Profits Wither, but Colgate Continues to Invest to Support Sales Momentum; Shares Not a Bargain

Despite extensive supply chain disruptions, we think Colgate’s enhanced focus on consumer-valued innovation across its price tiers contributed to impressive sales marks in the third quarter. Organic sales popped 4.5% (reflecting a 1.5% benefit from increased volumes and a 3-point bump from higher prices), on top of 7.5% growth in the year-ago period. This marked Colgate’s 11th consecutive period of underlying gains in line with or above its 3%-5% long-term aim.