Colgate

Colgate’s CEO boasted of the companies sales despite significant price increases

Colgate’s CEO said that company was increasing sales projections, saying “we’re showing the ability to take pricing because we have built healthier brands.” “NOEL R. WALLACE, CHAIRMAN, CEO & PRESIDENT, COLGATE-PALMOLIVE COMPANY: But what really gives me confidence is the fundamental changes Colgate people have made to drive growth, which is why we are raising our organic sales growth guidance to 5% to 7% for 2022. Our second quarter results, including double-digit organic sales growth in Oral Care and Pet Nutrition showed that the growth strategies we put in place 3 years ago are delivering on our objectives in how the power of our global portfolio is working. We’re delivering growth across all of our divisions and all of our categories. We’re showing the ability to take pricing because we have built healthier brands. We have built up our innovation capabilities, so we can deliver more breakthrough and transformational innovation that can drive both category growth and market share.” (Q2 2022 ColgatePalmolive Co Earnings Call, 7/29/2022)

Colgate’s CEO said the company was seeing increasing thanks thanks to “driving positive pricing and “a 500 basis point sequential acceleration in pricing growth.”“NOEL R. WALLACE, CHAIRMAN, CEO & PRESIDENT, COLGATE-PALMOLIVE COMPANY: And crucially, in this operating environment, our revenue growth management tools are driving positive pricing and mix as our efforts to offset the significant raw material and logistics inflation we are seeing, along with the productivity and our ability to improve our price mix, which would enable us to rebuild our gross margin moving forward. And looking at the quarter, the second quarter marked our 14th consecutive quarter with organic sales growth either in or above our long-term target range of 3% to 5%, and that growth is broad-based. We delivered organic sales growth in all 6 of our divisions. We delivered organic sales growth in all 4 of our categories: Oral Care, Pet Nutrition, Personal Care and Home Care, with all 4 categories either in line with or above our long-term target range of 3% to 5%. As we discussed on the first quarter call, our execution on revenue growth management and premium innovation allowed us to deliver a 500 basis point sequential acceleration in pricing growth. Encouragingly, despite this pricing, our volume performance also improved sequentially in the quarter on both a 1- and a 2-year basis behind strong marketing plans, innovation and improved supply chain performance.” (Q2 2022 ColgatePalmolive Co Earnings Call, 7/29/2022)

Colgate’s CEO bragged that consumers were not being dissuaded despite “more and more pricing going into the market” “NOEL R. WALLACE: Yes, sure. Thanks for the question. If you scan your — at least the numbers we’re looking around the world, you continue to see pretty good vitality at the consumer level. Emerging markets growing mid-single digits. Obviously, some slowdown in the developed world, particularly out of Europe where you saw some sluggishness in the categories. But specifically to your question on emerging, it looks pretty good. Now a lot of pricing, as you can imagine, going through. But if we come back to our overarching strategy and as we really laid out in the first quarter that we would continue to take pricing, coupled with strong revenue growth management, but more importantly, accelerating our innovation cycle into those markets. Strong innovation on the premium and the value orientation side has allowed us, obviously, to continue to deliver strong top line growth, both in price and in volume. We will watch the consumer really closely, Peter. We obviously have a lot of teams on the ground looking at exactly where the elasticities are. But so far, elasticities are in line with what we expected or slightly better. But that will change over time as you see more and more pricing going into the market and other economic factors impact categories. But overall, so far, we’ve seen the categories behaviors we expected. Not a lot of trade down, but it’s early days. We’ll see how that evolves over time.” (Q2 2022 ColgatePalmolive Co Earnings Call, 7/29/2022)

Colgate’s CEO said their competitors were being “constructive” and “rational” about pricing, meaning prices would remain elevated even as inflation decreased

Colgate’s CEO said their competitors were acting “constructive relative to how we’ve seen competitors behave” in not seeking price decreases. “NOEL R. WALLACE: Sure. In terms of just an overarching statement on competition, clearly it’s been constructive relative to how we’ve seen competitors behave. And I don’t pretend to understand their strategies, or quite frankly, react to them. We’re very focused on executing our strategies in the marketplace. And as we laid out again early on the first quarter call that we would be taking and leading pricing in some of the markets. And ultimately, we expected, given the inflation that’s impacting everyone, we would see competition follow as well, and that’s been the case by and large around the world. “ (Q2 2022 ColgatePalmolive Co Earnings Call, 7/29/2022)

Colgate’s CEO: “Obviously, the pricing in the market needs to hold…if inflation holds, the big determinant will be will pricing hold. And my sense is given where we see the marketplace today, that will be the case. So the answer is, longer term, yes, we absolutely believe that we can rebuild gross margins”“NOEL R. WALLACE: Yes, it depends on a couple of things, Bryan. First and foremost, we believe that over the longer term, our focus is on rebuilding gross margins, and we feel quite confident that we could do that, particularly in the current environment, given the strength of our brand, the investment we’re putting behind the brands, and the innovation grid that we have in front of us. A couple of things that need to happen. Obviously, the pricing in the market needs to hold. As you see inflation come down, it’s a real question of where competitors will go with pricing. We think it’s been quite rational to this stage. We think that given the unprecedented levels, that you’ll see constructive moves around pricing and promotion moving forward, but we’re prepared for that. It’s really the flex of our portfolio across different price points that we need to manage very, very carefully. So in my view, if inflation holds, the big determinant will be will pricing hold. And my sense is given where we see the marketplace today, that will be the case. So the answer is, longer term, yes, we absolutely believe that we can rebuild gross margins.” (Q2 2022 ColgatePalmolive Co Earnings Call, 7/29/2022)

Colgate’s CEO: “ If inflation becomes more benign, there may be a decision by others to decide to put that into promotion and get some volume. But as I mentioned earlier on, I think the market seems to be acting quite rationally. This is an unprecedented environment for all CPG relative to levels of inflation. And so my instinct is you’re not going to see a lot of people chasing volume by discounting price.” “NOEL R. WALLACE: The competitive environment may change for sure. If inflation becomes more benign, there may be a decision by others to decide to put that into promotion and get some volume. But as I mentioned earlier on, I think the market seems to be acting quite rationally. This is an unprecedented environment for all CPG relative to levels of inflation. And so my instinct is you’re not going to see a lot of people chasing volume by discounting price. They’re going to try to regain margin in the P&L. You know Colgate is very focused on gross profit. We will continue to be focused on getting pricing into the P&L as that allows us to maintain the advertising support to drive the top line and make sure we get our innovation well suited in the marketplace. And I don’t really see that changing over the foreseeable future. We will flex our portfolio accordingly. And the good news is we compete across so many price points across all of our categories that we feel that buffers us a bit against any trade down that we see in the marketplace.” (Q2 2022 ColgatePalmolive Co Earnings Call, 7/29/2022)

Colgate’s CEO emphasized a “constructive environment relative to pricing,” citing the companies new “premium” toothpaste.“NOEL R. WALLACE: So overall, a constructive environment relative to pricing. In terms of the Americas, obviously, you’ve seen strong turnaround in our North America business. Again, we highlighted that we were taking pricing and saw momentum build in the first quarter, and that continued as we mentioned in the first quarter call through April. And obviously, you see now with the performance of the North America business, a good performance overall. I would call out that obviously, they saw strong consumption across the categories. The innovation is certainly taking hold. Excited to see the takeaway on Pro Series, which is at the premium end of the toothpaste. You’ve seen the market share in scanner performance, with scanner data in the U.S. up in 8 of 11 categories over the last 13 weeks, which, again, I think, shows the turnaround of that business and importantly, the performance of some of our innovation coming in broad-based across all the categories in which we compete. So overall, good. We’re watching this closely.” (Q2 2022 ColgatePalmolive Co Earnings Call, 7/29/2022)

Colgate predicted that price increases might decrease volume of sales, but said the company was positioned to benefit from any oncoming “deflation.” “NOEL R. WALLACE But I do expect, as we get more pricing in the market, volumes will be a little bit soft year to go, but we’ll manage that very, very closely. On commodity specifically, again, coming back to the first quarter, we talked about $1.2 billion of raw material inflation. We have adjusted that up to $1.3 billion this quarter. Most of that will come in the second quarter, but we’ll get a little of that coming back through the back half of the year. We have used spot rates, as you mentioned, and we’ve seen obviously some commodities come down, but we’re pretty much locked in for the third quarter. Any benefit to any deflation that we see, we’ll get a little bit of that in the fourth quarter, possibly more of that coming in 2023. But we will look to obviously continue to take pricing given the unprecedented environment that we’re seeing both on raw materials and logistics and make sure that we have the marketing plans to execute that effectively.” (Q2 2022 ColgatePalmolive Co Earnings Call, 7/29/2022)

Colgate predicted more price increases were on the way as the company remained “laser-focused on recovering gross profit”

Colgate’s CEO: “the good news is, we’ve taken pricing, we have more pricing planned across the world moving into the back half.” “NOEL R. WALLACE: It’s an unpredictable environment relative to where we see consumers evolving, where we see inflation evolving. But the good news is, we’ve taken pricing, we have more pricing planned across the world moving into the back half, and we’ll watch the consumer impact of that very carefully.” (Q2 2022 ColgatePalmolive Co Earnings Call, 7/29/2022)

Colgate’s CEO: “we will continue to be laser-focused on recovering gross profit as we move through the balance of this year and into 2023.“ ”NOEL R. WALLACE: Yes. Thanks, Chris. You have known our company for many years, how focused we are on gross profit, and we will continue to be laser-focused on recovering gross profit as we move through the balance of this year and into 2023. The pricing and innovation strategies and revenue growth management discipline that we have across the organization is clearly focused and tailored towards getting our teams equipped to find innovative ways to drive category growth, get value into the categories through pricing and other innovation initiatives, and that will clearly be the road map moving forward. And we feel quite confident given the health of our brands, the investment that we’ve been putting behind our brands that we’ll have the ability to continue to take pricing in the marketplace. We’ll watch it very closely, as I mentioned. But recognize that we have a very broad portfolio of products. We compete at the high end and at the low end of the market. And historically, we have been able to flex our portfolio quite well in markets where we’ve had difficult economic circumstances. So we will continue to innovate across all price points and be sure that we’re capturing any trade down, if that happens, which we have not seen at this stage, but ultimately, I would expect you will see some trade down moving forward, and we’ll continue to innovate at the top end to drive the premiumization opportunity that we see.” (Q2 2022 ColgatePalmolive Co Earnings Call, 7/29/2022)

Colagate’s CEO: “We’re pleased with how we’re getting pricing executed…I would say that we will continue to be pushing pricing. “ “NOEL R. WALLACE: So overall, we’re pleased with the balance of pricing and volume. We’re pleased with how we’re getting pricing executed. And more importantly, we’re pleased with the innovation that’s going into the market across multiple price points in order to sustain that moving forward. Moving forward, I would say that we will continue to be pushing pricing. And my expectation is we’ll see some pressure on volume in the year to go, but that’s to be expected as we get more pricing in the market. The important part is the balance of innovation across all price points to mitigate that.” (Q2 2022 ColgatePalmolive Co Earnings Call, 7/29/2022)

Colgate’s CEO: “We’re seeing, obviously, good consumption, obviously, an unprecedented environment around pricing.” “NOEL R. WALLACE: Well, thanks, everyone. Again, broad-based growth across the company, executing and transferring knowledge across our core categories. We’re seeing, obviously, good consumption, obviously, an unprecedented environment around pricing. We’ll continue to be focused on revenue growth management, our funding the growth initiatives and our global productivity initiative as we go into the back half.” (Q2 2022 ColgatePalmolive Co Earnings Call, 7/29/2022)

Colgate’s CEO said the last two quarters of price increases was comparable to 2 years worth, “which looks terrific for us.” “NOEL R. WALLACE Revenue growth management will be critically important to our success moving forward. I think the discipline that we have on the ground quarter-to-quarter gets better? Are we where we need to be? No. But the pricing you see reflected over the last 2 quarters where you see at least a 2-year stack on pricing, which looks terrific for us, I think is a testament to the fact that we’re finding ways to build off the strength of our brands and get value executed in the marketplace. So not a lot of changes, more focus on revenue growth management, more focus on our productivity initiatives and in terms of funding the growth and our global productivity program, which you’re well aware of, getting that executed in the back half and early ’23. So again, let’s focus on what we do best, get on our front foot and continue to execute.” (Q2 2022 ColgatePalmolive Co Earnings Call, 7/29/2022)

Colgate’s CEO: “ We expect pricing will accelerate as we look at our organic growth composition through the balance of the year. That means, obviously, that we’ll have new pricing executed in the back half of the year,”“NOEL R. WALLACE: So on pricing, let me just make it more on a global basis. Clearly, with the inflation that we’ve seen, as we talked about in the first quarter, and we were very clear in laying out visibility in the first quarter around where we saw pricing evolve through the quarter. Obviously, it accelerated in the back half of the first quarter and into April. We expect pricing will accelerate as we look at our organic growth composition through the balance of the year. That means, obviously, that we’ll have new pricing executed in the back half of the year. And that will be pretty broad-based across the world. I’m not going to get into specific regions, but I will say that we will be taking pricing across both the developed and developing world in the back half of the year. And that will be dependent on categories, competitive situations, and we’re looking at each of that very closely. But broad-based, we’re taking pricing across the world.” (Q2 2022 ColgatePalmolive Co Earnings Call, 7/29/2022)

Colgate introduced a new $10 toothpaste as part of its strategy to raise prices overall

Colgate recently introduced a $10 toothpaste, a premium product the CEO called “vital” to the Company’s ability to raise prices. “Colgate-Palmolive Co (CL.N) CEO Noel Wallace said last week at an industry conference that the household goods maker sees its new Optic White Pro Series toothpaste as the type of premium product ‘vital’ to its ability to raise prices, which will help drive profit growth this year. His remarks come when many consumer products companies are hiking prices as much as they can to offset their own rising costs, a trend that could continue due to the conflict between Russia and Ukraine, whose economic risks include driving up gasoline prices.” (Reuters, 3/1/2022)

Colgate defended the pricing, with their trade association claiming there was “incredible appetite for our products” because “we make essentials.” “A Colgate spokesperson said in a statement that the company has a wide portfolio of products at different price points, and touted its new $10 toothpaste as the first with 5% hydrogen peroxide, with ‘demonstrated efficacy to whiten teeth.’ Consumer goods companies last year started hiking prices in response to rising raw material costs and labor shortages due to the pandemic. read more. ’There is incredible appetite for our products,’ said Katie Denis, a spokeswoman for the Consumer Brands Association, a trade group for consumer packaged goods companies including Colgate. ‘We make essentials. And there is no option of not delivering.’” (Reuters, 3/1/2022)

Colgate executives told analysts had a lot of “experience taking quite significant price increases” by highlighting “innovation” 

A Colgate executive told investors: “We have announced significant pricing across all of our categories in North America, which will be implemented throughout Q1 and into Q2.” “John Faucher – Chief Investor Relations Officer : A few comments on our divisional performance. North America net sales declined 1% in the fourth quarter, with organic sales down 1.5% as the division lapped high single-digit growth in the year ago period, with liquid hand soap providing a greater than 3 percentage point headwind in the quarter. In toothpaste, our consumption was ahead of shipments, as our all-outlet market share was up 50 basis points in the quarter. We have announced significant pricing across all of our categories in North America, which will be implemented throughout Q1 and into Q2.” (Colgate Palmolive Company Q4 2021 Earnings Call, 1/28/2022)

Colgate’s CEO: “we’re particularly pleased with the reception to our new products in 2022 that we’ve introduced as well as the acceptance of the pricing across North America.” “Noel Wallace – CEO: So overall, Oral Care was good. I mentioned the strong exiting the market shares in Europe, which were very, very strong. We stabilized the shares in North America and actually saw some all outlet growth in the fourth quarter, driven by untracked channels, which was terrific. And we’re particularly pleased with the reception to our new products in 2022 that we’ve introduced as well as the acceptance of the pricing across North America. So we’re quite confident in terms of where we’re – how we’re setting ourselves up for continued growth in ‘22.” (Colgate Palmolive Company Q4 2021 Earnings Call, 1/28/2022)

Colgate’s CEO said the company “had a lot of experience taking quite significant price increases” and said they were balancing it with the “promotional cadence” of highlighting “innovation.” “Noel Wallace – CEO: Yes, thanks. Early days. Obviously, as you mentioned, we’ve had a lot of experience taking quite significant price increases around the world, particularly as we went through periods of significant foreign exchange headwinds. As I mentioned earlier, I think the big difference here is that the price increases are coming across the entire market in all categories. And as a result, you tend to see a little less elasticity when that happens. But we’re very prepared for that. As I mentioned earlier, very cognizant of our promotional cadence in terms of how to balance that, very cognizant of our need to bring value to our innovations to ensure that the pricing is executed successfully. But we feel pretty good about at least what we’ve seen in early days again, relative to elasticity, time will tell. But my sense is we will be able to weather this quite well given the whole market is moving, and we have a strong innovation and promotional strategy in place to continue to ensure the consumer is valued.” (Colgate Palmolive Company Q4 2021 Earnings Call, 1/28/2022)

Colgate’s CEO spoke of “pricing ladders,” and stressed “innovation that will not only get us pricing, but brings value add to the consumer should there be any temptation to trade down, particularly in the premium side of the business.” “And we will pivot as necessary as we see what’s happening in the marketplace. As I mentioned earlier, it’s not only just taking pricing, it’s how we go about executing that in the market relative to our promotional cadence, relative to our new product cadence. And that really fits into the second part of your question, which is the pricing ladder. One of the aspects of our business that we feel very good about is how we have clear distinction at price tiers and value add across the multiple price tiers in which we compete. And we have innovation planned across all those price tiers. Innovation that will not only get us pricing, but brings value add to the consumer should there be any temptation to trade down, particularly in the premium side of the business. But the important piece there is that we are looking to innovate across all of our price tiers to ensure that we continue to bring value to those consumers as they address obviously, a significant headwind around inflation in their markets.” (Colgate Palmolive Company Q4 2021 Earnings Call, 1/28/2022)

Colagate’s CEO said it was easier to raise prices “given that everyone is taking pricing” and said the company would continue to hike prices to raise their margins 

Colgate’s CEO: “we expect that we will not see as much pricing elasticity in our business, specifically our own business, as we have seen in the past, given that everyone is taking pricing.” “Noel Wallace – CEO: Sure, Kevin. So again, let’s talk to pricing elasticity. It’s early days right now, as I mentioned. But we expect that we will not see as much pricing elasticity in our business, specifically our own business, as we have seen in the past, given that everyone is taking pricing, it seems pretty consistently across all of our categories and across the world. Time will tell on that, clearly. The elasticity assumptions that we built into the P&L are quite conservative. I mean we wanted to be very careful there to ensure that we were able to adjust and have enough flex in the P&L based on how we saw the consumers react. So, my sense is we are covered there, but we shall watch this carefully to ensure that our assumptions are accurate.” (Colgate Palmolive Company Q4 2021 Earnings Call, 1/28/2022)

Colgate’s CEO: “we will continue to be bold and ambitious with our pricing because we believe getting the gross margin in the P&L… the goal is to drive EBIT margins.” “Noel Wallace – CEO: Now that may allow us to spend more against some of the opportunities we see or optimize our spending as we move forward. Likewise, as we talked about earlier – most of the call today is the pricing aspect of this. And we will continue to be bold and ambitious with our pricing because we believe getting the gross margin in the P&L, ultimately, the EBIT up is the way to continue to fuel the investment that we need to sustain the top line growth. So ultimately, the goal is to drive EBIT margins. Obviously, some challenges in the short-term that we have seen. But we think as we execute against our 2025 strategy, the category that we compete in today, the pricing, the innovation that we have in place, all will contribute to that. The program that we announced is all part of that, obviously, looking at ways to optimize our structure to ensure that we find ways to improve the profitability through the income statement.” (Colgate Palmolive Company Q4 2021 Earnings Call, 1/28/2022)

Colgate-Palmolive stressed it had continuously hiked prices

Colgate’s CEO told analysts it saw sales growth in all of its categories in 2022. “Noel Wallace – Chairman, President and CEO: Thanks, John, and thank you all for joining us this morning and I wish all of you a very Happy New Year. So I mostly wanted to focus on the year ahead today, as I think we are well positioned to deliver strong results in 2023, even as we plan for a difficult macroeconomic environment and continued uncertainty. That said, as we mentioned in the prepared remarks, we are pleased with the progress we made in 2022. We delivered organic sales growth in all four of our categories, including double-digit organic sales growth in Pet Nutrition and high single-digit organic growth in Oral Care.” (Colgate-Palmolive Q4 2022 Earnings Call, 1/27/2023)

Colgate’s CEO: “Our focus on building revenue growth management capabilities, particularly through increased use of data and analytics is driving our pricing growth in ways beyond just list price increases.” “Noel Wallace – Chairman, President and CEO: And on top of that, we continue to launch at-home whitening and professional whitening products to enhance our credibility and expand our presence in the premium segment. And our focus on building revenue growth management capabilities, particularly through increased use of data and analytics is driving our pricing growth in ways beyond just list price increases.” (Colgate-Palmolive Q4 2022 Earnings Call, 1/27/2023)

Colgate’s CEO said the company saw up to 15% price hikes over the past two years and “we have continued to take a lot of pricing and we will continue to see the benefits of that as we move into 2023.”  “Noel Wallace – Chairman, President and CEO: Yeah. Thanks, Dara. Good morning. So, again, let’s recap quickly, obviously, the strong topline growth or organic growth that we have seen across the business. We are very pleased, obviously, with finishing the year with strong momentum. Obviously, the pricing that we put into the P&L, particularly if you look on a two-year stack basis up to 15.5%, so sequentially up as we moved out of the quarter. So we have continued to take a lot of pricing and we will continue to see the benefits of that as we move into 2023.” (Colgate-Palmolive Q4 2022 Earnings Call, 1/27/2023)

Colgate-Palmolive said it would continue to hike prices in 2023 even as sales volume declined

Colgate’s CEO admitted that volume was declining “given the magnitude of pricing that we have seen” bit expected “continued pricing in the first half of this year.”“Noel Wallace – Chairman, President and CEO: Volume continues to be a challenge across the world, as you have heard, I think, throughout the earnings season, categories have pulled back and that’s expected given the magnitude of pricing that we have seen go into all geographies around the world. Our sense is will see continued pricing in the first half of this year, which we think will have a drag on volumes for the categories that we have seen particularly in the back half of this year, but that will begin to improve in the second half of the year.” (Colgate-Palmolive Q4 2022 Earnings Call, 1/27/2023)

Colgate’s CEO: “Pricing will need to continue to go through the categories in the first half of this year…we will be taking more pricing.”“Noel Wallace – Chairman, President and CEO: Pricing will need to continue to go through the categories in the first half of this year. As we announced in the prepared remarks, we will be taking more pricing and there’s a real question mark, given the magnitude of the pricing that we have seen in the back half of 2022 and the pricing implementation in 2023, the impact that we will have on the consumer. So far, if I give an overarching comment to elasticities, they have been very much in line with where we have expected.” (Colgate-Palmolive Q4 2022 Earnings Call, 1/27/2023)

Colgate’s CEO cited “a lot of pricing that we have taken across a broad section of categories.” “Noel Wallace – Chairman, President and CEO: Good momentum on Oral Care and strong innovation and a lot of pricing that we have taken across a broad section of categories and we want to ensure that we have the investment there to generate to get the pricing seated in the marketplace and continue to drive consumption growth for our retailers. So, overall, it will be another year of good investment, a good share growth we expected, and obviously, good topline growth coming through the P&L. Let me turn it over to Stan to kind of take you through how we bridged some of the aspects around gross margin and operating margin.” (Colgate-Palmolive Q4 2022 Earnings Call, 1/27/2023)

Colgate-Palmolive explicitly connected price hikes as their strategy for “margin expansion”

Colgate’s CFO said “pricing” would be a “significant” help to gross profit and “margin expansion.” “Stan Sutula – Chief Financial Officer: Sure. Thanks, Noel. And on gross profit margin, you started to see some progress, right? North America, Latin America and Africa, Eurasia, you saw improvements in the operating margin in the fourth quarter. As we look at gross profit, Noel, highlighted the pricing, that significant flow-through will help in 2022. The productivity will be a tailwind here and while material and Ranpak in particular will still be a headwind that moderates coming off of 2022. So, as you look at gross profit margin expansion, that’s going to be a benefit. But keep in mind, as you work down, we are going to have investments in advertising. We expect to increase that on a dollars and percent of sales.” (Colgate-Palmolive Q4 2022 Earnings Call, 1/27/2023)

Colgate’s CEO told analysts “driving gross margin for our company has always been fundamental” and “we are very focused on getting pricing”  ”Noel Wallace – Chairman, President and CEO: Thanks, Mark. Let me start with the end, the last question first and provide some thoughts and I will have Stan walk through you a bit more of our assumptions once again. Listen, driving gross margin for our company has always been fundamental and it’s always been the fulcrum of our P&L, and as we laid out in the prepared comments, we expect gross profit to be up in 2023. I remind you that the gross profit was down 160 basis points in the fourth quarter, if — when you exclude the impact of Red Collar. Some of the issues that we incurred in the fourth quarter, obviously, we had a mix issue with the lower skin health business that we mentioned. A little bit of a mix issue on Hill’s as well with more of the Science Diet business versus prescription diet, but we obviously had the elevated ag prices moving through there and the startup costs that as Stan mentioned earlier, that moved through the gross profit line. But step back, again, I mean, we are very focused on getting pricing in the P&L and you have seen that sequentially improve from third to fourth quarter. We expect that to benefit us next year.” (Colgate-Palmolive Q4 2022 Earnings Call, 1/27/2023)

Colgate’s CFO said the company had used their price hikes and sales to send $2.9 billion to their investors

Colgate reported funnelling $2.9 billion to shareholders through stock buybacks and dividends. “Stan Sutula – Chief Financial Officer: And the capital allocation, I think, as we look at that return $2.9 billion to shareholders. We had $900 million of net share buyback. We have paid dividends since 1895 and 60 consecutive years of increasing it. So our capital allocation strategy hasn’t changed. We think it’s the right long-term strategy and we think our investment in M&A is appropriate when we don’t have a better internal investment to do or to fill opportunities for us to fill out our model.” (Colgate-Palmolive Q4 2022 Earnings Call, 1/27/2023)