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Colgate Falls as It Forecasts Weaker Margins, EPS at Lower End -Breaking

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© Reuters.

By Dhirendra Tripathi

Investing.com – Colgate-Palmolive stock (NYSE:) dipped 0.4% on Friday as the company joined the long list of companies warning of a “difficult cost environment” continuing for the next several quarters.

After facing “significant increases in raw material and logistics costs” in the third quarter, the company said it expects its annual adjusted gross profit margin to decline amid higher spending on advertising for its toothbrushes and hand washes. In 2020, the gross profit margin was at 61.1% and in 2019, it was at 59.4%.

The company stated that profit per share would now come in lower than the high single-digit to mid-single digit range. The company also maintained its target of 3% to5% organic growth. In the last year, net sales rose by between 4% and 7%.

All retailers and service providers, from Apple (NASDAQ) to Starbucks (NASDAQ) have warned that high raw materials prices and supply chain disruptions will affect their profitability over the next few quarters. This is despite economies booming and shipping delays preventing ships from reaching ports for several days.

Colgate’s net sales in the third quarter rose 6.5% from the same period last year, to $4.41 billion. Organic sales increased 4.5%

An increase of 2 cents in adjusted profit margin to 81 cents was reported. Both profit and sales were both higher than expected.

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