Investments in innovation, digital transformation, and advertising are factors driving Colgate's top line and bottom line growth. The consumer products company is fresh from reporting impressive Q4 and full-year results helped by stronger consumer demand. Similarly, the company ended, 2020 with another quarter of strong broad-based organic sales growth.
Underlying Growth
Every Colgate division grew mid-single-digit or higher helped by double-digit growth in the Hill’s and Latin American business. While some of the categories continue to benefit from higher consumer demand due to COVID-19, the company has also put the right strategies to ensure continued growth post-COVID and deliver profitable growth.
Strong gross profit performance is also helping fuel the company advertising campaigns that has helped drive sale higher conversely deliver increases in operating profit. Colgate-Palmolive (NYSE:CL) has embarked on aggressive advertising campaigns to support the launch of new products as well as expanded e-commerce activity and strengthened digital engagement.
Colgate Outlook
Based on the current advertising campaigns, Colgate expects net sales to grow by between 4% and 7% in 2021 compounded by low single digital benefit from foreign exchange. Organic sales are also expected to be up by between 3% and 5%. Likewise, Colgate projects gross margin expansion, increased advertising investments, and low to mid-single digital earnings per share growth.
In the fourth quarter sales increased 7.5% to $4.32 billion beating consensus estimates of $4.14 billion. Organic sales were also up by 8.5%, mostly driven by sales in the United States and Canada. The consumer products company reported fourth-quarter earnings of $0.77 a share of a 5% yearly increase. Colgate retained its global leadership with a 39.8% market share on toothpaste and 31.1% on manual toothbrush category.
For the current fiscal first quarter, the company is projecting net sales growth of between 4% and 7% with earnings per share expected to grow by mid-to-high single-digit range on solid consumer spending.