Colgate-Palmolive delivered a stronger-than-expected third quarter and lifted its profit forecast for 2026, signaling that the maker of toothpaste and household goods is managing to push through higher costs while still growing sales. The company now expects adjusted earnings per share to grow 5% to 7% next year, up from its previous guidance, even as it warned that input and shipping expenses remain elevated.
Quarterly results beat estimates
For the three months ended September 30, Colgate-Palmolive reported adjusted earnings per share of $0.97, up from $0.91 a year earlier and ahead of the $0.93 that analysts had expected. Revenue rose 4.6% to $5.37 billion, while organic sales—which strip out currency swings and acquisitions—grew 3.6%.
That growth was driven by a combination of higher volumes and higher prices. Volumes contributed 1.7 percentage points, while pricing added 2 percentage points. The company has been raising prices across many of its products to offset rising costs for raw materials, packaging, and freight, a trend seen across the consumer staples sector.
Uneven demand across regions
While the overall numbers looked solid, the underlying demand picture was mixed. Volumes increased in most regions around the world, but North America—the company's largest market—saw volumes fall 3.7%. Colgate-Palmolive pointed to softer U.S. shoppers and jitters tied to fuel prices, which may be making consumers more cautious about spending.
This regional weakness is a reminder that even large consumer brands are not immune to shifts in consumer confidence. When gasoline prices rise, households often cut back on discretionary purchases, and even everyday essentials can see slower demand as shoppers trade down or delay purchases.
Cost pressures persist
Despite the earnings beat, the company said input and shipping costs are still elevated. This is a common challenge for consumer staples companies, which have been grappling with higher costs for ingredients, packaging materials, and logistics for several quarters. While some costs have eased from their peaks, they remain above pre-pandemic levels.
Colgate-Palmolive's ability to raise prices without losing too many customers has been key to protecting its profit margins. But the North American volume decline suggests there are limits to how much pricing power companies have, especially when consumers are feeling squeezed.
What it means for investors
For everyday investors, Colgate-Palmolive's results offer a few takeaways. First, the company is still growing and generating solid profits, which is reassuring for those who hold the stock for its dividend and stability. Consumer staples companies like Colgate are often seen as defensive investments, because people keep buying toothpaste and soap even in tough economic times.
Second, the raised 2026 outlook is a positive signal. Management's willingness to lift guidance suggests they see enough momentum to offset ongoing cost pressures. However, the softness in North America is worth watching. If U.S. consumers continue to pull back, it could weigh on future results.
It's also useful to compare Colgate's performance with other consumer companies. For instance, Church & Dwight also beat estimates and raised its outlook, while announcing a $1 billion buyback. That suggests the broader household products sector is holding up reasonably well, though not all companies are as fortunate. SPS Commerce, a tech firm, trimmed its revenue outlook despite beating estimates, showing that guidance changes can go either way.
Looking ahead
Investors will likely focus on whether Colgate-Palmolive can sustain its pricing power and whether North American volumes recover. The company's ability to manage costs while maintaining growth will be key to hitting its 2026 targets.
For those who own Colgate stock, the raised outlook is a good sign, but it's not a reason to make drastic changes. As always, it's important to consider how a company fits into your overall portfolio and risk tolerance. The company's next earnings report will show whether the trends from this quarter continue.
In the meantime, the broader earnings season is giving investors a mixed picture. Some companies, like Usiminas, have seen shares slide on misses, while others have been rewarded for beating expectations. The key is to focus on the fundamentals rather than short-term market reactions.
Colgate-Palmolive's results are a reminder that even in a challenging cost environment, well-managed companies can still deliver. But the uneven demand across regions shows that no company is completely insulated from consumer sentiment.
