Ads Add to Colgate’s Bottom Line

Colgate-Palmolive credited an 18% jump in worldwide ad spending for a 19% increase in earnings for its most recent quarter.

In an earnings call with analysts yesterday, CEO Ian Cook reported that the consumer packaged goods giant’s revenues had hit an all-time high of $805.9 million, up 17% from the previous year’s period. Earnings hit $493.8 million, up about 19% over the previous year. Facing higher commodity costs, Colgate raised prices on many of its items, which the company was able to balance out with an 18% jump in worldwide ad spending.

“Higher advertising spending behind regular and new products worldwide drove market share across categories,” Cook said in a written statement. “We are confident the strong top-line growth will continue. Our new product pipeline is full and we plan to support our strong momentum with continued high levels of advertising worldwide.”

Colgate Total Advanced Clean and Colgate Max Fresh were among the many top performers cited in the report. Newcomers like the Colgate 360-degree Sonic Power battery toothbrush, Irish Spring Moisture Blast and Softsoap liquid soap featuring new packaging were also well received.

Ken Harris, a consultant with Cannondale Associates, Evanston, Ill., said Colgate-Palmolive’s strong performance comes as no surprise, despite the current economic crunch.

“People don’t stop brushing their teeth in a recession,” he said. As for Colgate-Palmolive’s strategy of boosting ad spend, “a lot of companies look at downtimes as a way to achieve hegemony in their overall business,” he said.

As part of its strategy to continuously innovate, the company is launching two new products in the third quarter