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Colgate-Palmolive (CL) reports that organic sales increased by 5.0% in Q4 to easily beat the 3.0% consensus mark. Now the company expects the sales growth of at least 4% to 6%.
Colgate-Palmolive Company said its net sales for the fourth quarter of the fiscal year 2019 stood at $4.02 billion, marking a 5.5% increase from the same period a year earlier. In the same time, organic sales rose by 5%.
Earnings per share for the period hopped 7.2% to $0.75, while net income was standing at $643 million. Colgate-Palmolive’s Gross Profit Margin was 60.1% in the fourth quarter of 2019 versus 59.1% in the fourth quarter of 2018.
CEO Noel Wallace said:
“Colgate’s leadership of the global toothpaste market continued during the quarter with our global market share at 41.1% year to date. Our global leadership in manual toothbrushes also continued with Colgate’s global market share in that category at 31.6% year to date.”
Colgate-Palmolive shares were up 3.14% in premarket trading after the results were released. At the moment of writing, the price of CL stock is $73.78 (+6.20%).
Solid Valuation of Colgate-Palmolive Brings More Investors
If we talk about valuation it is important to stress that the company’s enterprise value to EBITDA is 14.66 and its total debt to EBITDA Value is 1.46. What is more important, the Enterprise Value ( a measure of a company’s total value, often used as a more comprehensive alternative to equity market capitalization) to sales for this firm is now 4.13, and its Total Debt to Enterprise Value stands at 0.11.
Latest reports from the company that are regarding the workforce efficiency show that Colgate-Palmolive Company earns $450,551 for each employee under its payroll.
The publicly-traded organization’s liquidity data is also interesting: its Quick Ratio is 0.76 and its Current Ratio is 1.14. This company is not investing its short-term assets in an optimally efficient way, making it therefore a riskier to invest in.
Colgate-Palmolive Company has 857.65 million shares outstanding, amounting to a total market cap of $59.58 billion. Stock ended on Friday 6.20% up, after the earnings report went public.
Both Positive and Negative Side-Effects for Colgate-Palmolive Investors
Analysts think that shares of Colgate-Palmolive Company can overall bring both negative and positive effects to its investors.
The good results are also helped with the recent acquisition the company made. Two weeks ago, Colgate-Palmolive announced that it will acquire Hello Products LLC (“Hello”), one of the fastest-growing, premium oral care brands in the United States, a portfolio company of Tenth Avenue Holdings, a New York City-based private, diversified holding company.
As per the announcement, the acquisition will be backed with a combination of cash and debt and is expected to be done somewhere in February 2020. Hello will continue to be led by founder Craig Dubitsky and Lauri Kien Kotcher, Chief Executive Officer.
“We are excited to welcome Hello to the Colgate family and are especially pleased that Craig and Lauri will continue in their leadership roles. We have great respect for the Hello team and their impressive product line, and value the strong connection they have made with younger consumers. With its distinct on-trend positioning, Hello is a terrific complement to our Colgate and Tom’s of Maine brands and we look forward to supporting its continued growth and success”, said Noel Wallace, Colgate’s President and CEO.