Colgate-Palmolive Company (CL) turned in a solid fourth quarter that beat Wall Street's expectations, proving its core businesses remain resilient even as challenges pile up in other corners of the portfolio.

The consumer goods giant posted adjusted earnings of 95 cents per share, clearing the consensus estimate of 91 cents. Revenue came in at $5.230 billion, ahead of the $5.118 billion analysts were expecting. Not bad for a company navigating a tricky global environment.

The Good News: Core Categories Still Humming

Net sales climbed 5.8% during the quarter, with organic sales up 2.2%. That organic number would've looked even better if not for a 0.9% drag from lower private-label pet food volume, which the company is strategically de-emphasizing.

Colgate continues to dominate where it matters most. The company held onto its commanding global toothpaste lead with a 41.3% year-to-date market share, and it still owns the manual toothbrush category with 32.4% share. When you control that much shelf space in oral care, you've got pricing power and distribution muscle that's hard to replicate.

CEO Noel Wallace highlighted the breadth of the performance: "Net sales and organic sales grew in every category during the quarter, led by strength in oral care and pet nutrition, excluding private label."

Gross profit rose to $3.146 billion from $2.982 billion a year earlier, though both GAAP and base business gross profit margins dipped 10 basis points to 60.2%.

The Bad News: Skin Health Takes a Hit

Here's where things get messier. Operating profit dropped sharply to $3.306 billion from $4.268 billion a year ago, and operating margin contracted from 21.2% to just 16.2%.

The culprit? A massive non-cash, after-tax charge of $794 million to write down goodwill and intangible assets tied to the skin health business. Translation: Colgate overpaid for these assets and is now admitting they're worth considerably less than expected.

The company pointed to lower-than-expected category growth and weaker-than-expected performance, particularly in China, as reasons for lowering its outlook on the skin health business, primarily the Filorga brand. China's slowdown is hitting plenty of consumer brands right now, but it stings extra when you've got elevated asset values on the books.

Colgate-Palmolive ended the quarter with $1.288 billion in cash and equivalents.

Looking Ahead

For fiscal 2026, the company is guiding toward sales of $20.79 billion to $21.61 billion, slightly above the analyst consensus of $20.98 billion. That's a vote of confidence from management that the core business momentum can continue.

Wallace struck a balanced tone looking forward: "As we begin 2026, while we expect the difficult operating environment and slower category growth to continue in the short term, we are operating from a position of strength and are confident that the changes we are making will enable us to deliver consistent, compounded earnings per share growth and drive shareholder value in the long term."

Investors seemed to like what they heard. Colgate-Palmolive shares traded up 3.67% to $88.22 following the report, suggesting the market is willing to look past the writedown and focus on the strength in the company's flagship categories.