(Reuters) - Colgate-Palmolive (NYSE:CL) raised annual organic sales and profit forecasts on Friday, banking on price hikes and resilient demand for its self-care and pet nutrition products.
The company, like several other consumer goods makers, has consistently increased product prices to fight steep costs of raw materials and packaging, and wage pressures.
"Advertising spending increased significantly in the quarter to drive brand health and in support of our strong innovation and pricing activity," CEO Noel Wallace said. "Strong investment levels should continue in the back half of the year as we work to deliver balanced organic sales growth."
Higher prices aided the toothpaste maker's gross margin, which expanded 80 basis points to 57.8% in the quarter ended June 30.
Consumer goods giant Procter & Gamble (NYSE:PG) beat sales expectations on Friday, as demand for its cleaning products and paper towels remained undeterred despite multiple price hikes.
Colgate-Palmolive also topped Wall Street estimates for second-quarter sales and profit.
North America, which accounted for 20% of the company's sales, saw a slight drop in market share in the toothpastes and toothbrushes categories, even as demand stayed steady for its home and personal care segments.
Colgate-Palmolive expects annual organic sales to grow between 5% and 7%, compared with previous forecast of 4% to 6% growth.
It expects full-year adjusted earnings per share growth to be at the high end of mid-single digits, compared with previous forecast of growth in mid-single digits.
Organic sales for the Hill Pet Nutrition brand, which contributed 22% to company's sales, grew 10.5% in the quarter, driven by demand in the U.S. and Europe.
Its overall quarterly sales rose about 8% to $4.82 billion, compared with analysts' estimate of $4.69 billion, according to Refinitiv data.
Excluding items, profit per share was 77 cents, compared with expectations of 75 cents per share.