The Rising Influence of Rising Affluence

[DewDiligence]

CL suffers from same malaise as PG (and other multinational consumer-products companies):

https://www.wsj.com/articles/colgates-checkup-doesnt-go-well-1516981195

Until now, Colgate-Palmolive’s shares had held up rather well amid a broader washout in the consumer-staples sector. Before reporting fourth-quarter results on Friday, its shares were up 13% over the past year. That compares with a rise of just 2% at P&G, the consumer conglomerate that counts Crest and Oral-B among its brands.

The perception among investors has been that the oral-care segment is less exposed to competitive pressure. Toothpaste brand loyalty is strong, especially compared with products such as tissues or paper towels. Given this, Colgate-Palmolive’s narrower focus on toothpaste and soaps compares well to P&G, which also sells razors, diapers and other more competitive categories.

But Colgate-Palmolive’s sales trends, nonetheless, look similar to P&G. Overall organic sales, which net out acquisitions and currency effects, rose 2% in the fourth quarter from a year earlier, compared with analyst expectations of about 3%. Overall pricing was down 1%. These are exactly the same top-line figures that P&G reported this past week.