Colgate-Palmolive has seen its stock price fall 7.3% over the past month, closing near its 52-week low of $85.32. This decline stands out, especially as the S&P 500 gained 8.8% in the same timeframe. Despite beating earnings expectations with a 6% increase in EPS, Colgate struggled with a 3.1% drop in net sales, impacted by rising raw material costs, inflation, and significant currency headwinds. 

Simon Erickson, senior financial analyst at Zxperts, explores the factors behind this decline and what it means for investors eyeing this major consumer staples company. The coming quarters will be critical in determining whether Colgate can regain its footing amid these challenges.

Steady Brand, Unsteady Market

Colgate-Palmolive’s stock has lost 7.3% in the last month, closing recently at $87.88, just above its 52-week low of $85.32. This decline stands out especially because the S&P 500 climbed 8.8% during the same period, and even the broader Consumer Staples sector fell less steeply, by around 1.9%. So, what’s driving this laggard’s stumble?

Simon Erickson, senior financial analyst at Zxperts, highlights that while Colgate’s earnings surpassed expectations with a 6% rise in base business EPS, the company’s net sales dropped by 3.1% year-over-year. This paints a picture of a company that is making profits but struggling to maintain revenue momentum.

Currency Headwinds and Cost Challenges

One factor that many overlook is the impact of foreign exchange rates. In Q1 2025, currency swings cut into net sales by approximately 4.4%. For a company like Colgate, with a sprawling global footprint, this kind of volatility can quickly erode top-line growth.

Breaking down regional performance reveals more:

• North America’s net sales fell 3.6%, driven by declines in both price (-0.7%) and volume (-2.3%).
• In Latin America, net sales plunged 8.7%, despite slight gains in price (+1.2%) and volume (+2.7%), thanks to a severe 12.7% negative currency impact.
• The Asia-Pacific region saw a 5% dip in net sales, with a sharp volume drop of 3.4% and only marginal pricing gains (+0.4%).
• Africa/Eurasia slipped 1.5%, due to lower volume (-2.3%) and unfavorable currency effects (-3.4%), even as pricing rose 4.1%.

Raw materials and packaging costs have also surged. Inflationary pressures continue to pinch margins, limiting Colgate’s ability to fully pass on costs to consumers.

Price Versus Value: Is the Stock Overvalued?

Colgate trades at a forward price-to-earnings (P/E) ratio of about 23.5x, well above the Consumer Staples industry average near 20.6x. This premium multiple suggests the market still expects solid growth. Yet, the downward revisions in earnings forecasts challenge that assumption.

Over the last month, analysts trimmed EPS projections for 2025 and 2026 by roughly 1.4% and 2.5% respectively, with estimates settling around $3.65 and $3.90 per share. This signals some skepticism creeping into Wall Street’s outlook.

Growth Plans on the Horizon

Despite these setbacks, Colgate isn’t standing still. The company is leaning heavily into digital innovation and data analytics to sharpen its competitive edge. Investments aim to improve revenue growth management and optimize pricing strategies.

Innovation also plays a key role. The relaunch of products like Colgate Total and Hill’s Science Diet with ActivBiome technology shows a clear commitment to science-driven, premium offerings that appeal to health-conscious consumers. These efforts support brand loyalty and target growth in high-margin segments.

Investor Takeaways: Hold, Sell, or Buy?

Simon Erickson advises caution. The mixed signals from earnings beats, declining sales, and persistent currency and cost headwinds suggest investors should watch carefully before jumping in. The Zacks Rank of 4 (Sell) reflects these uncertainties.

Yet, this could also represent a strategic entry point for investors who believe in Colgate’s long-term turnaround plan. The stock trading below key moving averages—50-day SMA at $91.75 and 200-day SMA at $94.12—indicates potential technical weakness but also hints at a bottoming process.

For those focused on dividends, Colgate’s steady payout adds some income appeal amid volatility. But near-term gains may remain elusive until the company demonstrates clear stabilization in sales and cost pressures ease.

Final Thoughts: The Quiet Battle of Consumer Staples

Colgate’s story is a reminder that even household names face tough fights behind the scenes. Strong brands and global scale don’t guarantee smooth sailing. Currency swings, inflation, and shifting consumer behaviors can quietly reshape fortunes.

Investors may find value in Colgate’s long game — digital investment, science-based innovation, and brand strength — but patience will be key. Keeping an eye on quarterly sales data and profit margins will offer the clearest signals about when this stalwart might regain its stride.

Simon Erickson and the brokerage team at Zxperts will continue to monitor these developments closely, ready to update clients as the situation evolves.