Can management elaborate on Hill's strong Q4 performance, especially volume growth despite a tough category, and the outlook for continued outperformance?

Noel highlighted Hill's 2% underlying volume growth (ex-private label), driven by broad-based growth and strong Prescription Diet performance. He noted share gains across channels and increased brand advertising, despite category softness from pet adoptions. “Therapeutic continues to be a big growth driver for us. The Prescription Diet business growing very, very nicely with improved obviously, market shares, and that clearly helps the mix in the operating margins and gross profits.”

How are learnings from Colgate's success in China being transferred to brands like Hawley & Hazel and other regions, including the U.S.?

Noel explained that China's omni-demand generation capabilities, combining strong brick-and-mortar with e-commerce, unique innovation, and personalized messaging, are being transferred globally. Hawley & Hazel is replicating this, showing success with a new super-premium online product. “We've seen so much interesting learnings coming out of our China team, our Colgate China team that we've sent all of our key leaders and marketing directors over to China for immersions into the commercial strategies that they've deployed over the last couple of years.”

Given the challenging consumer backdrop, what is the rationale behind ad spend decisions, particularly if it's to improve market share, and how much flexibility exists to adjust A&P spend?

Noel stated that while Q4 ad spend as a percentage of sales was slightly down, it was up 5% in dollar terms. The focus is on optimizing efficiency through omni-demand generation. He affirmed that advertising will be increased in areas where it can significantly benefit market share and penetration. “Moving forward, a real focus on optimization and efficiency, but we have areas of the world and brands that we believe will continue to benefit immensely from improved advertising and increased levels of advertising in the market.”

Colgate Palmolive (CL) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Consumer Staples· Jan 30, 2026

Source: earnings call transcript

Executive summary

Colgate-Palmolive Q4 FY25 — Strong Q4 momentum and 2030 strategy launch

Colgate-Palmolive delivered stronger-than-expected Q4 FY25 results, driven by improved organic sales momentum across most divisions and the launch of its new 2030 strategy. Despite ongoing category sluggishness and volatility, particularly in North America, the company is focused on science-based innovation, omnichannel demand generation, and strategic investments to drive long-term growth and shareholder value.

Highlights

Achieved organic sales growth in all four categories in Q4 FY25.
Delivered sequential improvement in organic sales growth in every division except North America in Q4 FY25.
Realized modest volume growth in Q4 FY25, excluding the Prime100 acquisition and private label exit.
Hill's underlying volume grew 2% in Q4 FY25, excluding private label impact.
Emerging markets posted 4.5% organic growth in Q4 FY25, balanced between price and volume.

Concerns

Experienced lower-than-expected category growth in FY25.
Faced higher-than-anticipated raw material inflation in FY25.
Impacted by higher tariffs in FY25.
Category growth rates remain low, in the 1.5% to 2.5% range.
The U.S. market remains sluggish, with negative volume in core categories.

Guidance & targets

Category	Target	Timeline	Confidence
Organic sales growth	1% to 4% high materiality	Full-year 2026 · FY26	Medium
Net sales growth	wide range high materiality	Full-year 2026 · FY26	Medium
FX benefit to revenue	low single-digit medium materiality	Full-year 2026 · FY26	Medium
FX benefit to bottom line	part of flexibility for investment and contribution medium materiality	Full-year 2026 · FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Emerging Markets Organic growth in Q4 FY25 with a good balance between price and volume.	—	4.5%	—	—
Latin America Very strong Q4 FY25, with Mexico and Brazil contributing significantly. Strong growth across all three categories.	—	high single-digits	—	—
Asia India returned to growth, and Hawley & Hazel showed improvement, particularly in e-commerce with new product entries.	—	—	improved sequentially	—
Hill's Pet Nutrition Strong quarter despite a soft category backdrop. Growth was broad-based across core strategic segments, with improved market shares in Prescription Diet. Gained share in shelf space. Underlying Volume Growth (ex-private label): 2%Prescription Diet Growth: very nicely	—	—	—	—
North America Tough quarter with category growth lagging. Volume was down in nine categories in October, ten in November, and six in December. Home Care and fabric softeners saw mid-single-digit volume declines. Skin health business was soft.	—	—	improved from Q3	—

CL operating KPIs by quarter

CL operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Sep 2025 Q3 FY25	Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Employees	34K We are seizing this moment as the 34,000 Colgate-Palmolive people around the world work to deliver on the change needed to reaccelerate growth and outperform. Source: earnings call transcript	34K I want to make sure -- I think the 34,000 Colgate people around the world that do just extraordinary work in a very difficult environment to deliver strong results and their tireless effort needs to be recognized and thanks. Source: earnings call transcript	34K But more importantly, I want to thank the 34,000 Colgate people around the world who make us who we are. Source: earnings call transcript	0%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline
Hawley & Hazel new super-premium product	launch	exiting Q4 FY25
Colgate Total (India)	launch	moving through distribution
Colgate PerioGard (India)	launch	moving through distribution
Optic White purple brands (India)	launch	moving through distribution

Deals & partnerships

Prime100 acquisition

Acquisition in Australia. It is a science-driven, vet-endorsed brand positioned in the derm space, fitting Colgate's narrative for long-term growth, particularly through the profession. Management is learning from its operations.

Capital programs

Strategic Growth and Productivity Program (SGPP) underway

Benefit:unlock organizational changes and funding necessary to help deliver on new 2030 strategy; drive faster decision-making and optimize structure for omni demand generation

Announced in Q3 FY25, this program is intended to provide flexibility and funding to invest in brands, build capabilities, and drive productivity. It involves substantial organizational changes to align with an omni demand generation model.

Tonganoxie plant expansion underway

Benefit:greater flexibility to deliver more wet product around the world

The plant now has greater flexibility to support Hill's wet product distribution globally.

Risks & headwinds

Lower-than-expected category growth 2026

1.5% to 2.5%

Mitigation:Stronger innovation pipeline, focused revenue growth management, driving premium innovation, competing in value segments.

Higher-than-anticipated raw material inflation 2025

higher-than-anticipated

Mitigation:Funding-the-growth initiatives, productivity programs, pricing actions.

Impact of higher tariffs 2025

negative impact

Mitigation:Operating model flexibility and resilience.

Geopolitical environment volatility 2026

volatile

Mitigation:Operating model flexibility and resilience.

U.S. market sluggishness next couple of quarters

negative volume in core categories

Mitigation:Stronger innovation pipeline, focused revenue growth management, premiumization strategy, competitive couponing strategy, price pack architecture adjustments.

Foreign exchange volatility 2026

historically negative for 8 of last 10 years

Mitigation:Experienced teams managing currency through RGM and pricing; using FX benefit as flexibility for investment and bottom line.

Canada 'Buy Canadian' sentiment current

impacting results

Mitigation:Monitoring the situation, no specific mitigation detailed.

Middle segment squeeze in Latin America ongoing

middle gets squeezed

Mitigation:Upping innovation across all price points, focusing on super-premium and value segments.

Q&A highlights

What is the category growth outlook for 2026, how confident is management in the organic sales growth range, and how will FX benefits be managed?

Noel stated category growth has stabilized at lower rates (1.5-2.5%), with U.S. volumes negative but expected to improve slowly. Stan explained FX as a low single-digit revenue benefit, primarily in H1, which will be used flexibly for reinvestment and bottom-line contribution.

“If categories get worse, we're at the low end of that guidance range, if categories stay where they are, that we're in the middle of that 1% to 4% range, more than likely and if category strengthen, we hope to obviously achieve more towards the higher end of that range.”

asked by Dara Mohsenian · answered by Noel Wallace

2 min read 7 chapters

Detailed narrative

2030 Strategy Launch and Operational Resilience

Colgate launched its new 2030 strategy, building on the 2025 strategy which added $5 billion in sales. The new strategy focuses on leveraging strong global brands, accelerating science-based innovation, enhancing omnichannel demand generation, and investing in digital, data, analytics, and AI. This is supported by a strategic growth and productivity program (SGPP) designed to unlock organizational changes and funding for long-term growth and margin expansion.

Q4 Momentum and Category Stabilization

The company exited 2025 with improved momentum, achieving organic sales growth in all four categories in Q4 and sequential improvement in organic sales growth in every division except North America. Modest volume growth was recorded in Q4, excluding the Prime100 acquisition and private label exit.

While category growth rates have stabilized, they remain low, in the 1.5% to 2.5% range, posing challenges for the competitive environment.

North America Performance and Strategic Focus

North America experienced a tough Q4, although it showed improvement from Q3, with continued category sluggishness, particularly in Personal Care and Home Care. This was attributed to consumer uncertainty and pantry destocking. The company plans to address these challenges with a stronger innovation pipeline for 2026, focused revenue growth management strategies, and a dual approach of driving premium innovation while also competing effectively in value segments.

Strong Emerging Markets Performance

Emerging markets broadly delivered strong organic growth of approximately 4.5% in Q4, demonstrating a good balance between price and volume. Latin America, especially Mexico and Brazil, showed very strong performance with high single-digit growth. Asia also improved sequentially, with India returning to growth and Hawley & Hazel showing progress driven by successful new product entries in e-commerce.

Hill's Pet Nutrition Continues Strong Growth

Hill's delivered a strong quarter despite a soft overall pet category backdrop, achieving 2% underlying volume growth when excluding the impact of private label. Therapeutic products, particularly the Prescription Diet business, were a significant growth driver, contributing to improved market shares and positive mix and operating margins. The Tonganoxie plant's increased flexibility is also supporting greater wet product delivery globally.

FX Impact and Flexible Management Approach

Foreign exchange is anticipated to provide a low single-digit benefit to revenue in 2026, primarily in the first half. This FX benefit will be utilized as part of the company's flexible business model, allowing for reinvestment back into the business and contributing to the bottom line.

Management emphasizes that experienced teams will navigate currency volatility through revenue growth management and pricing strategies, rather than solely relying on FX for planning.

Organizational Evolution for Omni-Demand Generation

The Strategic Growth and Productivity Program (SGPP) is central to evolving the organizational structure to meet changing consumer environments. This involves de-siloing e-commerce and brick-and-mortar operations to create a holistic 'omni demand generation' commercial organization. The goal is to drive faster decision-making, optimize asset utilization, and enable dynamic, personalized messaging to consumers across all channels.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.