Colgate-Palmolive lifts 2026 outlook despite third-quarter revenue miss

Sales of $5.37B fell short of the $5.49B forecast, yet the company now expects higher margins and faster earnings growth for the year.

Colgate-Palmolive missed on third-quarter revenue and raised its full-year outlook anyway, which is the part investors will care about. Sales came in at $5.37B against $5.49B expected, while earnings per share of $0.97 beat forecasts by $0.02.

The upgrade is real but uneven. Base Business earnings per share growth is now guided at 5% to 7%, from a previous mid-single-digit figure, and the gross margin is expected to rise on both a GAAP and Base Business basis, where the company had foreseen it roughly flat. Management, in the words of Chairman and chief executive Noel Wallace, says its focus on growth while building flexibility into its profit and loss account gives it confidence to handle consumer uncertainty and macroeconomic volatility.

The sales guidance is weaker evidence. Net sales growth is now seen at 4% to 5%, against a prior range of 2% to 6%. That lifts the bottom of the range, but it also cuts the top, and a low-single-digit boost from foreign exchange is part of the figure. Organic growth, which strips currency out, is now expected to be broadly in line with the nine-month pace, replacing a prior outlook of 1% to 4%. With about two-thirds of net sales earned outside the US, the currency help can fade as exchange rates move, and the sales outlook would then lose some of its support.

The margin and earnings upgrade also has to be delivered against a weak spot at home. North America was the only division without organic growth in the quarter, and management has made a return to growth there a priority. Until that happens, a beat on profit with a miss on sales reads as a company defending margins rather than one winning volume.