Company: CL
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000021665-25-000008
Chunk: 103

Company: COLGATE PALMOLIVE CO
Filing Date: 2025-02-13
Form: 10-K
Item: Item 7
Chunk 103
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 States’ February 2025 executive orders imposing tariffs on imports from Canada, Mexico and China, may contribute to inflationary pressures and, as a result, may impact consumer demand for our products. We are following the dynamic situation closely and evaluating the impact of such tariffs and any retaliatory actions taken by other countries on our business, results of operations, cash flows and financial condition. While we have made and will make efforts to mitigate the impact of these and any additional tariffs imposed by the United States and/or other countries, they could impact the cost and/or price of our products, the cost and availability of raw and packaging materials and commodities and/or consumer demand for our products due to, among other things, the impact of such tariffs on the global economy, inflationary pressures or geopolitical relations. 

Such inflation and developments in trade relations as well as high interest rates may negatively impact consumer consumption or discretionary spending and/or change their purchasing patterns by foregoing purchasing certain of our products or by switching to “private label” or to our lower-priced product offerings. Although we continue to devote significant resources to support our brands and market our products at multiple price points, these changes could reduce demand for and sales volumes of our products or result in a shift in our product mix from higher margin to lower margin product offerings. In light of this challenging environment, we expect continued volatility across all of our categories and it is therefore difficult to predict category growth rates in the near term.

28

(Dollars in Millions Except Per Share Amounts)

Given that approximately two-thirds of our Net sales originate in markets outside the U.S., we have experienced and will likely continue to experience volatile foreign currency fluctuations, particularly in Argentina and Türkiye, which are considered hyper-inflationary economies. Effective January 1, 2025, we designated Nigeria as a hyper-inflationary economy. Consequently, the functional currency for our Nigerian subsidiary will be the U.S. dollar and the impact of all future Nigerian currency fluctuations will be recorded in income. However, this designation is not expected to have a material impact on the Company's Consolidated Financial Statements. As discussed above, we continue to experience higher raw and packaging material costs, including the impact of transactional foreign exchange. While we have taken, and will continue to take, measures to mitigate the effect of these conditions, such as our funding-the-growth and revenue growth management initiatives, in the current environment it may become increasingly difficult to implement certain of these mitigation strategies. Should these conditions persist, they could adversely affect our future results.

While the global