Colgate-Palmolive 2025 Q3 Earnings EPS Beats Estimates Despite Net Income Decline

Colgate-Palmolive reported fiscal 2025 Q3 earnings on October 31, 2025, with revenue rising 1.9% year-over-year to $5.13 billion. While the company’s adjusted EPS of $0.91 exceeded estimates by $0.02, net income dipped 1.3% to $766 million. The results reflect mixed performance amid pricing pressures and strategic shifts in its pet nutrition segment.

Revenue

Colgate-Palmolive’s total revenue for Q3 2025 reached $5.13 billion, a 1.9% increase from $5.03 billion in the prior-year period. The Oral, Personal, and Home Care segment contributed $3.99 billion, driven by steady demand for oral care products, which account for over 40% of total sales. Meanwhile, the Pet Nutrition segment generated $1.14 billion, benefiting from growth in Hill’s brand specialty pet food. Corporate expenses remained unchanged at $0, aligning with the company’s focus on cost optimization.

Earnings/Net Income

The company’s adjusted EPS rose 1.1% to $0.91, surpassing the $0.89 estimate, while net income fell to $766 million, a 1.3% decline from $776 million in Q3 2024. Despite the net income drop, Colgate-Palmolive has maintained profitability for over 20 consecutive years in this quarter, showcasing operational resilience. The EPS beat highlights effective cost management, though net income pressures underscore challenges in organic sales growth.

Post-Earnings Price Action Review

Colgate-Palmolive’s stock price edged up 1.99% on the day of the earnings report but declined 1.22% for the week and 2.48% month-to-date. The mixed market reaction reflects investor caution amid broader economic uncertainties and the company’s cautious guidance. The inability to backtest a revenue-beat trading strategy stems from insufficient historical data, with only Q3 2025 results available for analysis. A robust backtest would require at least 5-10 quarters of revenue beats/misses to assess long-term performance trends.

CEO Commentary

CEO Noel Wallace emphasized Colgate-Palmolive’s commitment to its 2030 growth strategy, leveraging AI-driven innovation and omnichannel demand generation. He highlighted resilience in emerging markets, where the company derives 45% of sales, and underscored confidence in navigating macroeconomic headwinds through pricing power and operational efficiency.

Guidance

The company reaffirmed its full-year 2025 organic sales growth guidance of 1-2%, citing Q4 improvements from reduced inventory destocking and margin stabilization. Despite challenges like tariffs and inflation, Colgate-Palmolive remains focused on low single-digit EPS growth through strategic productivity programs and AI-driven efficiency.

Additional News

1. Strategic Shifts: Colgate-Palmolive exited non-strategic private label pet sales, impacting Q3 organic sales growth negatively by 0.8%. This move aligns with its focus on high-margin segments like Hill’s.

2. Valuation Metrics: The stock trades near 10-year lows for P/E (21.49) and P/S (3.13), attracting institutional investors despite a 15.8% year-to-date decline. Analysts remain cautiously optimistic, with a target price of $90.4.

3. Financial Health: While the Altman Z-Score of 6.28 and Piotroski F-Score of 7 indicate strong financial stability, insider sell activity over $15 million in the past year raises concerns about governance.

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