The global chairman and chief executive officer (CEO) of Colgate-Palmolive, Noel Wallace, on Friday said India and China were the firm's worst-affected markets in the March quarter, reporting a sales decline due to the coronavirus (Covid-19) outbreak and lockdown.
Colgate withdrew its financial guidance for 2020, citing "uncertainty and volatility" around its business due to the coronavirus outbreak.
While Colgate's March quarter organic sales increased 7.5 per cent from year-on-year, backed by growth in most regions including North America, Europe, Latin America and Africa, Asia-Pacific, India and China, bucked the trend, Wallace said.
Addressing investors in a conference call, Wallace said he remained uncertain when the lockdown would be lifted in India and how fast it would take for normalcy to return in the market.
"I was on the phone speaking with my Asia team and while manufacturing has improved from the first phase of the lockdown, there is still significant supply chain disruption and on stock going into retail stores. The impact of this will be visible in the second quarter," he said.
Colgate is the largest oral care company in India. The domestic unit is yet to declare its financial results for the January-March period.
However, comments from Wallace come at a time when most global firms have been pointing to the scale of the impact on their Indian operations due to the lockdown.
On Wednesday, Mondelez, the owner of Cadbury, and the largest chocolate maker in India, said the firm went "absolutely blank" when the lockdown began on March 25, with close to "zero sales" during the period.
"When the original lockdown was announced, it was impossible to get people into these units given the fact that we have multiple plants. And, to have people from the distribution centres to be able to supply to the distributors, it was impossible to even get trucks,” he said.
On Thursday, Hindustan Unilever, the Indian unit of Unilever, reported a sharp volume decline of 7 per cent in January-March, which was more than the volume decline (of 4 per cent) it had reported during the quarter when demonetisation was announced in India (November 2016).
Colgate joins a list of international companies who've withdrawn their 2020 outlook in recent weeks. Among them include names such as Unilever, Coca-Cola, PepsiCo, Mondelez, Starbucks, McDonald's and Ford Motor. Proctor & Gamble, on the other hand, trimmed its sales forecast for the year, while Nestle said there is no change to its outlook for now.
“It is important not to get carried away by the strong organic growth in January-March as the situation remains highly volatile, with significant ups and downs across categories and regions,” Mark Schneider, Nestle's global CEO said.
Most company heads have said that they see a gradual recovery, led by significant shifts in consumer behaviour.