CL

Colgate is exactly the kind of business quality investors prize: a 200-country consumer-staples franchise with a 60.1% gross margin, $4.20B of operating cash flow (+2.2% YoY) against only $564M of capex, and ~$1.2B/yr returned in buybacks. Roughly two-thirds of net sales come from outside the US and ~45% from emerging markets, giving durable, diversified demand for oral, personal/home care and Hill's Pet Nutrition. The MD&A frames the company around 'consistent, compounded EPS growth' and free-cash-flow growth — and on cash flow, it is delivering.

The problem is the rest of the P&L stopped compounding in FY2025. Revenue grew just 1.4% to $20.4B, but operating income fell 22.5% to $3.31B and net income dropped 26.2% to $2.13B — well below FY2024's $2.89B and even below FY2021's $2.17B. Gross profit was roughly flat (+0.7%), so the damage sits below the gross line (SG&A/charges and FX), consistent with the MD&A's emphasis on 2025 US tariff actions, retaliatory tariffs and USMCA renegotiation 'contributing to inflationary pressures' and pressuring input costs and consumer spending. EPS of $2.63 was down 25.1%; the 1.2% share-count reduction barely cushioned it.