Colgate-Palmolive's base business achieved an 8% increase in diluted earnings per share during the second quarter of 2026, rising to $0.99 per share. This improvement was supported by a 140-basis-point increase in gross margin, which reached 61.5%, along with 2.4% organic sales growth. These gains more than compensated for the effects of higher advertising spending and restructuring charges amounting to $129 million.
In contrast, GAAP earnings per share dropped 5% to $0.86. The $0.13 difference between GAAP and base EPS stemmed from the expenses linked to Colgate's Strategic Growth and Productivity Program. These costs reduced net income by approximately $104 million. Nonetheless, base business operating profit climbed 5% to $1.15 billion. Gross profit increased to $3.3 billion, compared to $3.07 billion in the same period of the previous year.
North America experienced a 3% decline in organic sales, primarily driven by a 3.9% drop in volume. Although a 0.9% increase in pricing partially offset this, it was not enough to prevent the overall sales decline. On the other hand, Latin America saw a 5.3% rise in organic sales, supported by 2.6% volume growth and 2.8% price increases. Asia Pacific also posted strong results, with 5.2% organic sales growth fueled by 4.1% volume gains.
The company reported 2% organic growth in the Middle East, Europe, and Africa. The pet nutrition segment led by Hill’s Pet Nutrition showed 2.1% sales growth. This occurred despite a 1.8% decline in organic volume. Price increases of 3.9% compensated for the volume drop. Colgate also experienced a 0.4 percentage point headwind in organic sales. This came from its decision to exit private-label pet food. The company has shifted resources to strengthen its branded offerings. It aims to grow its pet nutrition business.
Colgate's free cash flow before dividends surged to $1.48 billion in the first half of the year, up from $1.25 billion in the same period last year. However, the company adjusted its full-year guidance. It now expects base business earnings per share to increase at a mid-single-digit pace, a slight revision from its initial forecast of low- to mid-single-digit growth.
Gross margin is projected to remain stable for the remainder of the year instead of declining, as the company benefits from continued pricing strategies and margin improvements. Colgate is also committing to reinvesting these gains, with a plan to maintain advertising spending at $777 million, a 15% increase from $678 million. The focus will be on premium products, science-led innovation, and omnichannel demand generation.
“Our growth momentum continued in the second quarter, as we delivered strong broad-based top- and bottom-line results, despite a difficult operating environment,” said Noel Wallace, Chairman, President, and Chief Executive Officer of Colgate-Palmolive. “We delivered these strong results while continuing to invest in the long-term health of our business. We saw a 15% increase in advertising this quarter.”