AI Takeaway
Colgate-Palmolive (CL) delivered modest revenue growth of 1.4% to $20.4B in FY2025, but profitability fell sharply with net income declining 26.2% to $2.1B and operating income dropping 22.5%, driven by elevated SG&A costs and restructuring-related charges.
Revenue
$20.38B
++1.40% YoY
EPS (Basic)
$2.64
-25.21% YoY
Gross Margin
60.1%
-0.39% YoY
Operating Income
$3.31B
-22.54% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Net revenue grew 1.4% YoY to $20.4B in FY2025 (from $20.1B in FY2024), reflecting modest organic growth supported by pricing actions and volume gains across core oral care and personal care categories. However, the growth rate remains subdued relative to prior years.
Source: Source: 10-K Income Statement Data
Operating margin contracted sharply by approximately 500 basis points to 16.2% (from 21.2% in FY2024), as SG&A expenses rose 2.3% to $7.9B and cost of revenue increased 2.4% to $8.1B, outpacing the 0.7% growth in gross profit. This suggests elevated investment in advertising, promotion, and restructuring costs.
Source: Source: 10-K Income Statement Data
Net income fell 26.2% to $2.1B and diluted EPS dropped 25.1% to $2.63 (from $3.51 in FY2024), reflecting the combined impact of higher operating costs and likely increased below-the-line charges such as interest expense on growing long-term debt.
Source: Source: 10-K Income Statement & EPS Data
2 more insights available
Upgrade to unlockStockholders' equity has declined to just $54M while total liabilities stand at $16.0B, producing a debt-to-equity ratio of approximately 296x. Long-term debt increased 11.9% to $7.8B in FY2025, raising refinancing risk and interest cost sensitivity in a higher-rate environment. This capital structure leaves little buffer against unexpected earnings deterioration.
Source: Source: 10-K Balance Sheet Data
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $0.95 versus the $0.94 analyst consensus — a +1.1% beat for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $20.38B | $20.1B | +1.40% |
Cost of Revenue | $8.13B | $7.94B | +2.41% |
Gross Profit | $12.25B | $12.16B | +0.74% |
Operating Income | $3.31B | $4.27B | -22.54% |
Net Income | $2.13B | $2.89B | -26.20% |
EPS (Basic) | $2.64 | $3.53 | -25.21% |
EPS (Diluted) | $2.63 | $3.51 | -25.07% |
R&D Expense | $366M | $355M | +3.10% |
SG&A Expense | $7.9B | $7.73B | +2.25% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $16.33B | $16.05B | +1.77% |
Current Assets | $5.71B | $5.32B | +7.37% |
Total Liabilities | $15.96B | $15.5B | +2.99% |
Current Liabilities | $6.85B | $5.76B | +19.00% |
Stockholders' Equity | $54M | $212M | -74.53% |
Cash & Equivalents | $1.29B | $1.1B | +17.52% |
Long-Term Debt | $7.84B | $7B | +11.91% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $4.2B | $4.11B | +2.22% |
Investing Cash Flow | $-817M | $-534M | -53.00% |
Financing Cash Flow | $-3.26B | $-3.39B | +3.92% |
Share Buybacks | $1.21B | $1.74B | -30.42% |
D&A | $630M | $605M | +4.13% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 60.1% | 60.5% | -0.39% |
Operating Margin | 16.2% | 21.2% | -5.01% |
Net Margin | 10.5% | — | — |
ROE | 3948.1% | — | — |
ROA | 13.1% | — | — |
Current Ratio | $0.833 | — | — |
Debt to Equity | $295.648 | — | — |
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CL reported FY2025 revenue of $20.4B, up 1.4% YoY, but net income fell 26.2% to $2.1B due to rising SG&A costs and higher interest expenses. Diluted EPS declined 25.1% to $2.63, though operating cash flow remained strong at $4.2B.
The primary driver was a sharp increase in operating costs, with SG&A expenses rising to $7.9B and causing operating margin to contract ~500 basis points to 16.2%. Additionally, growing long-term debt (up 11.9% to $7.8B) likely increased interest expense, further pressuring net income below the operating line.
Key risks include an extremely leveraged balance sheet with a debt-to-equity ratio of ~296x and stockholders' equity of just $54M, a current ratio below 1.0x (0.83x) indicating short-term liquidity pressure, and continued margin compression from elevated SG&A spending. Foreign currency headwinds in emerging markets also pose an ongoing risk to reported results.
Yes — despite the earnings decline, CL generated $4.2B in operating cash flow (+2.2% YoY) and approximately $3.4B in free cash flow, demonstrating the resilience of its consumer staples business model. The company returned $1.2B to shareholders via buybacks and continued paying dividends, funded by this strong cash generation.
CL's balance sheet became significantly more leveraged in FY2025, with stockholders' equity collapsing 74.5% to just $54M while long-term debt rose 11.9% to $7.8B. Current liabilities surged 19.0% to $6.9B, exceeding current assets of $5.7B and resulting in a current ratio of 0.83x, which warrants monitoring for near-term liquidity management.