Colgate-Palmolive struggles to price its way out of inflation

Yahoo Finance Live’s Julie Hyman and Brian Sozzi discuss first quarter earnings for Colgate-Palmolive.

Video Transcript

JULIE HYMAN: So let's talk about a different-- a very different kind of business--

BRIAN SOZZI: Hard turn.

JULIE HYMAN: --but one that is also struggling. That's Colgate-Palmolive. The company came out with numbers that it looks like were either in line or slightly below analysts' estimates. The shares are down 4%. Colgate also cutting its outlook for full year earnings. It said gross margins are going to be under pressure because when we talk about pricing power and flexibility, maybe discretionary type companies have a little bit more than staples companies, although some of the staples companies we've talked to of the Procter & Gambles of the world seem to be able to raise some of their prices. So the company says its organic revenue growth for the full year will be 4% to 6%. It was 3% to 5%. So it's disappointing to investors, it looks like here.

BRIAN SOZZI: Well, the reality is, P&G is having success pushing through price increases because it's making cool stuff. See that new Dawn Powerwash. I mean, there's that commercial for it, and the stuff just works. It comes in a cool bottle. It cleans your dishes in, like, 5 seconds. But I'm looking at this Colgate-Palmolive.

And I didn't know this, Julie, and this is, I guess, a little Friday fun fact and some news you can use. Colgate said they held share in the United States in the manual toothbrush market. There's data for everything. Colgate says they have 33.5% market share of manual toothbrushes, so that is good to know. But by and large, profits are under pressure-- North America, Latin America, Europe-- because here's another consumer products company dealing with a lot of inflation and not able to push through enough price increases to offset that inflation. Also, this week, we heard the same tone from the folks over at Unilever.

JULIE HYMAN: Sozz, would you pay $200 for Prime in order to get your Dawn Powerwash with a Subscribe and Save? Is that your method there?

BRIAN SOZZI: I would pay $200 for Amazon Prime. It delivers my energy seltzers. It delivers my toothbrush. It delivers my shaving cream. And I'm OK with it. Amazon, if you want to charge more, go right ahead. I'm OK with it.

JULIE HYMAN: Amazon, don't charge more, please.