Colgate (CL) to Report Q2 Earnings: What's in the Offing?

Colgate-Palmolive Company CL is expected to have registered top-line growth in its second-quarter 2023 numbers on Jul 28 before the opening bell. The Zacks Consensus Estimate for second-quarter revenues is pegged at $4.7 billion, indicating a rise of about 3.7% from the prior-year quarter’s reported figure.The consensus estimate for the company’s earnings is pegged at 74 cents per share, suggesting growth of 2.8% from the prior-year quarter’s reported figure. However, the Zacks Consensus Estimate for earnings per share for the quarter has moved down by a penny in the past 30 days.In the last reported quarter, the company's earnings of 73 cents beat the Zacks Consensus Estimate by 4.3%. It has delivered an earnings surprise of 1.4%, on average, in the trailing four quarters.

Colgate is anticipated to have benefited from solid consumer demand for personal care, hygiene and home care products. Colgate’s focus on innovation, premiumization and digital transformation, along with its brand strength, are likely to have driven its performance in the second quarter. The company’s top line is also likely to have benefited from its effective pricing actions and accelerated revenue growth management plans.Colgate’s focus on the premiumization of its Oral Care portfolio through major innovations has been proving beneficial. Of late, the performance of its premium innovation products, including CO. by Colgate, Colgate Elixir toothpaste and Colgate enzyme whitening toothpaste, has been impressive. This is expected to have boosted organic sales growth for its Oral Care business in the to-be-reported quarter. Our estimate for the company’s organic sales growth is pegged at 4.7% for the second quarter.Solid momentum in the Hill's business is expected to have delivered sales growth in the second quarter. Strength in Hill's Prescription Diet and Hill's Science Diet has been aiding the segment’s sales. The company’s Prescription Diet Derm Complete brand has been gaining market share, which is likely to have augmented sales in the second quarter. We anticipate Colgate’s gross margin to expand year-over-year by 10 basis points in the second quarter.The leading global consumer products company has been aggressively expanding into faster growth channels while extending the geographic footprint of its brands. The company’s efforts to improve product availability through enhanced distribution across existing and new markets are likely to have driven its top-line performance. Higher e-commerce demand for its products is also likely to have augmented its sales in the second quarter.However, higher raw material and packaging material costs have been concerning, despite sales growth. The company has been witnessing a deleverage in SG&A expenses, which have been weighing on margins. Higher costs and expenses are expected to have hurt the bottom line’s performance in the second quarter. Our model indicates about a 1% increase in SG&A expenses in the quarter on a year-over-year basis.Although Colgate’s expansionary efforts into new markets bode well for its long-term growth, it might affect its margins and profitability in the second quarter. For instance, higher costs associated with advertisements and integration costs related to the company’s three Red Collar facilities and the Italian facility are expected to have hurt its margins and profitability in the to-be-reported quarter.Also, given the company’s substantial international operations, foreign-currency woes might have hurt its top line in the second quarter.

Our proven model does not conclusively predict an earnings beat for Colgate this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here.

Colgate-Palmolive Company price-eps-surprise | Colgate-Palmolive Company Quote

Colgate has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Here are some companies that have the right combination of elements to post an earnings beat:Celsius Holdings, Inc. CELH currently has an Earnings ESP of +10.04% and a Zacks Rank #2. The company’s top and bottom lines are expected to increase year over year when it reports second-quarter 2023 results. The Zacks Consensus Estimate for Celsius Holdings’ quarterly revenues is pegged at $278.9 million, calling for growth of 81.1% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for the quarterly EPS is pegged at 31 cents, indicating an improvement from 12 cents reported in the year-ago quarter. CELH has an earnings surprise of 81.8% in the last reported quarter.Coty COTY currently has an Earnings ESP of +28.57% and a Zacks Rank #2. The company’s top and bottom lines are expected to increase year over year when it reports upcoming quarter results. The Zacks Consensus Estimate for Coty’s quarterly revenues is pegged at $1.3 billion, suggesting a rise of 13.6% from the figure reported in the prior-year quarter.The Zacks Consensus Estimate for the quarterly EPS is pegged at 2 cents, which indicates 300% growth from the year-ago period figure. COTY has a trailing four-quarter earnings surprise of 145%, on average.Church & Dwight Co. CHD currently has an Earnings ESP of +1.39% and a Zacks Rank #2. CHD is likely to register top-line growth when it reports the second-quarter numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.42 billion, which suggests growth of 7.3% from the figure reported in the prior-year quarter.The Zacks Consensus Estimate for Church & Dwight’s quarterly earnings is pegged at 79 cents per share, suggesting an increase of 4% from the year-ago quarter’s reported number. CHD has delivered an earnings beat of 9.8%, on average, in the trailing four quarters.Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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