Colgate-Palmolive's (CL) Q3 2024 earnings report highlights a strong financial performance, with net sales increasing to $5,033 million, up from $4,915 million in Q3 2023. This represents a year-over-year growth of approximately 2.4%. For the nine months ended September 30, 2024, net sales reached $15,156 million, a 4.5% increase compared to $14,507 million in the same period of 2023.

The company's gross profit margin improved significantly to 61.1% in Q3 2024, compared to 58.5% in Q3 2023, reflecting a 260 basis point increase. On a non-GAAP basis, the gross profit margin was 61.3%, up from 58.6%, driven by cost savings initiatives and higher pricing, partially offset by increased raw material costs.

Net income attributable to Colgate-Palmolive rose to $737 million in Q3 2024, compared to $708 million in Q3 2023, marking a 4.1% increase. For the nine months ended September 30, 2024, net income attributable to the company was $2,150 million, a substantial increase from $1,582 million in the same period of 2023.

Earnings per share (EPS) also showed growth, with basic and diluted EPS at $0.90 in Q3 2024, up from $0.86 in Q3 2023. For the nine-month period, basic EPS was $2.62, compared to $1.91 in 2023, while diluted EPS was $2.61, up from $1.90.

Selling, general, and administrative (SG&A) expenses increased by 9% to $1,979 million in Q3 2024, compared to $1,822 million in Q3 2023. This rise was attributed to higher advertising investments and increased overhead costs. SG&A expenses as a percentage of net sales rose to 39.3% in Q3 2024, up from 37.1% in Q3 2023.

The company reported operating profit of $1,065 million in Q3 2024, up from $1,029 million in Q3 2023. For the nine-month period, operating profit reached $3,205 million, a 10% increase from $2,912 million in the same period of 2023. This growth reflects improved gross margins and higher sales.

Segment performance: The Oral, Personal, and Home Care segment contributed $11,814 million in net sales for the nine months ended September 30, 2024, up from $11,332 million in 2023. The Pet Nutrition segment also showed strong growth, with net sales of $3,342 million, compared to $3,175 million in 2023. Operating profit for the Oral, Personal, and Home Care segment was $3,119 million, while Pet Nutrition contributed $691 million.

The company achieved organic sales growth, which excludes the impact of foreign exchange, acquisitions, and divestments. This metric highlights the underlying strength of Colgate's business, driven by higher pricing and volume growth.

Cash flow from operations increased by 9% to $2,838 million for the first nine months of 2024, compared to $2,609 million in the same period of 2023. This improvement was primarily due to higher net income, partially offset by changes in working capital. Capital expenditures decreased to $377 million, down from $508 million in 2023, reflecting a focus on high-return projects.

The company maintained a strong liquidity position, with cash and cash equivalents rising to $1,234 million as of September 30, 2024, compared to $951 million at the same time in 2023. This was supported by robust cash flow generation and disciplined capital allocation.

The effective income tax rate for Q3 2024 was 21.3%, slightly lower than 21.9% in Q3 2023. For the nine-month period, the effective tax rate decreased to 23.4% in 2024, compared to 29.5% in 2023, reflecting favorable tax adjustments and geographic earnings mix.

Colgate-Palmolive continues to face challenges in the global marketplace, including heightened competition, evolving retail landscapes, and geopolitical uncertainties. However, the company is investing in digital and analytics capabilities, eCommerce, and higher-growth businesses to mitigate these risks and drive future growth.