Colgate-Palmolive quarterly sales miss expectations after Brazil strike

(OnNewsToday) – Colgate-Palmolive Co (CL.N), the world’s largest toothpaste maker, reported weaker-than-expected quarterly sales on Friday, hurt by a trucker strike in Brazil and weakness in Latin American currencies.

Shares in Colgate, which also makes Speed Stick deodorants and Softsoap hand-wash, were down 3.4 percent in premarket trading.

A strike in May by Brazilian truck drivers against diesel price hikes emptied roads and left major cities running short on food, gasoline and other basic commodities. Latin American currencies also have weakened amid political uncertainty and a strong U.S. dollar.

Sales in Latin America, which account for nearly a quarter of Colgate’s total revenue, fell 7 percent to $933 million. Colgate said it would have moved more products had it not been for the strike.

“The second quarter was another challenging one with category growth rates remaining soft in many markets around the world and recent unfavorable movements in foreign exchange,” Chief Executive Ian Cook said in a statement.

Big packaged goods companies have been struggling to grow sales amid fierce pricing competition between retailers and as shoppers turn increasingly to fresher brands. The industry also has been rocked this year by surging commodities and transportation prices.

Shares in Colgate, which traces its roots to a New York soap, starch and candle store in 1806, have fallen about 11 percent since the start of the year.

Net income attributable to Colgate rose to $637 million, or 73 cents per share, in the second quarter ended June 30. Including one-time items, the company earned 77 cents per share, in line with analysts’ estimates.

Net sales rose 1.6 percent to $3.89 billion, helped by higher selling volumes in North America, but were below analysts’ average estimate of $3.92 billion, according to Thomson OnNewsToday I/B/E/S.

The company, which also makes laundry detergents, shampoos and aftershaves, said sales in its core oral, personal and home care business rose in all geographies but Latin America. Procter & Gamble (PG.N), the world’s second-largest consumer goods company and the maker of Oral-B dental products, is expected by analysts to report a rise in quarterly sales and earnings next week.

Reporting by Richa Naidu in Chicago and Nivedita Balu in Bengaluru; Editing by Bernard Orr and Bill Trott

Our Standards:The Thomson OnNewsToday Trust Principles.

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