Oct 30, 2026 earnings call — Margin gains, Hill's strong growth, U.S. turnaround work
Free cash flow rose 7% and the company returned $2.2 billion to shareholders year-to-date.
Revenue $5.4B (est $5.3B) · EPS $0.97 (est $0.93)
Key quotes
"So, funding-the-growth drove over 290 basis points of offset to the material inflation, and that is really the hard work of all of the Colgate people around the world driving that performance."
"We are scaling our AI capabilities globally with PromoAI now in many key markets, as well as with our proprietary AI innovation platform that has made our new product ideation process significantly faster than before."
"Prescription Diet dog was up behind mid-single digits. Prescription Diet cat was up double digits."
Analyst Q&A 15
2027 outlook and costs
Q (Peter Galbo · BofA): Analyst asked for early knowables on 2027, especially cost outlook and puts/takes given elevated costs.
A: Management said they will not give 2027 guidance until Q1 next year. They expect the elevated cost environment to continue through Q4 and into early next year and are focused on levers they can control.
"But clearly, the business model we're executing right now is helping to offset a very stubborn cost environment that we're experiencing around the world." — Noel Wallace (CEO·CHAIR)
gross margin drivers and ad ROI
Q (Dara Mohsenian · Morgan Stanley): Analyst asked what drove the gross margin upside and confidence to raise guidance, and asked about pricing and ad spend ROI.
A: Management said pricing, productivity programs and portfolio premiumization drove margin upside. They noted funding-the-growth and SG&A productivity offset material inflation and they feel good about advertising ROI while optimizing spend with AI tools.
"So, funding-the-growth drove over 290 basis points of offset to the material inflation, and that is really the hard work of all of the Colgate people around the world driving that performance." — Stan Sutula (CFO)
Hill's performance and outlook
Q (Peter Grom · UBS): Analyst wanted detail on Hill's quarter versus expectations, category and market share, and how growth evolves.
A: Management said Hill's had a terrific quarter, likely above expectations, with 6.5% ex-private label growth and market share gains. They highlighted therapeutic strength, wet and cat segments, and manufacturing capacity improvements supporting volume.
"Hill's had a terrific quarter, probably above our expectations, but that team is pretty consistent in delivering against that, which is great to see." — Noel Wallace (CEO·CHAIR)
SG&A efficiency and SGPP
Q (Lauren Lieberman · Barclays): Analyst asked how much SG&A improvement comes from SGPP vs other productivity and whether it's a new run rate.
A: Management said SG&A improvement is a mix of underlying productivity and the Strategic Growth and Productivity Program (SGPP). They will invest some proceeds back into advertising, AI and skills, and some will go to the bottom line; SGPP runs through 2028.
"SGPP, as a reminder, goes out through the end of 2028, so we have more that will be coming, and we have talked about that in the past." — Stan Sutula (CFO)
Latin America: Brazil and Mexico
Q (Steve Powers · Deutsche Bank): Analyst asked for updates on Latin America, reasons for Mexico slowdown, and Brazil momentum into year end.
A: Management said Latin America was solid overall, up 6% with volume growth. Brazil was strong with market share gains and premiumization, while Mexico faced a weak consumer backdrop and retailer-specific challenges that should ease into 2027.
"Mexico was hit with a difficult consumer backdrop, obviously some uncertainty in the categories of which we compete, but also some very specific retailer challenges that we had in the quarter." — Noel Wallace (CEO·CHAIR)
U.S. go-to-market and premium push
Q (Filippo Falorni · Citi): Analyst asked what parts of the U.S. plan are working for toothpaste improvement and whether more pricing is likely next year.
A: Management said pricing will be required in some markets to offset costs and they are repowering the North America marketing model toward premium innovation, omni-demand, AI and stronger go-to-market connections. They are restructuring commercial teams to better capture premium value.
"Structurally, we built our go-to-market for a world of channels, and what we're seeing today is a world that runs on connections." — Noel Wallace (CEO·CHAIR)
consumption and category growth globally
Q (Bonnie Herzog · Goldman Sachs): Analyst asked about consumption trends with high gas prices, which markets are strong or pressured, and category growth assumptions.
A: Management said global category growth is about 1.5%-3%, with emerging markets at 3%-5% and developed markets around 1.5%-2%. They reviewed region specifics: Asia mixed (China challenged, India strong), Latin America solid, North America pressured but improving, Europe flat.
"We're seeing growth in the 1.5%-3% globally, with obviously emerging markets driving a faster growth in that 3%-5% range, and the developed markets driving growth in that 1.5%-2% range." — Noel Wallace (CEO·CHAIR)
Hill's growth drivers and margins
Q (Olivia Tong · Raymond James): Analyst asked if Hill's volume-led growth is sustainable, whether distribution widened, and why margins fell slightly despite sales upside.
A: Management said Hill's strategy focused on growing segments like cat and wet is working and they are rolling out Fresh carefully for long-term sustainable growth. They said slight operating margin decline reflects investments in advertising, brand building and the Fresh launch while company EBIT margins rose overall.
"So again, the strategy that we are executing against Hill's, perhaps very redundantly boring because it is working for us, and we clearly see growth opportunities in the growing segments, and we are executing against those really well." — Noel Wallace (CEO·CHAIR)
inventory and APAC durability
Q (Chris Carey · Wells Fargo): Analyst asked whether North America saw destocking and whether APAC momentum is durable or just comps from a weak year.
A: Management said there was no meaningful inventory destocking in Q3. For APAC, they reported roughly 5% organic growth led by India and better premium execution in China, with Hawley & Hazel improving though still undergoing structural changes.
"No, we did not see any meaningful inventory destocking in the quarter." — Noel Wallace (CEO·CHAIR)
cost hedging and near-term visibility
Q (Kaumil Gajrawala · Jefferies): Analyst asked whether current hedges and initiatives put Colgate ahead of accelerating cost pressure and if costs are roughly set for the near term.
A: Management said they have locked in costs where possible for Q4 and are comfortable with current guidance, but commodity and logistics volatility will remain. They emphasized focusing on controllable levers: purchasing, productivity (SGPP), and RGM while noting FX is volatile.
"While we're not going to provide 2027 guidance, I don't see the headwinds on commodities lightening up here as we exit the year, and we have to deal with the movement FX that Noel referenced earlier." — Stan Sutula (CFO)
Fresh and emerging markets execution
Q (Robert Ottenstein · Evercore): Analyst asked if Hill's momentum and Fresh feel like sustainable acceleration, and how Colgate manages many smaller emerging markets.
A: Management said they see long-term opportunities in underpenetrated segments (cat, wet, Small Paws) and are deliberately building Fresh for sticky, sustainable growth. For emerging markets like Africa and Southeast Asia, they are aligning portfolios, leveraging European innovations, and investing in countries like Nigeria and Bangladesh for long-term growth despite volatility.
"The biggest opportunity we see is obviously the continued low brand penetration that we're seeing in some of the growing segments, like cat, like wet, like Small Paws." — Noel Wallace (CEO·CHAIR)
North America toothpaste and Europe pricing
Q (Andrea Teixeira · JPMorgan): Analyst asked whether U.S. toothpaste improvement is due to normalization or promo changes and how Europe can pass on costs next year.
A: Management said U.S. premiumization and advertising work are underway and will take time; they are building capabilities and AI-driven personalization to convert brand equity to purchases. In Europe they highlighted strong premium execution (whitening, Colgate Total relaunch, elmex) and will continue premium innovation and advertising to support pricing where possible.
"The growth numbers are quite startling when you look, particularly within the toothpaste category, the difference between the super premium, the premium, and the mid-price and value are multiples of 2-3." — Noel Wallace (CEO·CHAIR)
pricing composition and RGM levers
Q (Michael Lavery · Piper Sandler): Analyst asked how much pricing is list increases versus mix, price-pack, promo optimization, and if current pricing levels will suffice if costs stay high.
A: Management said revenue growth management uses six or seven levers: premium innovation, list price, price-pack architecture, promo optimization and mix. They use proprietary PromoAI to optimize promotions and will apply different pricing approaches by market depending on FX and cost inflation.
"On the essence of your question, how much is new price, list price versus other aspect, we have six or seven levers we pulled under revenue growth management." — Noel Wallace (CEO·CHAIR)
total cost inflation amount and timing of pricing
Q (Robert Moskow · TD Cowen): Analyst asked current absolute cost inflation versus prior ~$300 million and when pricing decisions (list price) are known, e.g., January timing.
A: Management said cost inflation remains roughly in the original $300± million range and many Q4 inputs are locked in. On pricing timing, they said approaches will be market- and category-dependent and emphasized using innovation in developed markets and list price in some emerging markets.
"I would say roughly, it is still in the same original range of $300± million, and that is with our locked in." — Stan Sutula (CFO)
applying China learnings to U.S.
Q (Edward Lewis · Rothschild): Analyst asked how Colgate China success and social commerce learnings can be deployed in the U.S. to capture premium value.
A: Management said many China learnings translate directly, especially social commerce and content approaches, and they have moved executive teams there to scale learnings. They are building enterprise oral care capabilities and using AI for content creation and personalization to deploy those practices globally, including the U.S.
"There are applications that translate very directly to any market around the world, and you're seeing obviously a stronger growth around social commerce, whether that's the TikTok platforms here in the U.S." — Noel Wallace (CEO·CHAIR)