Key Takeaways CHD leverages trusted brands like Arm & Hammer, OxiClean and Therabreath for steady growth.CHD adds Touchland as its eighth power brand, expanding its presence in the hand sanitizer category.International organic sales rose 4.8% in Q2 2025, fueled by higher volumes and strong brand demand.Church & Dwight Co., Inc. (CHD) continues to strengthen its market position through a robust brand portfolio, strategic pricing and ongoing innovation. The company is benefiting from a portfolio of trusted co ...

Investors interested in Consumer Products - Staples stocks are likely familiar with Grocery Outlet Holding Corp. (GO) and Church & Dwight (CHD) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings e ...

Companies within the Zacks Consumer Products – Staples industry are navigating a challenging consumer environment. Rising living costs are straining household budgets, prompting more cautious spending and putting pressure on industry-wide sales. At the same time, many consumer goods companies are contending with higher raw material costs and elevated selling, general and administrative (SG&A) expenses.Despite these headwinds, demand for essential consumer products remains favorable. Industry leaders, such a ...

Company Overview - Church & Dwight Co., Inc. (NYSE: CHD) is a leading consumer packaged goods company with strong market positions in several categories [1] - The company grows both organically and through industry consolidation [1] - Church & Dwight has an outstanding dividend safety and a sound financial position [1] Investment Strategy - The focus is on dividend growth investing with a long-term perspective, emphasizing the compounding benefits of dividend growth [1] - The company seeks undervalued large-cap stocks with sustainable dividend growth and potential for capital appreciation [1] - There is also an interest in tech and small- or mid-cap stocks for their growth potential, regardless of dividend status [1] Performance Metrics - The company is recognized for its strong performance, ranking in the top 2.0% out of over 28,000 financial bloggers as of December 2023 [1]

Financial Data and Key Metrics Changes - The company reported a total revenue of approximately $6.1 billion, with 77% of sales coming from the U.S. and 18% from international markets [3][4] - The company aims for a steady stream of 4% organic volume growth, with specific targets of 3% for U.S. domestic, 8% for international, and 5% for the SPD business [52][54] - The company has achieved an average of over 4% growth over the past decade, with a focus on margin expansion of 25 to 50 basis points annually [54][56] Business Line Data and Key Metrics Changes - The Fabric Care business saw a growth rate of 1.4% in Q2, with ARM and HAMMER outpacing the category [12] - The Cat Litter category started at 2% growth and accelerated to 4%, with a year-to-date share growth [15] - The Hero Agne category maintained double-digit growth, increasing its market share from 1% in 2020 to 22% [20] - TheraBreath achieved a market share increase from 4% to 21% over five years, becoming the number two mouthwash brand [25] Market Data and Key Metrics Changes - International sales account for 18% of total sales, with a growth rate of 5.8% in the first half of the year [43] - The company has expanded its global footprint, with TheraBreath being the number one mouthwash in key retailers across several countries [36] - The e-commerce segment has grown significantly, now accounting for 23% of total sales, with five of the eight power brands increasing their online share [34][35] Company Strategy and Development Direction - The company is focused on innovation as a key growth driver, with half of its 4% growth in 2024 attributed to new product launches [37] - The acquisition of TouchLand is seen as a strategic move to enhance the company's portfolio, targeting the hand sanitizer market [30][32] - The company is committed to maintaining a balanced portfolio, with a focus on both premium and value segments [4][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future despite a volatile environment, emphasizing a balanced portfolio and share gains across brands [2][4] - The outlook for 2025 includes expectations of 0% to 2% organic sales growth and adjusted EPS growth of 0% to 2% [58] - Management highlighted the importance of managing tariffs and reducing exposure from $190 million to $50 million [61] Other Important Information - The company has a strong cash position with over $5 billion available for investments, including M&A opportunities [63] - The company is actively reviewing its brands and may divest underperforming segments to enhance shareholder value [60] Q&A Session Summary Question: Clarification on second quarter consumption expectations - Management confirmed that global organic growth was around 2.5%, with categories performing slightly better than expected [67][68] Question: Inquiry about M&A strategy and investment hurdles - Management stated that they are selective in M&A, focusing on long-term brand viability and typically aiming for around a 10x EBITDA multiple for acquisitions [71][73]

Financial Data and Key Metrics Changes - Church & Dwight reported a company size of approximately $6.1 billion, with 77% of sales in the U.S. and 18% internationally [3][4] - The company aims for 4% organic volume growth, with specific targets of 3% for U.S. domestic, 8% for international, and 5% for the SPD business [57][58] - The EPS growth outlook for 2025 is projected at 0% to 2%, with expectations of 2.5% organic growth in the second half of the year [63][64] Business Line Data and Key Metrics Changes - The Fabric Care business saw a growth rate of 1.4% in Q2, with ARM and HAMMER outpacing the category [13] - Cat litter performance improved from 2% to 4% growth, with a year-to-date share growth [16] - The Hero Agne category maintained double-digit growth, increasing its market share from 1% in 2020 to 22% [21] - TheraBreath achieved significant growth, becoming the number two mouthwash brand with a share increase from 4% to 21% over five years [25] Market Data and Key Metrics Changes - International sales account for 18% of total sales, with a growth rate of 5.8% in the first half of the year [47] - The e-commerce segment has grown significantly, now representing 23% of total sales, up from 22% in 2016 [33] - The company has expanded its global footprint, with TheraBreath being the number one mouthwash in key retailers across multiple countries [35] Company Strategy and Development Direction - The company focuses on a balanced portfolio, with eight power brands contributing to 75% of sales and profits [4] - The Evergreen Model guides the company's strategy, emphasizing consistent growth, margin expansion, and marketing investments [56][60] - Recent acquisitions, including TouchLand, are aimed at enhancing the product portfolio and driving growth [30][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future despite a volatile environment, highlighting share gains across many brands [2][3] - The company remains focused on what it can control, including managing tariffs and investing in innovation [62][67] - The management reiterated confidence in achieving sales growth and maintaining a strong balance sheet with over $5 billion available for investments [69][70] Other Important Information - The company has divested from underperforming brands and is focusing on revitalizing its vitamin business [65][66] - Gross margin pressures from tariffs have been reduced from $190 million to $50 million through action plans [67] Q&A Session Summary Question: Clarification on second quarter consumption expectations - Management clarified that the 2.5% growth is based on global organic growth, with categories performing at expected levels [72][73] Question: Inquiry about M&A interests and return on investment hurdles - Management explained their unique approach to M&A, emphasizing a focus on long-term brand viability and a typical EBITDA multiple target of around 10x [77][79]

Business Segments & Portfolio - Church & Dwight's domestic segment accounts for 77% of its business, while international contributes 18%, and the Specialty Products Division (SPD) makes up 5%[11] - In 2024, Church & Dwight's total company net sales were approximately $6.1 billion[12] - Approximately 75% of Church & Dwight's sales and profits are represented by 8 power brands[15] - In 2024, Church & Dwight's portfolio was divided into Household (49%), Personal Care (46%), and SPD (5%)[16] - Church & Dwight's product portfolio consists of 36% value products and 64% premium products[18] Brand Performance & Market Share - In the liquid laundry detergent category, Arm & Hammer experienced a 3.4% increase in dollar sales in Q1 2025 and a 3.1% increase in Q2 2025, compared to category growth of 0.2% and 1.4% respectively[45] - Arm & Hammer's liquid laundry dollar share has grown from 5% in 2006 to 14.8% YTD 2025[48] - In the clumping litter category, Arm & Hammer litter saw a 2.1% increase in dollar sales in Q1 2025 and a 4.1% increase in Q2 2025, compared to category growth of 2.3% and 3.4% respectively[57] - Arm & Hammer litter's dollar share has consistently increased from 23.2% in 2020 to 24.7% YTD 2025[59] - Hero acne brand experienced a 13% increase in dollar sales in Q1 2025 and an 11.4% increase in Q2 2025, compared to category declines of -1.2% and growth of 1.7% respectively[65] - Hero's total acne dollar share has grown from 1.2% in 2020 to 21.8% YTD 2025, making it the 1 acne brand[68] - TheraBreath mouthwash experienced a 26.2% increase in dollar sales in Q1 2025 and a 22.5% increase in Q2 2025, compared to category declines of -0.5% and -1.6% respectively[81] - TheraBreath's total mouthwash dollar share has grown from 3.9% in 2020 to 20.7% YTD 2025, achieving an all-time share high and becoming the 2 mouthwash brand[84] - Batiste dry shampoo experienced a -4.9% decrease in dollar sales in Q1 2025 and a -6.9% decrease in Q2 2025, compared to category growth of 2.7% and 6.8% respectively[97] - Batiste's dry shampoo dollar share has grown from 36.7% in 2020 to 41.9% YTD 2025, maintaining its position as the 1 dry shampoo brand[98] Financial Performance & Outlook - The company's evergreen model targets include +4% organic sales growth, +25 to +50 bps gross margin improvement, flat % but higher $ marketing spend, -25 to 0 bps SG&A reduction, +50 bps operating margin improvement, and +8% EPS growth[181] - The company's financial outlook for FY 2025 (as of August 1, 2025) includes 0% to +2% organic sales growth, -60 bps adjusted gross margin, ~11% marketing %, lower adjusted SG&A, ~23% effective tax rate, 0% to +2% adjusted EPS growth, and ~$1.05 billion cash from operations[200] - The company anticipates a ~$190 million impact from tariffs, with ~$50 million in mitigating actions[204] - The company's acquisition power is approximately $5.3 billion[214]

Core Insights - Insider buying activity is closely monitored by investors as it may indicate long-term company prospects [1][5] - Recent insider purchases have been made by CEOs of Church & Dwight (CHD), Eli Lilly (LLY), and Viatris (VTRS) [1][7] Church & Dwight (CHD) - The CEO of Church & Dwight purchased approximately 5,500 shares for a total cost of just over $500,000 in mid-August [2] - Despite a 10% decline in share price in 2025, insider buying activity has been noted as a positive sign [2] Eli Lilly (LLY) - Eli Lilly's shares have decreased by 5% in 2025, underperforming the S&P 500 [4] - Following a period of selling, insiders have begun to buy shares after the company's earnings report [4][5] Viatris (VTRS) - Viatris CEO Scott Smith acquired 22,000 shares at a total cost of approximately $220,000 [6] - The company's shares have lagged the S&P 500 by about 12% in 2025, yet insider buying has been observed at discounted prices [6]

Group 1 - The article compares Grocery Outlet Holding Corp. (GO) and Church & Dwight (CHD) as potential undervalued stocks in the Consumer Products - Staples sector [1] - GO has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision activity compared to CHD, which has a Zacks Rank of 3 (Hold) [3] - Value investors consider various fundamental metrics, including P/E ratio, P/S ratio, earnings yield, and cash flow per share, to identify undervalued stocks [4] Group 2 - GO has a forward P/E ratio of 24.12, while CHD has a forward P/E of 26.19, suggesting that GO may be more attractively priced [5] - The PEG ratio for GO is 3.33, compared to CHD's PEG ratio of 3.75, indicating that GO may offer better value relative to its expected earnings growth [5] - GO's P/B ratio is 1.53, significantly lower than CHD's P/B of 5.04, contributing to GO's Value grade of B versus CHD's Value grade of D [6]

Core Insights - Church & Dwight Company, Inc. reported better-than-expected second-quarter results with adjusted earnings per share of 94 cents, surpassing the analyst consensus estimate of 85 cents [1] - Quarterly sales reached $1.51 billion, exceeding the expected $1.48 billion [1] - The company reaffirmed its FY25 adjusted earnings per share guidance at $3.44–$3.51, aligning with consensus estimates of approximately $3.48 [1] Financial Expectations - For the third quarter, Church & Dwight anticipates reported and organic sales growth of approximately 1%-2% [2] - The company expects adjusted gross margin contraction of approximately 100 basis points due to inflation, tariff costs, lower margins from exited businesses, and increased marketing investments [2] - Adjusted EPS for the third quarter is projected to be 72 cents per share, reflecting a 9% decrease compared to last year's adjusted third-quarter EPS [2] Market Reaction - Following the earnings announcement, Church & Dwight shares fell 2.5% to trade at $91.70 [3] - Analysts adjusted their price targets for Church & Dwight after the earnings report [3] Analyst Ratings - Barclays analyst Lauren Lieberman maintained an Underweight rating and lowered the price target from $84 to $83 [5] - Evercore ISI Group analyst Javier Escalante maintained an In-Line rating and reduced the price target from $102 to $101 [5] - JP Morgan analyst Andrea Teixeira also maintained an Underweight rating, lowering the price target from $97 to $92 [5]