Colgate-Palmolive’s Base Business earnings increased during the second quarter of 2026 as gross-margin expansion, organic sales growth, and improved underlying operating profit more than offset heavier advertising investment.
Base Business diluted earnings per share increased 8% to $0.99 from $0.92. Reported diluted EPS moved in the opposite direction, declining 5% to $0.86 from $0.91.
The $0.13 difference between reported and Base Business EPS primarily reflected costs connected with Colgate’s Strategic Growth and Productivity Program.
Colgate recorded $129 million of pretax adjustments associated with that program. The charges reduced net income attributable to Colgate-Palmolive by approximately $104 million.
Reported operating profit declined 6% to $1.02 billion, while Base Business operating profit increased 5% to approximately $1.15 billion.
Reported operating margin contracted 210 basis points to 19%. Base Business operating margin increased 10 basis points to 21.4%.
Net sales increased 4.9% to $5.36 billion.
Organic sales grew 2.4%, including 0.8% organic volume growth and a 1.6% contribution from pricing. Foreign exchange added another 2.4 percentage points to reported growth.
The quarter included a 0.4-percentage-point organic-sales headwind from Colgate’s exit from private-label pet food.
North American organic sales declined 3%, with volume falling 3.9%. Pricing contributed 0.9%, but it was not sufficient to offset the lower volume.
Latin American organic sales increased 5.3%, supported by 2.6% volume growth and a 2.8% pricing contribution.
Asia Pacific organic sales increased 5.2%, including 4.1% organic volume growth. Europe, the Middle East, and Africa generated 2% organic growth.
Hill’s Pet Nutrition organic sales increased 2.1%, even though organic volume declined 1.8%. Pricing contributed 3.9%.
The results demonstrate that pricing remained an important source of pet nutrition growth while Colgate reduced private-label exposure and focused on its branded portfolio.
Gross margin increased 140 basis points to 61.5% on both a GAAP and Base Business basis.
Gross profit reached approximately $3.3 billion, compared with $3.07 billion during the prior-year quarter.
Colgate reinvested part of the gross-profit improvement in brand support.
Advertising spending increased approximately 15% to $777 million from $678 million. Management plans to maintain elevated investment during the second half, focusing on premium products, science-led innovation, and omnichannel demand generation.
Net cash provided by operating activities reached $1.74 billion during the first six months, compared with $1.48 billion a year earlier.
Free cash flow before dividends increased to approximately $1.48 billion from $1.25 billion.
Colgate maintained its full-year organic-sales outlook of 1% to 4%.
The company now expects Base Business EPS to increase at a mid-single-digit rate, compared with its previous expectation for low- to mid-single-digit growth. Gross margin is expected to remain approximately flat rather than decline.
Colgate’s second-quarter results show that underlying earnings improved despite restructuring costs and continued investment.
Base Business EPS growth, stronger gross margin, and improving organic volume provide a clearer view of the operating trend than the reported 5% decline in GAAP earnings per share.
KEY QUOTES:
“Our growth momentum continued in the second quarter, as we delivered strong broad-based top- and bottom-line results, despite a difficult operating environment.”
“We delivered these strong results while continuing to invest in the long-term health of our business with a 15% increase in advertising this quarter.”
Noel Wallace, Chairman, President And Chief Executive Officer Of Colgate-Palmolive
