Colgate-Palmolive, a manufacturer of toothpaste, increased its projections for organic sales and yearly profit on Friday. This came after the company’s high-priced products continued to outpace second-quarter predictions.

In comparison to a 16% increase in the previous year, organic sales in the Latin American division, a significant revenue-generating region, increased by 18.8% during the quarter.

Increasing its advertising expenditures also assisted the business in fending off growing competition from less expensive private brands.

Despite continuous price increases, consumer packaged goods businesses like Kimberly-Clark and Colgate-Palmolive have claimed increased sales volumes due to stable demand.

Colgate-Palmolive was able to offset increased raw material and packaging costs with higher product pricing, which allowed the company to increase its gross profit margins by 280 basis points to 60.6% over the course of the quarter.

“The strong levels of investment should continue in the balance of the year as we focus on building brand health and scaling the capabilities needed to drive growth in both the short and long term,” said CEO Noel Wallace.

Colgate-Palmolive had previously predicted mid- to high-single-digit yearly profit growth. Now, it forecasts between 8% and 11%.

The previously anticipated 5% to 7% rise in organic sales for the entire year was revised to a range of 6% to 8%.

In the second quarter, Colgate-Palmolive’s product prices increased by 4.2%. Its organic volumes increased 4.7% in the quarter compared to a 3% decline in the previous year.

LSEG data shows that the business reported a quarterly adjusted profit of 91 cents per share, which was higher than the average expectation of 87 cents by analysts.

(Adapted from Reuters.com)

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