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Colgate Announces Strong Quarter; Exceeds Expectations
Posted: January 30, 2007Colgate-Palmolive Company announced worldwide sales and unit volume growth for fourth quarter 2006. Worldwide sales grew 10.5% to $3,209.1 million and unit volume grew 7.0%. Excluding divestments, worldwide sales and unit volume grew 11.5% and 8.0%, respectively. Global pricing increased 1.0%, and foreign exchange added 2.5%. The top-line growth was supported by a double-digit increase in worldwide advertising spending to a record level.
"We are especially pleased to have ended our 200th anniversary year so strongly," said Reuben Mark, Chairman and CEO, Colgate-Palmolive Company. "The combination of extraordinary top-line growth, higher margins, increased advertising spending and significantly higher net profit during the quarter is an indication that the basics of our business are strong and getting stronger.
"The increase in gross profit margin and other savings programs funded a double-digit increase in advertising supporting Colgate brands while still delivering higher than expected operating profit and earnings per share growth for the quarter. We expect the positive gross profit momentum to continue into 2007 as a result of our ongoing savings programs, the growing benefits from restructuring and the continuing shift toward higher margin products. Also, most of the benefit from our worldwide drive to increase promotional efficiency is yet to come."
For the full year 2006, worldwide sales as reported increased 7.5% to $12,237.7 million, an all-time high, including 5.5% unit volume growth, 1.5% higher pricing and 0.5% positive foreign exchange. Global sales and global unit volume grew 9.0% and 7.0%, respectively, excluding divestments.
"Every operating division had higher advertising spending, which drove market share gains across categories," said Ian Cook, president, COO and CEO, Colgate-Palmolive Company. "Toothpaste market shares strengthened in key countries around the world including Mexico, Brazil, India, the United Kingdom and Russia, and are at a record high here in the U.S. Colgate's worldwide share of the manual toothbrush market also increased during the quarter to another record high bringing Colgate new global leadership in this category."
Colgate's leadership of the U.S. toothpaste market continues to grow, with its ACNielsen market share reaching 37.3% year to date, up 50 basis points versus the year ago period and nearly three share points ahead of the nearest competitor. The strong growth was led by Colgate Total toothpaste which reached an all-time record high market share of 14.3% for the year. Colgate's share of the manual toothbrush market is also at a record high at 23.8% year to date, up 140 basis points versus year ago. In the separately measured Naturals channel, Tom's of Maine toothpaste continued its leadership with its year to date share of that market at 49.7%.
"Building on this success, we are excited to be entering 2007 with a very full pipeline of new products around the world and an array of very strong integrated marketing campaigns to support them," said Cook. "Our excellent top and bottom line trends should continue through 2007."