales growth, with growth in all categories and divisions, and volume and pricing. The company is anticipated to have benefited from solid consumer demand for personal care, hygiene and home care products. CL’s brand strength, coupled with its focus on innovation, premiumization and digital transformation, is likely to have driven its performance in the to-be-reported quarter.
Our model predicts organic sales to increase 7.3% in second-quarter 2024, with growth of 3% in North America, 18% in Latin America, 5% in Europe, 1% in the Asia-Pacific, 14% in Africa/Eurasia and 3% in Pet Nutrition. We expect volume growth of 0.8% and pricing gains of 6.5% for the second quarter.
Additionally, the company has been delivering a sequential rise in the gross margin for the past few quarters, driven by continued strong pricing, benefits from revenue growth management initiatives, strength in the funding-the-growth program, and other productivity initiatives. Continued gains from these initiatives are expected to have led to a gross margin expansion in the to-be-reported quarter.
We expect the gross margin to expand 210 basis points (bps) to 59.9% in the second quarter, with a 7% year-over-year rise in gross profit on a dollar basis.
The leading global consumer products company has been aggressively expanding its faster-growth channels while extending the geographic footprint of its brands. The company’s efforts to improve product availability through enhanced distribution across existing and new markets are likely to have driven its performance in the quarter under review.
However, Colgate has been witnessing headwinds related to continued volume softness in China and the expected headwind from lower private label growth as it transferred more of Hill’s volume into the pet nutrition manufacturing network. The effects of these headwinds are anticipated to slightly mar the company’s top-line performance in the to-be-reported quarter.
Also, higher raw material costs and the inflationary foreign exchange headwinds have been partly offsetting growth in the gross margin. On the last reported quarter’s earnings call, management stated that although it expects the sequential margin improvement trend to continue, growth is likely to be slightly offset by headwinds related to transactional foreign exchange and higher raw material costs.
Additionally, the company has been committed to investing in strategic capabilities like digital, data and analytics, which have been leading to higher SG&A expenses. We expect this trend to have continued into the second quarter of 2024.
We anticipate SG&A expenses to increase 5.6% year over year in the second quarter. As a percentage of sales, SG&A expenses are expected to increase 90 bps year over year to 37.5% in the to-be-reported quarter.
What the Zacks Model Unveils
Our proven model conclusively predicts an earnings beat for Colgate this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Colgate currently has an Earnings ESP of +0.45% and a Zacks Rank of 2.
Stocks With the Favorable Combination
Here are some companies, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.
Ollie's Bargain Outlet (OLLI - Free Report) has an Earnings ESP of +0.18% and sports a Zacks Rank of 1 at present. OLLI is likely to register top and bottom-line growth when it releases second-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $562.4 million, which suggests growth of 9.3% from the figure reported in the year-ago quarter.
The consensus estimate for Ollie's quarterly earnings has been unchanged in the past 30 days at 78 cents per share, suggesting growth of 16.4% from the year-ago quarter’s reported number. OLLI has delivered an earnings surprise of 10.4%, on average, in the trailing four quarters.
Philip Morris International (PM - Free Report) currently has an Earnings ESP of +1.42% and a Zacks Rank of 2. PM is anticipated to register top-line growth when it reports second-quarter 2024 results. The Zacks Consensus Estimate for Philip Morris’ quarterly revenues is pegged at $9.1 billion, indicating growth of 1.8% from the figure reported in the year-ago quarter.
The consensus estimate for Philip Morris’ earnings has moved down by a couple of cents in the past 30 days to $1.55 per share. The consensus estimate suggests a 3.1% decline from the year-ago quarter’s reported figure. PM has delivered an earnings beat of 3.2%, on average, in the trailing four quarters.
Clorox (CLX - Free Report) has an Earnings ESP of +1.51% and a Zacks Rank of 3 at present. CLX is likely to register top and bottom-line declines when it releases second-quarter 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2 billion, implying a decline of 2% from that reported in the year-ago quarter.
The consensus estimate for Clorox’s quarterly earnings has moved up by a penny in the past seven days to $1.54 per share, indicating a decline of 7.9% from the year-ago quarter’s reported number. CLX has a trailing four-quarter average earnings surprise of 128.5%.
Image: Bigstock
Will Strong Volume & Pricing Aid Colgate's (CL) Q2 Earnings?
Colgate-Palmolive Company (CL - Free Report) is expected to register top and bottom-line growth when it reports its second-quarter 2024 numbers on Jul 26, before the opening bell. The Zacks Consensus Estimate for second-quarter revenues is pegged at $5 billion, indicating a rise of 4.1% from the year-ago quarter’s reported figure.
The consensus estimate for the company’s earnings is pegged at 87 cents per share, suggesting growth of 13% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for earnings for the quarter has been unchanged in the past 30 days.
In the last reported quarter, the company's earnings beat the consensus estimate by 4.9%. It has delivered an earnings surprise of 4.4%, on average, in the trailing four quarters.
Colgate-Palmolive Company Price and EPS Surprise
Colgate-Palmolive Company price-eps-surprise | Colgate-Palmolive Company Quote
Key Aspects to Note
Colgate’s second-quarter 2024 results are expected to have benefited from its idea of delivering balanced organic sales growth, with growth in all categories and divisions, and volume and pricing. The company is anticipated to have benefited from solid consumer demand for personal care, hygiene and home care products. CL’s brand strength, coupled with its focus on innovation, premiumization and digital transformation, is likely to have driven its performance in the to-be-reported quarter.
Our model predicts organic sales to increase 7.3% in second-quarter 2024, with growth of 3% in North America, 18% in Latin America, 5% in Europe, 1% in the Asia-Pacific, 14% in Africa/Eurasia and 3% in Pet Nutrition. We expect volume growth of 0.8% and pricing gains of 6.5% for the second quarter.
Additionally, the company has been delivering a sequential rise in the gross margin for the past few quarters, driven by continued strong pricing, benefits from revenue growth management initiatives, strength in the funding-the-growth program, and other productivity initiatives. Continued gains from these initiatives are expected to have led to a gross margin expansion in the to-be-reported quarter.
We expect the gross margin to expand 210 basis points (bps) to 59.9% in the second quarter, with a 7% year-over-year rise in gross profit on a dollar basis.
The leading global consumer products company has been aggressively expanding its faster-growth channels while extending the geographic footprint of its brands. The company’s efforts to improve product availability through enhanced distribution across existing and new markets are likely to have driven its performance in the quarter under review.
However, Colgate has been witnessing headwinds related to continued volume softness in China and the expected headwind from lower private label growth as it transferred more of Hill’s volume into the pet nutrition manufacturing network. The effects of these headwinds are anticipated to slightly mar the company’s top-line performance in the to-be-reported quarter.
Also, higher raw material costs and the inflationary foreign exchange headwinds have been partly offsetting growth in the gross margin. On the last reported quarter’s earnings call, management stated that although it expects the sequential margin improvement trend to continue, growth is likely to be slightly offset by headwinds related to transactional foreign exchange and higher raw material costs.
Additionally, the company has been committed to investing in strategic capabilities like digital, data and analytics, which have been leading to higher SG&A expenses. We expect this trend to have continued into the second quarter of 2024.
We anticipate SG&A expenses to increase 5.6% year over year in the second quarter. As a percentage of sales, SG&A expenses are expected to increase 90 bps year over year to 37.5% in the to-be-reported quarter.
What the Zacks Model Unveils
Our proven model conclusively predicts an earnings beat for Colgate this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Colgate currently has an Earnings ESP of +0.45% and a Zacks Rank of 2.
Stocks With the Favorable Combination
Here are some companies, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.
Ollie's Bargain Outlet (OLLI - Free Report) has an Earnings ESP of +0.18% and sports a Zacks Rank of 1 at present. OLLI is likely to register top and bottom-line growth when it releases second-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $562.4 million, which suggests growth of 9.3% from the figure reported in the year-ago quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Ollie's quarterly earnings has been unchanged in the past 30 days at 78 cents per share, suggesting growth of 16.4% from the year-ago quarter’s reported number. OLLI has delivered an earnings surprise of 10.4%, on average, in the trailing four quarters.
Philip Morris International (PM - Free Report) currently has an Earnings ESP of +1.42% and a Zacks Rank of 2. PM is anticipated to register top-line growth when it reports second-quarter 2024 results. The Zacks Consensus Estimate for Philip Morris’ quarterly revenues is pegged at $9.1 billion, indicating growth of 1.8% from the figure reported in the year-ago quarter.
The consensus estimate for Philip Morris’ earnings has moved down by a couple of cents in the past 30 days to $1.55 per share. The consensus estimate suggests a 3.1% decline from the year-ago quarter’s reported figure. PM has delivered an earnings beat of 3.2%, on average, in the trailing four quarters.
Clorox (CLX - Free Report) has an Earnings ESP of +1.51% and a Zacks Rank of 3 at present. CLX is likely to register top and bottom-line declines when it releases second-quarter 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2 billion, implying a decline of 2% from that reported in the year-ago quarter.
The consensus estimate for Clorox’s quarterly earnings has moved up by a penny in the past seven days to $1.54 per share, indicating a decline of 7.9% from the year-ago quarter’s reported number. CLX has a trailing four-quarter average earnings surprise of 128.5%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.