Colgate-Palmolive (CL) - Get Report posted weaker-than-expected fourth quarter earnings Friday and expects a low single-digit decline in 2019 profits thanks to rising input costs and a stronger U.S. dollar.
Colgate-Palmolive said earnings for the three months ending in December came in at 70 cents a share, down 6.66% from the same period last year and 3 cents shy of the consensus forecast. Group sales, the company said, were pegged at 3.811 billion, essentially flat from the fourth quarter of 2017 but modestly ahead of the Street forecast.
Colgate-Palmolive said it sees a "low single-digit" decline in 2019 earnings, while net sales are likely to be flat or modestly higher than the previous year's tally.
"Looking ahead to 2019, based on current spot rates, we expect net sales to be flat to up low-single-digits, with organic sales growth of 2% to 4% as we are planning for increased investment behind our brands, higher pricing and strong innovation, led by the relaunches of Colgate Total and Hill's Science Diet and our continued focus on naturals.
"We are also planning to invest in expanding our portfolio offerings by bringing brands like elmex and meridol into new markets and by broadening our e-commerce offerings, including direct to consumer, to build on our strong e-commerce growth in 2018," said CEO Ian Cook. We also plan to continue to increase our investment behind our professional skin care businesses, Elta MD and PCA Skin."
"Given our plans to increase investment behind our brands to drive acceleration in organic sales growth, we believe our earnings outlook for 2019 is appropriate," he added.
Colgate-Palmolive shares fell 0.6% to $61.84 by the close of trading on Friday, extending the stock's three-month decline to about 4%.
The U.S. dollar index, which benchmarks the greenback against a basket of six major global currencies, rose 1.1% over the three months ending in December, but ended the year 3.8% higher than the fourth quarter of 2017.