Colgate-Palmolive Stock Plunges as Sales Miss and Guidance Disappoints

Colgate-Palmolive Company (NYSE: CL) shares tumbled 5.13% to $86.23 on January 31, 2025, marking the lowest close since April 16, 2024, when it closed at $86.17. The stock's decline can be attributed to a combination of factors, including missed revenue forecasts, weak guidance, and the impact of foreign exchange rates on sales and earnings.

Colgate-Palmolive reported fourth quarter and full-year 2024 results that fell short of expectations. Net sales of $4.94 billion remained relatively unchanged from the prior-year quarter, and organic sales growth of 4.3% failed to meet analysts' projections. Net income attributable to Colgate-Palmolive Company rose to $739 million, or $0.90 per share, from $718 million, or $0.87 per share, last year. Adjusted EPS increased 5% to $0.91. Despite the earnings beat, the revenue miss and weak guidance sent investors fleeing from the stock.

For the full year of 2025, CL expects net sales to be roughly flat, with organic sales growth within the long-term targeted range of 3-5%. GAAP EPS is expected to grow in the mid-single-digits, while adjusted EPS is expected to grow in the low-to-mid-single-digits. The company's guidance for 2025 indicates a cautious outlook, as it anticipates a mid-single-digit negative impact from foreign exchange rates on net sales growth.



The impact of foreign exchange rates on Colgate-Palmolive's sales and earnings has been significant. In the third quarter of 2024, the company reported that foreign exchange rates had a mid-single-digit negative impact on its net sales growth. This negative impact is due to the strengthening of the U.S. dollar against other currencies, which makes Colgate-Palmolive's products more expensive in international markets. This, in turn, can lead to lower sales volumes and reduced earnings for the company.



In conclusion, Colgate-Palmolive's stock price decline today can be attributed to a combination of factors, including missed revenue forecasts, weak guidance, and the impact of foreign exchange rates on sales and earnings. The company's cautious outlook for 2025, with a mid-single-digit negative impact from foreign exchange rates on net sales growth, suggests that investors should remain vigilant in monitoring the company's performance and market trends.