Strong sales offset higher costs for Colgate
The company said that profits rose by 19 percent for the second quarter, boosted by sales growth of 16 percent and further aided by global retail price rises averaging 4.5 percent.
Global sales grew from $3.41bn to $3.96bn, with sales volumes growing by only 5 percent. The company said that the reason for this was partly because of the weakness of the dollar against global currencies, which helped to boost profits still further.
North America performs well
Interestingly the company said that on a regional basis, sales in both emerging markets and North America have grown significantly, helping to offset increased production costs as well as stalled sales growth in Europe.
Likewise, the sales growth was also boosted by a record marketing and advertising spend, which on a global basis grew by 18 percent, the company said.
Net income grew from $415.8m in the corresponding period a year earlier to reach $495.5m for the current quarter.
Colgate benefits from weakened dollar
The company has been in a fortunate position to profit from both the weakened dollar and the fact that price increases have been absorbed by consumers without making a significant impact on sales.
However, many industry observers believe that future retail price rises will be more difficult to implement, particularly due to the fact that ever-rising inflation is biting hard into consumer spending power.
"Higher advertising spending behind regular and new products worldwide drove market share gains across categories," said company CEO Ian Crook.
Crook went on to highlight how the US, Mexico, Brazil, China and Russia have all been driving the growth, while pointing to personal care categories such as toothbrushes, mouth rinse and bar soaps as being particularly strong performers.
