Q1 Performance and Outlook: Colgate-Palmolive reported a negative organic sales growth of 3% in Q1 2025 due to weaker consumer demand and macroeconomic uncertainty, with volume growth significantly impacted across categories. The company anticipates continued challenges in Q2 but expects a gradual recovery in the second half of the year as consumer confidence stabilizes, leading to potential normalization of category growth.
Tariff Impact and Mitigation Strategies: The company highlighted a projected incremental impact of $200 million from tariffs in 2025, primarily on raw materials and finished goods from China. Colgate-Palmolive is focusing on productivity improvements, revenue growth management, formulation adjustments, and alternative sourcing to offset these costs, while also having invested approximately $2 billion in its U.S. supply chain over the past five years.
Innovation and Brand Health: Despite current challenges, Colgate-Palmolive remains committed to investing in innovation and maintaining advertising spending at an all-time high. The relaunch of key products like Colgate Total and Hill's Science Diet is expected to enhance brand value, with an emphasis on attracting consumers back to the everyday use categories.