http://www.morningstar.com/earnings/25192742-colgatepalmolive-company-cl-q1-2011.aspx

Colgate-Palmolive Company CL
Q1 2011 Earnings Call Transcript

Transcript Call Date 04/28/2011

Operator: Good day, and welcome to today's Colgate-Palmolive Company First Quarter 2011 Earnings Conference Call. Today's call is being recorded and is being simulcast live at www.colgate.com. Just as a reminder, there will be a slight delay before the question-and-answer session will begin due to the web simulcast.

At this time, for opening remarks, I would like to turn the call over to Senior Vice President of Investor Relations, Ms. Bina Thompson. Please go ahead.

Bina H. Thompson - SVP, IR: Thank you, Lisa. Good morning, everybody, and welcome to our first quarter 2011 earnings conference call. With me today are Ian Cook, Chairman, President and CEO; Dennis Hickey, CFO; Victoria Dolan, Corporate Controller; and Elaine Paik, Treasurer.

This conference call will include forward-looking statements. These statements are made on the basis of our views and assumptions as of this time and are not guarantees of future performance. Actual events or results may differ materially from these statements.

For information about certain factors that could cause such differences, investor should consult our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and available on our website, including the information set forth under the captions Risk Factors and Cautionary Statement on Forward-Looking Statements.

We will discuss organic sales growth, excluding foreign exchange, acquisitions and divestitures. A full reconciliation with the corresponding GAAP measures is included in the press release and is posted on the Investor Relations section of our website at www.colgate.com. We're pleased with our results as we begin 2011. As you are aware global business conditions remain challenging with sluggish category growth rates in the developed world and steeply rising commodity costs everywhere.

Despite that our volume and organic sales growth are accelerating and our global market shares are up on a year-to-date basis in toothpaste, manual toothbrushes, bar soaps, shampoos, household cleaners and fabric conditioners with balanced market share results across divisions.

Our advertising investment has also increased from the fourth quarter of 2010 to support our innovations and that is expected to further increase as the pace of new product launches quickens through the balance of the year.

Our volume growth of 2% is on top of an increase of 6% in the first quarter of 2010. We still expect full year volume growth to be in the 4% to 5% range as comparisons ease for the remainder of the year. You'll hear about new products launched and planned as we go through the division. The pipeline is as full as it has ever been.

Due to the severe rise in commodity costs, our gross margin declined year-over-year as compared with the 170 basis point increase in the year ago period and we expect our gross margin to remain around our first quarter levels for the remainder of the year as we anticipate the current cost environment to be largely offset by another year of very strong funding of the growth savings and appropriate price increases.

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