Colgate-Palmolive’s sales slip amid tariffs, shaky consumer confidence

American multinational Colgate-Palmolive posted net sales of $4.9 billion (€4.3B) in the first quarter of 2025, a 3.1% decline year-on-year (YoY).

Organic sales increased by 1.4%, including a negative impact from lower volumes of private-label pet food, a segment the company plans to exit this year.

Hill’s Pet Nutrition, which makes up 23% of the company’s sales, remains strong. Even with a 2.3% negative impact from the reduction in private label, net sales at Hill’s grew 1.5%, and organic sales increased by 2.9% YoY.

Operating profit for the pet food brand increased 30% YoY while operating profit company-wide grew by 3%.

Hill’s was impacted by a relaunch of its Science Diet during Q1 when it added ActivBiome+ Multi-Benefit, a prebiotic nutritional blend. The company saw steady growth in the US and double-digit growth in Canada. The company has also launched a new advertising campaign for Hill’s to drive more household penetration. Pricing increases contributed to 3.2% sales growth for the brand.

Trouble ahead?

On an earnings call with investors, CEO Noel Wallace notes that 2025 is turning out to be “even more volatile than expected” as Trump’s tariffs roil international trade across industries and political upheaval shakes consumer confidence.

“While a slowdown in category pricing was always built into our assumptions for 2025, the macroeconomic and consumer uncertainty we saw in Q1… had a negative impact on buying growth and therefore category growth,” says Wallace.

Revised guidance

As a result, the company revised its earnings guidance downward for the year by $200 million (€176M). It now expects low single-digit net sales, with a low single-digit negative impact from currency exchange.

Organic growth, previously expected to be between 3% and 5%, is now expected to fall between 2% and 4%. As a percentage of net sales, Colgate-Palmolive expects its gross profit margin and advertising investment to be flat.

Wallace also cites “opportunities” driven by consumer uncertainty, saying that he expects the company to fare better than its competitors due to the strength of its brands. He also adds that investments in supply chain resilience have somewhat limited the impact of tariffs.

“We have changed many of our sourcing strategies and have also invested approximately $2 billion (€1.75B) in our supply chain in the United States over the past 5 years, which leaves us better positioned to adapt to this changing environment,” he states.