Analyst Note
| Erin Lash, CFA |While headwinds abounded in fiscal 2020 (stemming from COVID-19 and subsequent macro and political angst), Colgate navigated the uncertain landscape quite astutely. With CEO Noel Wallace at the helm, the wide-moat household and personal care operator’s playbook has centered on elevating research, development, and marketing spend (on its core mix, within adjacent categories, and throughout the digital realm) and responding to evolving consumer preferences more expeditiously. The prudence of this course was again evidenced in the fourth quarter, as organic sales shot up 8.5% (the highest quarterly growth number posted in more than 10 years), gross margins edged up 90 basis points to 61.1%, and adjusted operating margins shrank 100 basis points to 22.4% (after the firm chalked up a 210-basis-point increase in advertising spend as a percentage of sales).