colgatepalmolive co’s laser focus on improving margins and strengthening profit appeared to pay off as continued price increases helped the consumerproducts company beat earnings expectations and raise its fullyear outlook but the stock cl fell 3 in midday trading enough to lead its peer group xlp in losses and to buck the rally in the broader stock market as volume declined and market share in some products took a hit from reduced promotions on the postearnings conference call with analysts chief executive noel wallace said that coming out of the “worst rawmaterial environment in decades” the “key focus” was to restore gross margins through pricing and productivity “the key to do this is getting pricing in the pl” wallace said with pl referring to profit and loss or the company’s bottom line he said that can’t be done with just one round of pricing “it needs to be consistent and deliberate and purposeful” the company reported earlier friday adjusted secondquarter profit that beat expectations and sales that rose 75 to top wall street forecasts sales rose even as volume fell 15 from a year ago because overall prices rose 11 which comes on top of an 85 increase in prices last year that compares with the latest government data showing that price increases have slowed to 3 the lowest increase in nearly two years higher pricing some lower promotions and costcutting helped gross profit margins improve to 578 from 57 but that was still down from 60 in the same period in 2021 so to keep the focus on improving gross margins even as the pace of input costs slow prices will continue to increase “now as we look at cost inflation slowing overall there are still places where we see margin pressure so of course we need to take additional pricing and this has had an impact on the volume” wallace said on the call according to a factset transcript also read us wholesale inflation slows to a crawl ppi shows he did acknowledge that the company may have pulled bank “a little too much” on some promotions to save money as that did hurt market share for example in north america colgate’s share of the toothpaste market was 339 year to date and its share of the manual toothbrush market was 41 compared with market shares of 343 for toothpaste and 42 for toothbrush after the first quarter when asked by an analyst whether the lost market share went to other companies or just to less spending by consumers wallace said it went to a “multitude” of competitors that didn’t cut promotions he said he’s not too worried about those “promotional” share losses however because those lost customers aren’t loyal customers but are those who are only focused on price “clearly that consumer typically responds to promotions whether it’s couponing or otherwise and they’re not that difficult to get back” wallace said “but we want to get we want to get those consumers back in a much healthier way moving forward so the overall structure of the us pl improves” basically while margins and profit remain the key focus price increases and spending cuts could continue even if they lead to some volume and share losses colgate’s stock has dropped 63 over the past three months while the consumer staples select sector spdr etf xlp has eased 18 and the sp 500 spx has gained 10