Colgate-Palmolive Company reported worldwide net sales of $4.185 billion in second quarter 2011, an increase of 9.5% versus second quarter 2010. Net income increased 3% to $622 million in second quarter 2011 and Diluted earnings per share increased 8% to $1.26. Net income was $603 million. Gross profit margin was 57.4%, down 140 basis points versus the year ago quarter, as higher material costs more than offset benefits from cost savings from the company's funding-the-growth initiatives.
As previously announced, as part of its strategy to focus on its higher-margin oral care, personal care and pet nutrition businesses, on June 20, 2011 Colgate completed the purchase of the Sanex personal care brand from Unilever PLC for €672 million ($960 million). Sanex is a premium-priced personal care brand with a distinct positioning around healthy skin and strong market share positions in Europe.
"We are pleased with our solid top and bottom line growth this quarter with worldwide net sales, operating profit, net income and diluted earnings per share all increasing versus year ago, despite very sharp increases in material costs, an intense competitive environment globally and challenging macroeconomic conditions, particularly in developed markets," said Ian Cook, chairman, president and CEO, Colgate. "Colgate's global market shares in toothpaste and manual toothbrushes are both at record highs year to date. Colgate's share of the global toothpaste market strengthened to 44.6% year to date, up 0.4 share points versus year ago.
"Reflecting the significantly higher cost environment, we continue to expect gross profit margin for the year to decline between 80 and 100 basis points versus 2010."
North America net sales declined 3.0% in the second quarter. Unit volume increased 0.5% with 4.5% lower pricing and 1.0% positive foreign exchange. Organic sales declined 4.0% during the quarter. Operating profit in North America decreased 15% in the second quarter of 2011 to $194 million, or 26.1% of net sales. Successful new products in the U.S. in other categories include Softsoap brand Body Butter Strawberry Smoother body wash. Looking ahead in the U.S., an array of new product introductions are planned for the balance of the year with strong advertising supporting them and other recent new product launches.
Latin America net sales rose 17.0% during the quarter with unit volume increasing 4.0%. Volume gains were led by Brazil, Mexico and Colombia. Higher pricing added 6.5% and foreign exchange was positive 6.5%. Organic sales for Latin America increased 10.5% during the quarter.
Europe/South Pacific Net sales increased 11.5% during the quarter. Unit volume increased 0.5% with 2.5% lower pricing and 13.5% positive foreign exchange. Volume gains led by the United Kingdom and Denmark were partially offset by volume declines in the GABA business and France. Organic sales for Europe/South Pacific declined 2.0%.
Greater Asia/Africa Net sales and unit volume increased 12.0% and 6.5%, respectively, during the quarter. Volume gains were led by the greater China region, India and Malaysia. Pricing was level with the year ago quarter and foreign exchange was positive 5.5%.