Research Update: Colgate-Palmolive Co. Outlook Revised To Negative On Margin Pressure; 'AA-' Rating Affirmed

U.S.-based Colgate-Palmolive Co. continues to report margin pressure, most recently due to still high supply chain headwinds, inflation, lower organic volumes, and unfavorable acquisition-related pet nutrition mix shift. We affirmed our 'AA-' long-term and 'A-1+' short-term ratings on the global consumer products and pet nutrition company because we forecast S&P Global Ratings-adjusted leverage will improve to the high-1x area over the next 24 months. We nevertheless revised our outlook to negative from stable because Colgate-Palmolive's multiyear historic profit trend has in our opinion been at the low end compared to rating peers. We also believe the company has generally ceded market share over the last five years notwithstanding recent improvement. The negative outlook reflects the potential for a lower rating

...- U.S.-based Colgate-Palmolive Co. continues to report margin pressure, most recently due to still high supply chain headwinds, inflation, lower organic volumes, and unfavorable acquisition-related pet nutrition mix shift. - We affirmed our '##-' long-term and 'A-1+' short-term ratings on the global consumer products and pet nutrition company because we forecast S&P Global Ratings-adjusted leverage will improve to the high-1x area over the next 24 months. - We nevertheless revised our outlook to negative from stable because Colgate-Palmolive's multiyear historic profit trend has in our opinion been at the low end compared to rating peers. We also believe the company has generally ceded market share over the last five years notwithstanding recent improvement. - The negative outlook reflects the potential for a lower rating over the next 12 to 18 months if the company cannot expand market share or consistently grow adjusted EBITDA while strengthening margins to levels that are clearly above...

Research Update