Colgate-Palmolive Company

Good morning. Welcome to today's Colgate-Palmolive first quarter 2026 earnings conference call. This call is being recorded and is being simulcast live at www.colgate-palmolive.com. Now for opening remarks, I'd like to turn this call over to Executive Vice President, Investor Relations, Claire Ross.

Thank you, Drew. Good morning and welcome to our first quarter 2026 earnings release conference call. This is Clay Ross, Executive Vice President, Investor Relations. Today's conference call will include forward-looking statements. Actual results could differ materially from these statements. Forward-looking statements inherently involve risks and uncertainties and are made on the basis of our views and assumptions at this time. Please refer to the earnings press release and our most recent filings with the SEC, including our 2025 annual report on Form 10-K, and subsequent SEC filings, all available on our website for a discussion of the factors that could cause actual results to differ materially from these statements. These remarks also include a discussion of non-GAAP financial measures, which exclude certain items from reported results, including those identified in Tables 3 and 6 of the first quarter earnings press release. A full reconciliation to the corresponding GAAP financial measures and related definitions are included in the earnings press release. Joining me on the call this morning are Noel Wallace, Chairman, President, and Chief Executive Officer, Stan Sutula, Chief Financial Officer, and John Fauché, EVP, M&A, and Special Projects. Noel will provide you with his thoughts on our results and our 2026 outlook. We will then open it up for Q&A.

Thanks, Claire, and good morning, everyone. We're pleased with how we started the year as we delivered strong top and bottom line growth. Organic sales growth accelerated from the fourth quarter, driven by improved volume performance, particularly in Asia Pacific. Excluding the impact of private label pet food exit, we grew both volume and pricing in all four categories and four of five divisions. Our sales growth was led by emerging markets, the regions where our strong global brands generally have higher market shares and the greatest scale advantages. We believe emerging markets are creative in terms of growth prospects and are investing in them accordingly. And we use the strong net and organic sales growth to deliver gross profit, operating profit, earnings per share, and free cash flow growth, while still increasing investment in our brands and capabilities. This encouraging start to the year gives us confidence in our outlook for the balance of the year, though significant increases in raw material and packaging costs we have built into our guidance to reduce our expectations for gross margin for the year. When I spoke to you on our Q4 2025 call, I talked about the strength of our 2030 strategic plan. It's the choices that we made in building this plan, along with the flexibility we've built into our P&L, that allow us to deliver short-term results in a volatile environment while simultaneously building for the long term. And best-in-class companies need to do both. short-term results, and long-term strategy. Our global brands are driving broad-based growth by geography, by category, and with volume and pricing. Our investments in advertising through our omni-channel demand generation model keep our brands top of mind with consumers in the moments that matter, and we continue to drive higher ROI even as we increase spending. We have built our capabilities in areas like innovation, data, analytics, digital, AI, and will continue to invest behind them and scale them across the organization. This leaves us well-positioned to delight consumers with perceivable superior products to accelerate category growth and drive market share improvement. We believe our efforts in RGM, promo AI, and funding the growth give us the ability to drive profit and EPS growth, even in a period of significant cost inflation. And our strategic growth and productivity program is another great example of how we're working to deliver in the short term while building up for our 2030 strategy. This morning, we announced an update along with annualized savings target of 200 to 300 million, with the majority of the savings focused in 2027 and 2028. This is not an extension of the program, as we still expect the program to be completed by the end of 2028. The savings will enable us to fund investments and capabilities to deliver on the 2030 strategy, as well as to drive consistent, compounded dollar-based EPS growth. More importantly, the changes we are making to our organizational structure by reducing complexity will help us build a more agile company that can thrive in an omnichannel environment. There is still uncertainty in how the rest of 2026 will play out, where oil will be what will happen with interest rates, how the consumers will respond. But I can tell you this, that we believe we've built a model that can deliver in this environment while setting us up for long-term success. And with that, I'll take your questions.