Church & Dwight (CHD) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 1. O ...

Industry Overview - The Zacks Consumer Products – Staples industry is facing challenges due to elevated living costs affecting household budgets, leading to cautious consumer spending and pressure on sales [1] - Companies in this industry are also dealing with increased raw material costs and higher selling, general, and administrative (SG&A) expenses [1] Demand and Strategies - Despite the challenges, demand for essential consumer products remains strong, with industry leaders like Procter & Gamble, Colgate-Palmolive, Church & Dwight, and Grocery Outlet employing strategies focused on innovation, cost efficiency, and digital transformation to sustain growth [2] Trends Impacting the Industry - The industry is experiencing rising costs in raw materials, labor, and transportation, which are negatively impacting profit margins [4] - Increased SG&A expenses and investments in digital transformation and marketing are further straining profitability [4] - Consumer spending volatility is evident, particularly among lower-income households, due to rising living expenses and declining personal savings, which dampens purchasing power [5] Revenue Optimization - Companies are refining operations to optimize revenue generation, focusing on enhancing e-commerce and digital initiatives, and innovating to meet evolving consumer demands [6] - Strategic acquisitions and divestitures are being pursued to concentrate on high-growth areas [6] Industry Performance and Valuation - The Zacks Consumer Products – Staples industry ranks 144, placing it in the bottom 41% of over 246 Zacks industries, indicating dull near-term prospects [7][8] - The industry has underperformed compared to the S&P 500 Index and the broader Consumer Staples sector over the past six months, gaining only 1.5% compared to the S&P 500's 5.3% and the sector's 10.5% [11] - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 20.13X, lower than the S&P 500's 22.63X and the sector's 17.32X [14] Company Highlights - **Colgate-Palmolive**: Focused on effective pricing strategies and productivity initiatives, with a Zacks Rank 2. The consensus estimate for its current fiscal-year EPS has increased by 1.7% to $3.66 [17][18] - **Grocery Outlet**: Employing a balanced growth strategy with a focus on e-commerce and private-label offerings, holding a Zacks Rank 2. The EPS estimate remains at 74 cents, indicating a decline of 3.9% from the previous year [21][22] - **Procter & Gamble**: With a Zacks Rank 3, the company emphasizes sustainability and adaptability, maintaining an EPS estimate of $6.78, suggesting a growth of 2.9% from the year-ago period [25][26] - **Church & Dwight**: Also holding a Zacks Rank 3, the company is focused on innovation and digital expansion, with an EPS estimate of $3.48, reflecting a growth of 1.2% from the previous year [29][30]

Group 1: Investment Strategy - Investing in growth stocks is a proven method to enhance investment portfolios over the long term, with a suggested initial investment of $5,000 in strong, growing companies [1][2] Group 2: Steris - Steris focuses on manufacturing and selling products for patient care, particularly in infection prevention, with 71% of its revenue coming from the healthcare segment [4] - The company has experienced consistent growth in revenue and net income, with free cash flow increasing alongside net income, allowing for rising dividends, which increased from $0.52 to $0.57 per share, a 9.6% year-over-year increase [5] - Projected revenue for 2023, 2024, and 2025 is $4.54 billion, $5.14 billion, and $5.46 billion respectively, with operating income and net income also showing significant growth [6] - Steris aims for annual revenue growth in the mid-to-high single digits, driven by rising demand for medical procedures and potential mergers and acquisitions [8][9] Group 3: Mastercard - Mastercard operates a payment network facilitating secure transactions, with a strong brand presence and 3.5 billion debit and credit cards globally [10] - Revenue for 2022, 2023, and 2024 is projected at $22.2 billion, $25.1 billion, and $28.2 billion respectively, with net income increasing from $9.9 billion in 2022 to $12.8 billion in 2024 [11] - Free cash flow surged by 56.3% year over year to $2 billion, demonstrating the company's ability to generate excess cash for dividends, which increased by 15% year over year [12] - Mastercard continues to innovate, launching new payment technologies and forming partnerships to enhance its competitive edge [13][14] Group 4: Church & Dwight - Church & Dwight is a consumer products company managing key brands, with revenue growth driven by organic growth and acquisitions [15] - Revenue for 2022, 2023, and 2024 is projected at $5.38 billion, $5.87 billion, and $6.12 billion respectively, despite a slight dip in revenue and net income in the first quarter of 2025 [16] - The company has a history of consistent dividend payments, with a recent increase from $0.28375 to $0.295 per share [17] - Management believes there is significant growth potential, particularly from power brands and international expansion, with recent acquisitions supporting this growth strategy [18][19][20]

Core Insights - The consumer-packaged goods industry features prominent players like Procter & Gamble (PG) and Church & Dwight (CHD), each with unique strategies and brand portfolios [1][2][3] Procter & Gamble (PG) - PG is a leading global company with a diverse product range, maintaining strong market share and customer loyalty despite economic challenges [4][5] - The company employs an integrated growth strategy focusing on product superiority, operational efficiency, and innovation, supported by effective digital marketing [5][7] - PG's supply chain is designed for efficiency and resilience, allowing quick responses to market demands and geopolitical disruptions [6][7] - Financially, PG shows strong free cash flow and consistent capital returns to shareholders, with projected sales growth of 2.6% and earnings growth of 3.6% in fiscal 2026 [13][23] - PG's stock trades at a forward P/E ratio of 22.85, which is lower than CHD's 26.55, indicating a more attractive valuation [18][21] Church & Dwight (CHD) - CHD has demonstrated resilience, gaining volume share in 80% of its business despite macroeconomic pressures, with nine of its 14 major brands outperforming category growth [9][10] - The company focuses on disciplined portfolio management and innovation, recently divesting non-core businesses to concentrate on growth drivers [10][12] - CHD's marketing strategy is aggressive, with a significant portion of net sales allocated to marketing, and it is enhancing its digital presence as online sales grow [11][12] - Financially, CHD's EPS is projected to grow by 1.2% in 2025, while sales are expected to decline by 0.4% [16] - CHD's stock has underperformed compared to PG, with an 8.1% decline over the past year [17][22] Comparative Analysis - PG is positioned as a stronger investment due to its scale, diversified portfolio, and operational excellence, while CHD, despite its agility and niche performance, operates on a smaller scale and faces valuation challenges [22][23]

CHURCH & DWIGHT CO., INC. CHURCH & DWIGHT CO., INC. dbAccess Global Consumer Conference 2025 SAFE HARBOR STATEMENT 2 CHURCH & DWIGHT CO., INC. We Remain Confident in our Future Despite a Volatile Environment This presentation contains forward-looking statements, including, among others, statements relating to net sales and earnings growth, the impact of the Touchland acquisition; the intended benefits of the exploration of strategic alternatives; gross margin changes; trade and marketing spending; marketing ...

Summary of Conference Call Company Overview - The company is known for its ARM and HAMMER brand, which has been a core part of its identity since its founding in 1846. The brand spans multiple categories including personal care, household products, cat litter, water detergent, and toothpaste [1][2][3]. Financial Performance - The ARM and HAMMER brand has grown from $1 billion to $2 billion, achieving a mid-single-digit CAGR over many years [2]. - The company has a total portfolio worth $6 billion, with $2 billion from ARM and HAMMER and $4 billion from other brands [3]. - Categories have shown resilience, with growth rates of 4.5% in early 2024 and 2.5% in the latter half of the year [4][5]. Market Dynamics - Consumer confidence has improved, leading to positive growth in April and May 2024 after a negative start to the year [6]. - The company has gained market share in various categories, with two-thirds of its portfolio gaining share over the past decade [7]. - The laundry detergent category has seen a share increase to 14.7%, up from 5% over the years [8]. Innovations and Acquisitions - The company has introduced a "good, better, best" strategy for its laundry products, enhancing its competitive edge [9]. - Recent acquisitions include Touchland, a hand sanitizer brand, purchased for $700 million plus an earn-out of $180 million, expected to close soon [17][18]. - Touchland is positioned to become the company's eighth power brand, with a focus on enhancing consumer experience through premium products [19]. International Expansion - International sales account for 18% of total revenue, with a goal of 8% organic growth year-on-year [27][28]. - The company has expanded its global footprint, recently entering Japan and aiming to grow its presence in over 50 countries [31][32]. - The international division has a strong track record of high single-digit growth, indicating significant potential for future expansion [30]. Specialty Products Division - The Specialty Products division aims for 5% organic growth, focusing on animal nutrition, performance products, and commercial applications [35]. - Nearly 30% of the animal nutrition sales now come from non-U.S. markets, highlighting the division's international focus [36]. Financial Strategy - The company targets 4% organic growth overall, with specific targets of 3% in the U.S., 8% internationally, and 5% for the Specialty Products division [39]. - Gross margin expansion is a key focus, with efforts to improve margins by 25 to 50 basis points annually [41]. - The company has a strong cash flow position, with $1 billion in cash from operations and significant acquisition capacity of over $5.5 billion [50]. Challenges and Outlook - The company has faced challenges from inflation and tariffs, leading to a projected adjusted EPS growth of 0% to 2% for 2025 [46][48]. - Despite these challenges, the company remains optimistic about its growth trajectory, particularly in innovation and international markets [53]. Key Takeaways - The ARM and HAMMER brand continues to perform well across various categories, with a strong focus on innovation and market share growth. - Recent acquisitions and international expansion are expected to drive future growth. - The company maintains a disciplined approach to M&A, focusing on asset-light acquisitions that enhance its portfolio [99][101].

Core Viewpoint - Church & Dwight (C&D) is making a significant acquisition by purchasing Touchland, the second-largest hand sanitizer brand in the U.S., for $880 million (approximately 620 million RMB) to enhance its portfolio and target younger consumers [1][2][4]. Financial Details - The acquisition plan includes an upfront payment of $700 million (approximately 505 million RMB) and a performance-based earn-out of $180 million (approximately 129 million RMB) tied to Touchland's net sales performance in 2025 [2][3]. - Touchland's net sales for the past 12 months were approximately $130 million (approximately 93 million RMB), with an EBITDA of about $55 million (approximately 39 million RMB) [2][3]. - C&D reported a 4.1% increase in net sales to $6.107 billion (approximately 43.36 billion RMB) for 2024, exceeding its growth expectations [2][3]. Strategic Rationale - C&D aims to leverage its capabilities to accelerate Touchland's international market expansion and enhance product innovation [3][4]. - The acquisition aligns with C&D's long-term strategy of acquiring leading brands in high-growth categories with a light asset structure [11][12]. - Touchland's appeal to Gen Z and Alpha consumers complements C&D's existing portfolio and addresses gaps in its younger consumer engagement [3][4][13]. Historical Context - C&D has a history of successful acquisitions, with all six of its core brands acquired, contributing approximately 70% of its revenue and profit [5][6][7]. - Previous acquisitions include Hero Cosmetics for $630 million (approximately 454 million RMB), which has significantly increased its market share in the acne treatment segment [7][12]. Market Position - The U.S. hand sanitizer market is experiencing growth, with Touchland being one of the fastest-growing brands, indicating a strong potential for future revenue increases [2][3][12]. - C&D's strategic focus on acquiring top brands in niche markets has proven effective, as seen with the success of Hero Cosmetics, which grew its market share from 3.5% in 2022 to 21.7% in 2024 [12][13].

Acquisition Details - Church & Dwight Co., Inc. has entered into a definitive agreement to acquire Touchland for $700 million, with an additional earn-out of up to $180 million based on 2025 net sales performance, bringing the total potential purchase price to $880 million [2][3] - The transaction is expected to close in the second quarter of 2025 [2] Strategic Fit - The acquisition strengthens Church & Dwight's position in the personal care market and adds a youth-focused brand to its portfolio, making Touchland the company's eighth power brand [3] - Touchland is the number two hand sanitizer brand in the U.S., known for its strong consumer loyalty and appeal to younger audiences [3] Financial Performance - Touchland reported $130 million in net sales and $55 million in EBITDA for the trailing 12 months ending March 31, 2025, with projected double-digit growth in net sales for 2025 and 2026 [5] - The acquisition is expected to boost cash earnings by approximately 3% by 2026 [5] Operational Strategy - Touchland's founders will continue to lead the brand from Miami, while Church & Dwight will leverage its global distribution network to drive growth [4] - Touchland has begun international expansion, with products available in the U.S., Canada, and recently launched in the Middle East [4] Portfolio Management - Church & Dwight plans to divest or shut down underperforming units, including Flawless, Spinbrush, and Waterpik showerhead businesses, which represent about $150 million in net sales [11] - This move aims to streamline the portfolio and focus on core brands, reducing tariff exposure [11] Market Position - Church & Dwight has demonstrated strong brand performance, gaining market share in nine of its 14 major brands and achieving volume share growth in over 80% of its business in Q1 2025 [9] - The company benefits from a robust portfolio of trusted consumer brands, ensuring stable demand even during economic uncertainty [10]

Summary of Church and Dwight's Conference Call Company and Industry - **Company**: Church and Dwight - **Industry**: Hand Sanitizer and Personal Care Products Key Points and Arguments Acquisition of TouchLynn Brand - Church and Dwight announced the acquisition of the TouchLynn brand for approximately **$700 million**, with potential total costs up to **$880 million** based on performance metrics by 2025 [3][8] - TouchLynn is noted as the **fastest growing brand** in the U.S. hand sanitizer category, currently holding the **number two position** in the market [4][5] - The U.S. hand sanitizer market is valued at approximately **$640 million** with low single-digit growth, but Church and Dwight sees potential for growth driven by new consumers entering the category [5][6] Market Position and Consumer Base - TouchLynn has a household penetration rate of **6%**, significantly lower than the category average of **37%**, indicating substantial growth potential [6][33] - The brand has established a loyal consumer base, particularly among younger demographics, and exhibits high levels of brand loyalty and repeat purchases [6][22] - The innovation strategy for TouchLynn focuses on four pillars: on-the-go use, distinct form factor, differentiated formulas, and a sensorial experience [7][22] Financial Projections and Impact - TouchLynn's trailing twelve-month net sales were approximately **$130 million** with an EBITDA of **$55 million** [8] - The acquisition is expected to be neutral to Church and Dwight's **2025 EPS**, with projections for **double-digit growth** in net sales for 2025 and 2026 [9][10] - By **2026**, the acquisition is anticipated to be **3% accretive** to cash earnings [9][91] Growth Opportunities - Church and Dwight plans to leverage its capabilities to accelerate TouchLynn's growth in international markets, including Canada and the Middle East [7][12] - The company sees potential for TouchLynn to expand into other categories, such as body mist, while maintaining a focus on maximizing the hand sanitizer market [24][65] Competitive Landscape and Risks - The company acknowledges the presence of low-end knockoff brands but believes that TouchLynn's quality and brand cachet will protect it from significant competition [46][76] - Church and Dwight is cautious about moving into mass channels too quickly, preferring to focus on existing distribution channels like Sephora and Ulta [50][53] Marketing and Brand Building - Currently, direct-to-consumer (DTC) sales account for about **6%** of the business, while online sales represent **30%** [56] - The brand has successfully utilized limited edition collaborations, such as with Hello Kitty and Disney, which have sold out quickly [58] - Future marketing efforts will focus on increasing household penetration and brand awareness, with a commitment to maintaining high margins while investing in growth [84][90] Conclusion - Church and Dwight's acquisition of TouchLynn represents a strategic move to enhance its portfolio in the personal care sector, with a focus on innovation, brand loyalty, and international expansion. The company is optimistic about the growth potential and financial impact of this acquisition while remaining vigilant about competitive risks in the market [3][10][93]

Group 1 - The core thesis regarding Church & Dwight Co. (CHD) is that slowing domestic growth may lead to a de-rating in multiples [1] - The investment approach emphasizes identifying undervalued companies with long-term growth potential, focusing on value investing principles [1] Group 2 - No stock or derivative positions are held in any mentioned companies, and there are no plans to initiate such positions in the near future [2] - The article expresses personal opinions and is not influenced by compensation from any company [2]