Colgate 2Q17 Earnings Call Notes

Ian Cook – Chairman, President & CEO

Another challenging quarter

“Suffice it to say as we said in the press release, this indeed was another challenging quarter and as I think we all know, the industry continues to face global market volatility and we have seen a further slowdown in consumer demand in several key markets, most especially the U.S. Southeast Asia and South Pacific.”

Foreign exchange headwind has lessened

“We’re also encouraged that our foreign exchange headwind have lessened over the past several quarters and raw material costs are increasing at a more modest rate. We believe consumer usage of our products have remained broadly stable in the vast majority of market, which would be the basic category takeaway should normalize going forward.”

Natural segment is growing faster than average

“t’s suffice to say that the Natural segment is growing faster than the average growth of the category, which is what makes it attractive. We of course have participated in this segment for quite a while, particularly in markets where it’s important Asia or even go back to now more than decade ago acquisition of Tom’s of Maine here in the United States, which continues to grow very, very nicely.”

Consumers tend to buy more premium online

“What we observe on eCommerce thus far is that the consumer is actually — tends to buy more premium and even if they’re not buying the premium brands, they tend to buy in multiples. So, in fact the eCommerce behavior is favorable to us from a consumption point of view and if you look at the Hill’s business, 15% of the Hill’s business in the U.S. on eCommerce is subscription. So that means once they buy it one time, they’re signing up to regular delivery of that diet over time, which is we believe a good business model for our brand.”