Colgate-Palmolive Company CL has experienced a 7.3% decrease in its share price over the past month, a notable drop that was amplified following the release of its first-quarter fiscal 2025 results.

While the company, a prominent player in the consumer staples space, has a strong brand portfolio and extensive global reach, recent headwinds have weighed on investor sentiment and highlighted vulnerabilities in its business model. The company’s share performance also lagged the broader industry’s decline of 4%, the broader Consumer Staples sector’s dip of 1.9%. In contrast, S&P 500 rose 8.8% in the same period.

CL Stock's Price PerformanceZacks Investment Research

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Closing the trading session at $87.88, the CL share price stands closer to its 52-week low of $85.32 reached on Feb. 18. It also remains below its 200-day and 50-day SMA of $94.12 and $91.75, respectively, indicating a possible sustained downward trend.

CL Trades Below 50 & 200-Day SMAsZacks Investment Research

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Colgate-Palmolive’s recent stock decline over the past month can be largely attributed to a mix of underwhelming top-line performance and unfavorable macroeconomic factors, despite earnings beating expectations. While the company posted a 6% year-over-year increase in Base Business earnings per share, its net sales declined 3.1% compared to the prior-year period.

These aspects raise a crucial question for investors: Is this a temporary setback for Colgate, or does it indicate something more concerning?

What’s Dragging Down Colgate's Shares?

Colgate has been grappling with significant challenges, including macroeconomic instability and foreign currency headwinds. Inflationary pressures, rising raw material costs and increased packaging expenses have weighed on profitability. In the first quarter, foreign exchange also hurt net sales by 4.4%.

During the first quarter, North America’s net sales dipped 3.6% year over year on a reported basis and 3% on an organic basis, led by a decrease of 0.7% in pricing and 2.3% in volume. Asia-Pacific and Latin America also showed signs of strain, where Latin America’s net sales declined 8.7% year over year as a 1.2% pricing gain and a 2.7% increase in volume were more than offset by a 12.7% unfavorable currency impact.

The Asia Pacific segment’s net sales fell 5% year over year, reflecting a 3.4% drop in volume, offset by a 0.4% rise in pricing. Organic sales also slipped 3.1% in the Asia Pacific division. Africa/Eurasia’s net sales dipped 1.5% year over year due to a 2.3% drop in volume and a 3.4% unfavorable currency impact, offset by a 4.1% jump in pricing.

Moving ahead, uncertainty and volatility across the global markets and the impact of tariffs have been challenging. In addition, consumer uncertainty and a slowdown in category pricing remain headwinds. The sales view for 2025 includes a low-single-digit negative impact of unfavorable currency exchange rates. These conditions led management to revise full-year organic sales growth guidance downward from 3-5% to 2-4%.

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CL’s Estimates Suggest a Downtrend

The Zacks Consensus Estimate for Colgate's earnings per share for the current and upcoming fiscal year has been revised downward over the past 30 days. In the past 30 days, analysts have decreased estimates for earnings for 2025 and 2026 by 1.4% to $3.65 and 2.5% to $3.90 per share, respectively. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Zacks Investment Research

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CL’s Valuation Picture

Colgate’s premium valuation is becoming a concern amid slowing growth and rising costs. The stock is currently trading at a forward 12-month P/E ratio of 23.49X, significantly higher than the industry average of 20.60X.

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Inside Colgate’s Push to Revive Growth

Despite the current headwinds, Colgate has been experiencing strong business momentum, leading to organic sales growth in the first quarter. This growth was supported by effective pricing strategies and the continued execution of its revenue-growth management initiatives. The company’s solid performance was underpinned by gains in organic sales, pricing improvements and gross profit margin expansion.

Colgate remains focused on strengthening its competitive edge by investing in digital capabilities, data and analytics to drive long-term profitability. Its strategy of offering both core and premium product innovations, increasing advertising investment and scaling operational capabilities is helping boost brand strength and deepen household penetration.

Innovation remains a cornerstone of Colgate’s growth strategy, driving both consumer engagement and market share gains. The company continues to prioritize value-added, science-based product development to meet evolving consumer needs and reinforce brand loyalty. Recent initiatives include the re-launch of Colgate Total and Hill's Science Diet with ActivBiome technology, both of which underscore Colgate’s commitment to delivering differentiated, high-efficacy solutions in its core categories.

What's the Best Move for CL Stock

Colgate-Palmolive’s recent decline highlights growing concerns about its near-term performance. Despite its strong brand and global presence, the company is facing headwinds from cost pressures, currency impacts, and softer sales across key regions. These challenges, along with a cautious outlook and a relatively high stock valuation, suggest that investors may want to take a wait-and-see approach before making any new moves. Colgate currently carries a Zacks Rank #4 (Sell).

Three Picks You Can’t Miss

United Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural carries a Zacks Rank of 2 (Buy). UNFI delivered a trailing four-quarter earnings surprise of 408.7%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1.9% and 485.7%, respectively, from the year-ago figures.

Mondelez International, Inc. MDLZ manufactures, markets and sells snack food and beverage products in Latin America, North America, Asia, the Middle East, Africa and Europe. It presently carries a Zacks Rank of 2. MDLZ delivered a trailing four-quarter earnings surprise of 9.8%, on average.

The Zacks Consensus Estimate for Mondelez International’s current financial-year sales indicates growth of 4.9% from the year-ago numbers.

BRF Brasil Foods SA BRFS, formerly Perdigao S.A., is a Brazil-based food company. It carries a Zacks Rank #2 at present. BRFS delivered a trailing four-quarter average earnings surprise of 9.6%.

The consensus estimate for BRF’s current financial-year sales indicates growth of 0.3% from the prior-year reported levels.

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Colgate-Palmolive Company (CL):Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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