It’s easy to overlook consumer staples stocks when growth stocks are doing so well. After a monstrous 2023 rally for major indices like the Nasdaq 100 and the S&P 500, it’s easy to feel invincible as a growth investor. While growth stocks can continue to rally higher, investors should never feel invincible about their decisions. That type of hubris can give way to considerable losses and a sense of panic that results in making the wrong decisions.Consumer staples stocks usually don’t decline as much as the ...

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Church & Dwight (CHD) , which belongs to the Zacks Soap and Cleaning Materials industry, could be a great candidate to consider.This maker of household and personal products has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 12.64%.For the last re ...

Players in the Zacks Soap and Cleaning Materials industry have been benefiting from pricing actions, which have played key roles in uplifting the sales trends for the industry participants. The companies continue to gain from solid demand for consumer products and brands, cost-saving efforts, and strong execution. The players focused on transforming operations, digital commerce growth, innovation and brand building have been gaining amid macro hardships.Nevertheless, the companies continue to witness headwi ...

Financial Data and Key Metrics Changes - In Q3 2023, adjusted EPS was $0.74, exceeding the $0.66 outlook, driven by higher than expected sales growth and gross margin expansion [98][99] - Net sales increased by 10.5%, while organic sales grew by 4.8%, surpassing the previous outlook of 4% [98][112] - Gross margin improved by 270 basis points to 44.4%, primarily due to better pricing, volume, productivity, and the HERO acquisition [98][112] Business Line Data and Key Metrics Changes - The ARM & HAMMER Litter segment experienced 11% growth, outperforming the category growth of 8% [4] - Gummy vitamins, specifically VITAFUSION, saw a decline of 11% in Q3 due to distribution losses from supply issues in 2022 [5] - The specialty products segment, particularly MEGALAC, faced challenges from low-priced imports, leading to a 10% decrease in organic sales [97] Market Data and Key Metrics Changes - The U.S. consumer business posted strong organic sales growth of 5.5%, with 3.6% driven by volume [112] - International sales grew organically by 7.3%, supported by broad-based growth across subsidiaries [115] - Online sales accounted for 17% of global sales in Q3, up from 16% in the previous year [93] Company Strategy and Development Direction - The company is focused on reinvesting in marketing and R&D to drive future growth, with a strong new product pipeline expected in 2024 [98][119] - The strategy includes maintaining a balance between value and premium offerings, with a focus on consumer trade-down behavior during economic challenges [3][32] - The company is actively exploring acquisition opportunities to enhance its brand portfolio, with a strong balance sheet to support these initiatives [38][99] Management's Comments on Operating Environment and Future Outlook - Management noted that while consumer balance sheets are stretched, the company is well-positioned for trade-down scenarios, with 40% of its portfolio being value products [3] - The outlook for Q4 includes expected reported sales growth of 5% and organic growth of approximately 4%, with volume contributing positively [9][98] - Management expressed confidence in the demand for products, citing strong October performance and a positive trajectory for Q4 [27][93] Other Important Information - The company expects full-year reported sales growth of approximately 9%, up from a previous outlook of 8% [99] - Marketing as a percentage of sales increased to 11.5%, reflecting a commitment to brand support and growth [94][117] - The effective tax rate for Q3 was 24.1%, an increase from 20.2% in the prior year, influenced by a non-recurring state tax reduction in 2022 [117] Q&A Session Summary Question: What is the outlook for the specialty product segment? - Management indicated that the specialty product segment is expected to face challenges for a few more quarters until issues are resolved [102] Question: How will the promotional strategy impact Q4? - Management confirmed that the decision to pull back on certain promotions is part of a revenue growth management initiative aimed at improving profitability [147] Question: What is the company's approach to inflation and pricing? - Management expects inflation to be slightly higher than historical norms, driven by oil-based and resin-based commodities, but remains optimistic about maintaining pricing power [81][146]

Net sales decreased in the three and nine months ended September 30, 2023 primarily due to competitive imports within our domestic dairy business. On February 1, 2023, the Board declared a 4% increase in the regular quarterly dividend from $0.2625 to $0.2725 per share, equivalent to an annual dividend of $1.09 per share. The increase raises the annual dividend payout from $255.0 to approximately $265.0. b) Change in Internal Control over Financial Reporting The Company repurchases shares of its Common Stock ...

Church & Dwight Co., Inc. (NYSE:CHD) Q2 2023 Earnings Conference Call July 28, 2023 10:00 AM ET Company Participants Matt Farrell – President and Chief Executive Officer Rick Dierker – Chief Financial Officer Conference Call Participants Chris Carey – Wells Fargo Securities Rupesh Parikh – Oppenheimer Bryan Adams – UBS Lauren Lieberman – Barclays Dara Mohsenian – Morgan Stanley Andrea Teixeira – JPMorgan Steve Powers – Deutsche Bank Anna Lizzul – Bank of America Bill Chappell – Truist Securities Olivia Tong ...

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section provides the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [ITEM 1: FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201%3A%20FINANCIAL%20STATEMENTS) This section presents the company's unaudited condensed consolidated financial statements, including income, comprehensive income, balance sheets, cash flows, stockholders' equity, and detailed explanatory notes [Condensed Consolidated Statements of Income](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) This table summarizes the company's net sales, gross profit, operating income, net income, and earnings per share for the reported periods | Metric | Three Months Ended June 30, 2023 ($M) | Three Months Ended June 30, 2022 ($M) | Six Months Ended June 30, 2023 ($M) | Six Months Ended June 30, 2022 ($M) | | :----------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Net Sales | 1,454.2 | 1,325.1 | 2,884.0 | 2,622.3 | | Gross Profit | 638.9 | 545.3 | 1,260.9 | 1,097.8 | | Income from Operations | 293.6 | 261.6 | 585.5 | 542.3 | | Net Income | 221.2 | 187.1 | 424.4 | 391.5 | | Diluted Net Income per share | 0.89 | 0.76 | 1.72 | 1.59 | | Cash dividends per share | 0.27 | 0.26 | 0.54 | 0.53 | [Condensed Consolidated Statements of Comprehensive Income](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) This table presents the company's net income and other comprehensive income components, leading to total comprehensive income for the periods | Metric | Three Months Ended June 30, 2023 ($M) | Three Months Ended June 30, 2022 ($M) | Six Months Ended June 30, 2023 ($M) | Six Months Ended June 30, 2022 ($M) | | :-------------------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Net Income | 221.2 | 187.1 | 424.4 | 391.5 | | Foreign exchange translation adjustments | 3.3 | (12.3) | 5.7 | (14.5) | | Income (loss) from derivative agreements | (4.9) | 18.4 | (5.7) | 33.7 | | Other comprehensive (loss) income | (1.6) | 6.1 | 1.5 | 21.1 | | Comprehensive income | 219.6 | 193.2 | 425.9 | 412.6 | [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This table provides a snapshot of the company's assets, liabilities, and stockholders' equity at specific reporting dates | Metric | June 30, 2023 ($M) | December 31, 2022 ($M) | | :--------------------------- | :----------------- | :--------------------- | | Cash and cash equivalents | 396.9 | 270.3 | | Total Current Assets | 1,576.4 | 1,395.9 | | Property, Plant and Equipment, Net | 802.4 | 761.1 | | Trade Names and Other Intangibles, Net | 3,369.8 | 3,431.6 | | Goodwill | 2,430.3 | 2,426.8 | | Total Assets | 8,511.0 | 8,345.6 | | Total Current Liabilities | 1,121.8 | 1,183.8 | | Long-term Debt | 2,400.9 | 2,599.5 | | Total Liabilities | 4,600.0 | 4,855.7 | | Total Stockholders' Equity | 3,911.0 | 3,489.9 | [Condensed Consolidated Statements of Cash Flow](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOW) This table details the company's cash flows from operating, investing, and financing activities for the reported periods | Metric | Six Months Ended June 30, 2023 ($M) | Six Months Ended June 30, 2022 ($M) | | :-------------------------------------- | :---------------------------------- | :---------------------------------- | | Net Cash Provided By Operating Activities | 509.2 | 310.4 | | Net Cash Used In Investing Activities | (69.2) | (39.8) | | Net Cash Provided By (Used In) Financing Activities | (315.4) | 132.2 | | Net Change In Cash and Cash Equivalents | 126.6 | 399.1 | | Cash and Cash Equivalents at End of Period | 396.9 | 639.7 | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) This section outlines changes in the company's equity components, including common stock, retained earnings, and comprehensive income | Metric | December 31, 2022 ($M) | June 30, 2023 ($M) | | :--------------------------- | :--------------------- | :----------------- | | Common Stock | 293.7 | 293.7 | | Additional Paid-In Capital | 366.2 | 422.6 | | Retained Earnings | 5,524.6 | 5,815.3 | | Accumulated Other Comprehensive Income (Loss) | (29.3) | (27.8) | | Common stock in treasury, at cost | (2,665.3) | (2,592.8) | | Total Stockholders' Equity | 3,489.9 | 3,911.0 | - Cash dividends paid for the six months ended June 30, 2023, were **$133.0 million**, compared to **$127.4 million** for the same period in 2022[37](index=37&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Basis of Presentation](index=8&type=section&id=1.%20Basis%20of%20Presentation) This note clarifies the preparation and accounting principles used for the unaudited interim financial statements - The condensed consolidated financial statements are unaudited and include only normal recurring adjustments, prepared in accordance with GAAP[40](index=40&type=chunk) - Interim results may not be representative of full-year results and should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2022[40](index=40&type=chunk)[163](index=163&type=chunk) [2. New Accounting Pronouncements](index=8&type=section&id=2.%20New%20Accounting%20Pronouncements) This note details recently adopted and future accounting pronouncements and their expected impact on the company's financials - The Company adopted new FASB guidance on supplier finance programs, effective for fiscal years beginning after December 15, 2022, requiring disclosures on program terms, balance sheet presentation, and confirmed outstanding amounts in interim periods[164](index=164&type=chunk) - No other accounting pronouncements issued but not yet adopted are expected to have a material impact on the Company's financial position, results of operations, or cash flows[13](index=13&type=chunk) [3. Inventories](index=8&type=section&id=3.%20Inventories) This table provides a breakdown of the company's inventory components, including raw materials, work in process, and finished goods | Inventory Component | June 30, 2023 ($M) | December 31, 2022 ($M) | | :----------------------- | :----------------- | :--------------------- | | Raw materials and supplies | 150.0 | 149.5 | | Work in process | 41.8 | 46.8 | | Finished goods | 483.6 | 450.3 | | **Total** | **675.4** | **646.6** | [4. Property, Plant and Equipment, Net ("PP&E")](index=9&type=section&id=4.%20Property%2C%20Plant%20and%20Equipment%2C%20Net%20(%22PP%26E%22)) This note details the composition of the company's property, plant, and equipment, including depreciation expense | PP&E Component | June 30, 2023 ($M) | December 31, 2022 ($M) | | :----------------------------- | :----------------- | :--------------------- | | Land | 28.3 | 28.1 | | Buildings and improvements | 305.8 | 299.1 | | Machinery and equipment | 879.9 | 856.5 | | Software | 117.5 | 109.1 | | Office equipment and other assets | 103.3 | 96.9 | | Construction in progress | 240.7 | 211.5 | | Gross PP&E | 1,675.5 | 1,601.2 | | Less accumulated depreciation and amortization | 873.1 | 840.1 | | **Net PP&E** | **802.4** | **761.1** | | Metric | Three Months Ended June 30, 2023 ($M) | Three Months Ended June 30, 2022 ($M) | Six Months Ended June 30, 2023 ($M) | Six Months Ended June 30, 2022 ($M) | | :--------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Depreciation expense on PP&E | 17.7 | 16.8 | 34.6 | 33.4 | [5. Earnings Per Share ("EPS")](index=9&type=section&id=5.%20Earnings%20Per%20Share%20(%22EPS%22)) This note explains the calculation of basic and diluted earnings per share, including the impact of stock options - Basic EPS is calculated based on income available to common stockholders and the weighted average number of shares outstanding, while diluted EPS includes additional dilution from potential common stock issuable under stock-based compensation plans[43](index=43&type=chunk) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Weighted average common shares outstanding - basic | 245.0 | 242.6 | 244.4 | 242.6 | | Dilutive effect of stock options | 2.9 | 3.8 | 3.0 | 3.9 | | Weighted average common shares outstanding - diluted | 247.9 | 246.4 | 247.4 | 246.5 | | Antidilutive stock options outstanding | 2.5 | 3.0 | 3.9 | 2.9 | [6. Stock Based Compensation Plans](index=9&type=section&id=6.%20Stock%20Based%20Compensation%20Plans) This note describes the company's stock-based compensation plans, including RSU and PSU grants and related expenses - The Company updated its Long-Term Incentive Program (LTIP) in Q1 2023 to include initial grants of restricted stock units (RSUs) and performance share units (PSUs), with grants now occurring in the first quarter instead of the second[141](index=141&type=chunk) | Metric | Three Months Ended June 30, 2023 ($M) | Three Months Ended June 30, 2022 ($M) | Six Months Ended June 30, 2023 ($M) | Six Months Ended June 30, 2022 ($M) | | :-------------------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Intrinsic Value of Stock Options Exercised | 97.0 | 9.5 | 107.7 | 26.3 | | Stock Compensation Expense Related to Stock Option Awards | 4.4 | 14.7 | 18.9 | 17.5 | - **117,920 RSUs** with a total fair value of **$10.1 million** were granted in Q1 2023, vesting one-third annually over three years[45](index=45&type=chunk)[143](index=143&type=chunk) - Additionally, **854,882 shares** of restricted stock with a fair value of **$61.5 million** were issued in October 2022 related to the Hero Acquisition, also vesting over three years[45](index=45&type=chunk)[143](index=143&type=chunk) - **19,650 PSUs** with an aggregate fair value of **$2.2 million** were granted to Executive Leadership Team members in Q1 2023, with performance targets based on relative Total Shareholder Return (TSR) over a three-year period[144](index=144&type=chunk) [7. Share Repurchases](index=11&type=section&id=7.%20Share%20Repurchases) This note details the company's share repurchase activities and remaining authorization under its programs - As of June 30, 2023, **$729.7 million** of share repurchase availability remains under the 2021 Share Repurchase Program[118](index=118&type=chunk)[242](index=242&type=chunk)[251](index=251&type=chunk) - During the second quarter of 2023, no shares were repurchased under publicly announced programs; however, **1,210 shares** were purchased at an average price of **$90.93** to satisfy tax withholding obligations related to restricted stock vesting[233](index=233&type=chunk)[251](index=251&type=chunk) [8. Fair Value Measurements](index=11&type=section&id=8.%20Fair%20Value%20Measurements) This note provides fair value measurements for financial instruments, categorizing them by input levels | Financial Instrument | Input Level | June 30, 2023 Carrying Amount ($M) | June 30, 2023 Fair Value ($M) | December 31, 2022 Carrying Amount ($M) | December 31, 2022 Fair Value ($M) | | :------------------------ | :---------- | :--------------------------------- | :---------------------------- | :------------------------------------- | :-------------------------------- | | Cash equivalents | Level 1 | 256.0 | 256.0 | 153.9 | 153.9 | | Short-term borrowings | Level 2 | 4.0 | 4.0 | 74.0 | 74.0 | | Term loan due Dec 22, 2024 | Level 2 | 200.0 | 200.0 | 400.0 | 400.0 | | 3.15% Senior notes due Aug 1, 2027 | Level 2 | 424.8 | 399.5 | 424.8 | 397.3 | | 2.3% Senior notes due Dec 15, 2031 | Level 2 | 399.3 | 329.0 | 399.3 | 321.3 | | 5.6% Senior notes due Nov 15, 2032 | Level 2 | 499.1 | 526.5 | 499.1 | 518.9 | | 3.95% Senior notes due Aug 1, 2047 | Level 2 | 397.7 | 333.3 | 397.6 | 316.7 | | 5.00% Senior notes due Jun 15, 2052 | Level 2 | 499.8 | 488.2 | 499.7 | 464.7 | - The carrying amounts of Accounts Receivable, Accounts Payable, and Accrued and Other Liabilities approximated estimated fair values as of June 30, 2023, and December 31, 2022[145](index=145&type=chunk) - There were no transfers between input levels during the six months ended June 30, 2023[170](index=170&type=chunk) [9. Derivative Instruments and Risk Management](index=12&type=section&id=9.%20Derivative%20Instruments%20and%20Risk%20Management) This note describes the company's use of derivative instruments to manage market risks, including foreign exchange and commodity prices - The Company uses derivative instruments, such as cash flow and fair value hedges, diesel and commodity hedge contracts, equity derivatives, and foreign exchange forward contracts, to manage market risks related to interest rates, foreign exchange rates, stock prices, and commodity prices, not for trading or speculative purposes[113](index=113&type=chunk) - The fair values and gain/loss recognized from derivative instruments did not have a material impact on the Company's condensed consolidated financial statements during the three and six months ended June 30, 2023[20](index=20&type=chunk) | Derivative Type | Notional Amount June 30, 2023 | Notional Amount December 31, 2022 | | :-------------------------------------------- | :---------------------------- | :-------------------------------- | | Foreign exchange contracts (hedging) | $217.8M | $231.5M | | Diesel fuel contracts (hedging) | 4.0 gallons | 5.0 gallons | | Commodities contracts (hedging) | 12.2 pounds | 26.8 pounds | | Foreign exchange contracts (non-hedging) | $1.6M | $1.6M | | Equity derivatives (non-hedging) | $20.6M | $22.5M | [10. Acquisitions](index=12&type=section&id=10.%20Acquisitions) This note provides details on recent acquisitions, including Hero Cosmetics and Dr. Harold Katz, LLC - On October 13, 2022, the Company acquired Hero Cosmetics, Inc. (HERO® brand acne treatment products) for **$546.8 million cash** (net of cash acquired) and issued **$61.5 million** in restricted stock, with Hero's 2022 annual net sales at approximately **$179.0 million**[49](index=49&type=chunk)[173](index=173&type=chunk) - On December 24, 2021, the Company acquired Dr. Harold Katz, LLC and HK-IP International, Inc. (THERABREATH® brand oral care products) for **$556.0 million cash** (net of cash acquired) and deferred an additional **$14.0 million cash payment**, with TheraBreath's 2021 annual net sales at approximately **$100.0 million**[22](index=22&type=chunk)[50](index=50&type=chunk)[61](index=61&type=chunk) - Pro forma results for these acquisitions are not presented as their impact is not material to the Company's consolidated financial results[21](index=21&type=chunk)[149](index=149&type=chunk) [11. Goodwill and Other Intangibles, Net](index=13&type=section&id=11.%20Goodwill%20and%20Other%20Intangibles%2C%20Net) This note details the company's goodwill and other intangible assets, including amortization and impairment considerations | Intangible Asset Type | June 30, 2023 Net ($M) | December 31, 2022 Net ($M) | | :----------------------- | :--------------------- | :------------------------- | | Amortizable intangible assets | 1,408.0 | 1,470.2 | | Indefinite-lived trade names | 1,961.8 | 1,961.4 | | Goodwill | 2,430.3 | 2,426.8 | - Intangible amortization expense was **$31.1 million** for Q2 2023 (vs **$29.3 million** in Q2 2022) and **$62.2 million** for 6M 2023 (vs **$58.8 million** in 6M 2022), with estimated annual expense of **$124.0 million** in 2023 and **$123.0 million to $94.0 million** annually over the next five years[150](index=150&type=chunk) - A non-cash impairment charge of **$411.0 million** was recorded in Q4 2022 for FINISHING TOUCH FLAWLESS intangible assets due to product discontinuance at a major retailer and declining demand[24](index=24&type=chunk) - The WATERPIK trade name (carrying value **$644.7 million**) and TROJAN trade name (carrying value **$176.4 million**) are susceptible to future impairment charges due to declining customer demand, increased competition, and inflationary pressures, although fair value still exceeded carrying value as of October 1, 2022[79](index=79&type=chunk)[151](index=151&type=chunk) - The annual goodwill impairment test in Q2 2023 determined that the estimated fair value substantially exceeded the carrying values of all reporting units[54](index=54&type=chunk) [12. Leases](index=15&type=section&id=12.%20Leases) This note outlines the company's lease arrangements, including right-of-use assets, lease liabilities, and lease costs - The Company leases manufacturing facilities, warehouses, office space, railcars, and equipment, with all recorded leases classified as operating leases and lease expense recognized on a straight-line basis[26](index=26&type=chunk) | Metric | June 30, 2023 ($M) | December 31, 2022 ($M) | | :-------------------------------------- | :----------------- | :--------------------- | | Right of use assets | 156.3 | 162.6 | | Total lease liabilities | 169.0 | 173.8 | | Weighted-average remaining lease term (years) | 8.5 | 8.9 | | Weighted-average discount rate | 4.5% | 4.4% | | Metric | Three Months Ended June 30, 2023 ($M) | Three Months Ended June 30, 2022 ($M) | Six Months Ended June 30, 2023 ($M) | Six Months Ended June 30, 2022 ($M) | | :---------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Lease cost | 7.9 | 7.5 | 15.6 | 15.4 | [13. Accounts Payable, Accrued and Other Liabilities](index=17&type=section&id=13.%20Accounts%20Payable%2C%20Accrued%20and%20Other%20Liabilities) This note provides a breakdown of the company's current liabilities, including trade accounts payable and accrued expenses | Liability Component | June 30, 2023 ($M) | December 31, 2022 ($M) | | :-------------------------------------- | :----------------- | :--------------------- | | Trade accounts payable | 677.7 | 666.7 | | Accrued marketing and promotion costs | 225.3 | 234.4 | | Accrued wages and related benefit costs | 78.1 | 66.8 | | Other accrued current liabilities | 129.0 | 134.9 | | **Total** | **1,110.1** | **1,102.8** | - As of June 30, 2023, obligations outstanding related to the Supply Chain Finance (SCF) program amounted to **$83.2 million**, recorded within Accounts Payable[83](index=83&type=chunk) [14. Short-Term Borrowings and Long-Term Debt](index=18&type=section&id=14.%20Short-Term%20Borrowings%20and%20Long-Term%20Debt) This note details the company's short-term borrowings and long-term debt obligations, including senior notes and term loans | Debt Type | June 30, 2023 ($M) | December 31, 2022 ($M) | | :------------------------------ | :----------------- | :--------------------- | | Commercial paper issuances | 0.0 | 70.6 | | Various debt due to international banks | 4.0 | 3.4 | | **Total short-term borrowings** | **4.0** | **74.0** | | Term loan due December 22, 2024 | 200.0 | 400.0 | | 3.15% Senior notes due August 1, 2027 | 425.0 | 425.0 | | 2.3% Senior notes due December 15, 2031 | 400.0 | 400.0 | | 5.6% Senior notes due November 15, 2032 | 500.0 | 500.0 | | 3.95% Senior notes due August 1, 2047 | 400.0 | 400.0 | | 5.00% Senior notes due June 15, 2052 | 500.0 | 500.0 | | Debt issuance costs, net | (19.8) | (21.0) | | **Net long-term debt** | **2,400.9** | **2,599.5** | [15. Accumulated Other Comprehensive Income (Loss)](index=19&type=section&id=15.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This table presents the components of accumulated other comprehensive income (loss), including foreign currency adjustments and derivative agreements | Component | December 31, 2021 ($M) | June 30, 2022 ($M) | December 31, 2022 ($M) | June 30, 2023 ($M) | | :-------------------------------------- | :--------------------- | :----------------- | :--------------------- | :----------------- | | Foreign Currency Adjustments | (30.2) | (44.7) | (46.4) | (40.7) | | Defined Benefit Plans | (0.6) | 1.3 | 1.7 | 3.2 | | Derivative Agreements | (37.4) | (3.7) | 15.4 | 9.7 | | **Accumulated Other Comprehensive (Loss)** | **(68.2)** | **(47.1)** | **(29.3)** | **(27.8)** | [16. Commitments, Contingencies and Guarantees](index=19&type=section&id=16.%20Commitments%2C%20Contingencies%20and%20Guarantees) This note outlines the company's contractual commitments, potential legal contingencies, and indemnification obligations - The Company has an annual commitment to purchase **240,000 tons** of sodium-based raw materials at the prevailing market price and total commitments of approximately **$363.4 million** as of June 30, 2023, for raw materials, packaging, and services[60](index=60&type=chunk)[182](index=182&type=chunk) - Deferred cash payments related to indemnification obligations from the TheraBreath, Hero, and Zicam acquisitions amount to **$14.0 million**, **$8.0 million**, and **$20.0 million**, respectively[61](index=61&type=chunk)[183](index=183&type=chunk)[200](index=200&type=chunk) - The Company is subject to various pending or threatened legal actions and proceedings in the ordinary course of business, whose outcomes are uncertain and could have a material adverse impact on its financial condition[184](index=184&type=chunk)[230](index=230&type=chunk) [17. Related Party Transactions](index=20&type=section&id=17.%20Related%20Party%20Transactions) This note discloses transactions with related parties, specifically Armand Products Company and ArmaKleen Company - The Company holds a **50% ownership interest** in Armand Products Company and ArmaKleen Company[63](index=63&type=chunk)[202](index=202&type=chunk) | Transaction Type | Six Months Ended June 30, 2023 (Armand, $M) | Six Months Ended June 30, 2022 (Armand, $M) | Six Months Ended June 30, 2023 (ArmaKleen, $M) | Six Months Ended June 30, 2022 (ArmaKleen, $M) | | :------------------------ | :---------------------------------------- | :---------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Purchases by Company | 7.6 | 6.7 | 0.0 | 0.0 | | Sales by Company | 0.0 | 0.0 | 0.6 | 0.3 | | Outstanding Accounts Receivable | 0.4 | 0.6 | 1.4 | 1.0 | | Outstanding Accounts Payable | 1.6 | 1.9 | 0.0 | 0.0 | | Administration & Management Oversight Services | 1.1 | 1.1 | 1.0 | 1.0 | [18. Segments](index=20&type=section&id=18.%20Segments) This note provides financial information by reportable segment, including net sales and income before income taxes - The Company operates three reportable segments: Consumer Domestic (household and personal care products), Consumer International (primarily personal care products), and Specialty Products Division (SPD) (specialty chemical products), along with a Corporate segment[63](index=63&type=chunk)[89](index=89&type=chunk)[99](index=99&type=chunk)[204](index=204&type=chunk) | Segment | Q2 2023 Net Sales ($M) | Q2 2022 Net Sales ($M) | 6M 2023 Net Sales ($M) | 6M 2022 Net Sales ($M) | | :----------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Consumer Domestic | 1,128.2 | 1,004.7 | 2,245.1 | 1,999.8 | | Consumer International | 241.9 | 230.5 | 472.5 | 445.1 | | SPD | 84.1 | 89.9 | 166.4 | 177.4 | | Corporate | 0.0 | 0.0 | 0.0 | 0.0 | | **Total Consolidated** | **1,454.2** | **1,325.1** | **2,884.0** | **2,622.3** | | Segment | Q2 2023 Income before Income Taxes ($M) | Q2 2022 Income before Income Taxes ($M) | 6M 2023 Income before Income Taxes ($M) | 6M 2022 Income before Income Taxes ($M) | | :----------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Consumer Domestic | 230.7 | 201.7 | 459.4 | 424.4 | | Consumer International | 27.5 | 28.5 | 56.4 | 58.1 | | SPD | 9.2 | 12.4 | 16.0 | 23.9 | | Corporate | 2.0 | 3.9 | 6.4 | 6.3 | | **Total Consolidated** | **269.4** | **246.5** | **538.2** | **512.7** | - The Corporate segment income consists of equity in earnings of affiliates from Armand and ArmaKleen[74](index=74&type=chunk)[203](index=203&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=22&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section discusses the company's financial performance, condition, and liquidity, highlighting the impact of economic factors, consolidated results, and segment-specific performance [Recent Developments](index=22&type=section&id=Recent%20Developments) This section highlights recent economic and market trends impacting the company's costs, consumer demand, and business segments - Significant broad-based cost inflation and higher interest rates continue to affect input costs and consumer demand for discretionary brands like Waterpik and Flawless, leading consumers to shift to lower-cost alternatives[92](index=92&type=chunk)[188](index=188&type=chunk) - The Company is implementing strategies including price increases, managing production schedules and inventory, increasing promotional activities, and developing lower-cost alternatives to address these demand shifts[92](index=92&type=chunk) - The Specialty Products business has been negatively impacted by new foreign competition in the U.S. dairy market, and the vitamin business experienced reduced shelf space due to residual impacts from previous supply chain challenges[67](index=67&type=chunk)[205](index=205&type=chunk) [Consolidated Results](index=23&type=section&id=Consolidated%20Results) This section analyzes the company's overall financial performance, including net sales, gross margin, operating expenses, and diluted EPS | Metric | Q2 2023 Change vs. Prior Year | 6M 2023 Change vs. Prior Year | | :-------------------------------------- | :---------------------------- | :---------------------------- | | Net Sales increase | 9.7% | 10.0% | | Product volumes sold | (0.4%) | (0.2%) | | Pricing/Product mix | 5.8% | 5.8% | | Foreign exchange rate fluctuations | (0.2%) | (0.4%) | | Acquired product lines | 4.5% | 4.8% | | Metric | Q2 2023 ($M) | Q2 2022 ($M) | 6M 2023 ($M) | 6M 2022 ($M) | | :-------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Gross Profit | 638.9 | 545.3 | 1,260.9 | 1,097.8 | | Gross Margin | 43.9% | 41.2% | 43.7% | 41.9% | | Marketing Expenses | 132.2 | 102.9 | 254.5 | 204.8 | | Marketing Expenses as % of Net Sales | 9.1% | 7.8% | 8.8% | 7.8% | | Selling, General & Administrative Expenses | 213.1 | 180.8 | 420.9 | 350.7 | | SG&A as % of Net Sales | 14.6% | 13.6% | 14.6% | 13.4% | | Income from Operations | 293.6 | 261.6 | 585.5 | 542.3 | | Operating Margin | 20.2% | 19.8% | 20.3% | 20.7% | | Diluted Net Income per share | 0.89 | 0.76 | 1.72 | 1.59 | - Gross margin increased by **270 basis points** in Q2 2023 and **180 basis points** in 6M 2023, driven by favorable price/mix/volume, productivity programs, business acquisition mix benefits, and lower transportation costs, partially offset by higher manufacturing and commodity costs[193](index=193&type=chunk) - The effective tax rate decreased to **17.9%** in Q2 2023 (from **24.1%**) and **21.1%** in 6M 2023 (from **23.6%**), primarily due to the tax benefit on higher stock option exercises[73](index=73&type=chunk)[98](index=98&type=chunk)[211](index=211&type=chunk) [Segment Results](index=24&type=section&id=Segment%20Results) This section provides a detailed breakdown of financial performance across the company's Consumer Domestic, Consumer International, SPD, and Corporate segments [Consumer Domestic](index=26&type=section&id=Consumer%20Domestic) This section analyzes the performance of the Consumer Domestic segment, detailing sales drivers and income changes | Metric | Q2 2023 Change vs. Prior Year | 6M 2023 Change vs. Prior Year | | :---------------------- | :---------------------------- | :---------------------------- | | Net Sales increase | 12.3% | 12.3% | | Product volumes sold | (0.2%) | (0.6%) | | Pricing/Product mix | 6.5% | 6.5% | | Acquired product lines | 6.0% | 6.4% | - Net sales increase was driven by the HERO acquisition and higher sales of THERABREATH® mouthwash, ARM & HAMMER® Cat Litter, and ARM & HAMMER® Liquid Detergent, partially offset by declines in FINISHING TOUCH FLAWLESS® Hair Removal Products and WATERPIK® Shower Heads[102](index=102&type=chunk) - Income before income taxes increased by **$29.0 million** in Q2 2023 and **$35.0 million** in 6M 2023, primarily due to favorable price/mix and gross margin benefits from the HERO acquisition, partially offset by higher marketing, SG&A, interest, and manufacturing/distribution expenses[215](index=215&type=chunk) [Consumer International](index=26&type=section&id=Consumer%20International) This section analyzes the performance of the Consumer International segment, detailing sales growth and income changes | Metric | Q2 2023 Change vs. Prior Year | 6M 2023 Change vs. Prior Year | | :-------------------------------------- | :---------------------------- | :---------------------------- | | Net Sales increase | 4.9% | 6.2% | | Product volumes sold | 0.6% | 3.6% | | Pricing/Product mix | 5.5% | 5.3% | | Foreign exchange rate fluctuations | (1.2%) | (2.7%) | - Sales growth was driven by WATERPIK, THERABREATH, BATISTE, STERIMAR, OXICLEAN, FEMFRESH, A&H DENTAL CARE, and BAKING SODA across various regions[103](index=103&type=chunk) - Income before income taxes decreased by **$1.0 million** in Q2 2023 and **$1.7 million** in 6M 2023, primarily due to higher manufacturing and commodity costs, SG&A expenses, and unfavorable foreign exchange rates, partially offset by favorable price/mix and higher sales volumes[218](index=218&type=chunk) [Specialty Products ("SPD")](index=27&type=section&id=Specialty%20Products%20(%22SPD%22)) This section analyzes the performance of the Specialty Products Division (SPD), detailing sales and income changes | Metric | Q2 2023 Change vs. Prior Year | 6M 2023 Change vs. Prior Year | | :---------------------- | :---------------------------- | :---------------------------- | | Net Sales decrease | (6.5%) | (6.2%) | | Product volumes sold | (4.2%) | (5.8%) | | Pricing/Product mix | (2.3%) | (0.4%) | - Net sales decreased primarily due to competitive imports within the domestic dairy business[219](index=219&type=chunk) - Income before income taxes decreased by **$3.2 million** in Q2 2023 and **$7.9 million** in 6M 2023, mainly due to unfavorable price/product mix, higher SG&A and other expenses, and lower volumes, partially offset by favorable manufacturing costs[236](index=236&type=chunk) [Corporate](index=27&type=section&id=Corporate) This section details the Corporate segment's income before income taxes, primarily from equity in affiliates - The Corporate segment's income before income taxes, consisting of equity in earnings of affiliates (Armand and ArmaKleen), was **$2.0 million** in Q2 2023 (vs **$3.9 million** in Q2 2022) and **$6.4 million** for 6M 2023 (vs **$6.3 million** in 6M 2022)[237](index=237&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's cash flow, capital structure, and ability to fund operations, investments, and shareholder returns - Net cash provided by operating activities increased by **$198.8 million** to **$509.2 million** in the first six months of 2023, driven by improved working capital and increased cash earnings, including the impact of recent acquisitions[225](index=225&type=chunk)[226](index=226&type=chunk) - Net cash used in investing activities was **$69.2 million** (vs **$39.8 million** in 6M 2022), primarily for property, plant, and equipment additions, while net cash used in financing activities was **$315.4 million** (vs **$132.2 million** provided in 6M 2022), reflecting net debt payments and cash dividends, partially offset by stock option exercises[226](index=226&type=chunk)[227](index=227&type=chunk)[245](index=245&type=chunk) - The Board declared a **4% increase** in the regular quarterly dividend to **$0.2725 per share** (annual **$1.09 per share**) on February 1, 2023, raising the annual payout from **$255.0 million** to approximately **$265.0 million**[224](index=224&type=chunk) - As of June 30, 2023, the Company had **$396.9 million** in cash and cash equivalents, approximately **$1,495.0 million** available through its **$1,500.0 million** unsecured revolving credit facility (maturing June 16, 2027), and **$729.7 million** remaining under its 2021 Share Repurchase Program[222](index=222&type=chunk)[238](index=238&type=chunk)[242](index=242&type=chunk) - The Company repaid **$200.0 million** of its **$400.0 million** Term Loan due December 22, 2024, in Q1 2023 and anticipates sufficient liquidity to fund operations, debt, dividends, capital expenditures (expected **$250.0 million** in 2023), and potential acquisitions[239](index=239&type=chunk)[241](index=241&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK](index=29&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURE%20ABOUT%20MARKET%20RISK) This section refers to the company's Form 10-K for detailed disclosures on market risk, including exposure to interest rates, foreign exchange, and commodity prices, managed via derivatives - The Company is exposed to market risk from changes in interest rates, foreign exchange rates, the price of its Common Stock, and commodity prices[113](index=113&type=chunk) - These risks are managed through the use of derivative instruments, such as cash flow and fair value hedges, diesel and commodity hedge contracts, equity derivatives, and foreign exchange forward contracts, not for trading or speculative purposes[113](index=113&type=chunk) - Further quantitative and qualitative disclosures about market risk are provided in Item 7A of Part II in the Form 10-K[228](index=228&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=29&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - The Company's management, with the participation of the CEO and CFO, evaluated and concluded that the disclosure controls and procedures were effective as of the end of the reporting period, providing reasonable assurance that required information is timely recorded, processed, summarized, and reported[246](index=246&type=chunk) - There were no material changes in the Company's internal control over financial reporting during the most recent fiscal quarter[247](index=247&type=chunk) [CAUTIONARY NOTE ON FORWARD-LOOKING INFORMATION](index=29&type=section&id=CAUTIONARY%20NOTE%20ON%20FORWARD-LOOKING%20INFORMATION) This section provides a disclaimer on forward-looking statements, highlighting risks and uncertainties that could cause actual results to differ materially, with no obligation to update - The report contains forward-looking statements regarding various aspects of the business, including net sales and earnings growth, gross margin changes, spending, cash flows, EPS, acquisitions, and market conditions[248](index=248&type=chunk) - These statements represent intentions, plans, expectations, and beliefs based on assumptions that may prove incorrect, and are subject to numerous risks, uncertainties, and other factors outside the Company's control[249](index=249&type=chunk) - Factors that could cause actual results to differ materially include market growth decline, retailer distribution, consumer demand, impacts of COVID-19, regulatory changes, the Russia/Ukraine war, inflation, supply chain disruptions, competition, and interest rates[249](index=249&type=chunk) - The Company undertakes no obligation to publicly update any forward-looking statements, except as required by federal securities laws[249](index=249&type=chunk) [PART II – OTHER INFORMATION](index=30&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, other information, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=30&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is routinely involved in various legal actions and proceedings, whose uncertain outcomes could materially affect its financial condition - The Company is subject to various pending or threatened legal actions, government investigations, and proceedings in the ordinary course of its business[230](index=230&type=chunk) - Such proceedings are subject to many uncertainties, and their outcomes, along with any related damages, may not be reasonably predictable or estimable[230](index=230&type=chunk) - Any adverse outcome from these legal actions could have a material adverse effect on the Company's business, financial condition, results of operations, and cash flows[230](index=230&type=chunk) [ITEM 1A. RISK FACTORS](index=31&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section refers readers to the Form 10-K for a comprehensive discussion of risk factors that could materially affect the company's business and financial condition - Readers should carefully consider the factors discussed in Item 1A, "Risk Factors" in the Form 10-K[231](index=231&type=chunk) - These factors could materially affect the Company's business, financial condition, or future results[231](index=231&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=31&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details Q2 2023 share repurchases, which were solely for tax withholding obligations related to restricted stock vesting, not public programs - During the second quarter of 2023, the Company did not repurchase any shares of Common Stock pursuant to its publicly announced share repurchase programs[251](index=251&type=chunk) - The Company purchased **1,210 shares** during Q2 2023 solely to satisfy tax withholding obligations in connection with the vesting of restricted stock, at an average price of **$90.93 per share**[233](index=233&type=chunk)[251](index=251&type=chunk) - As of June 30, 2023, **$729.7 million** of share repurchase availability remains under the 2021 Share Repurchase Program[251](index=251&type=chunk) [ITEM 5. OTHER INFORMATION](index=31&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the three months ended June 30, 2023 - During the three months ended June 30, 2023, none of the Company's directors or executive officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of AAG securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement"[266](index=266&type=chunk) [ITEM 6. EXHIBITS](index=32&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including corporate amendments, CEO/CFO certifications, and Inline XBRL documents - Exhibits include amendments to the Company's Amended and Restated Certificate of Incorporation and By-laws[253](index=253&type=chunk)[267](index=267&type=chunk)[268](index=268&type=chunk) - Certifications of the Chief Executive Officer and Chief Financial Officer are included pursuant to Rule 13a-14(a) and 13a-14(b) under the Securities Exchange Act and 18 U.S.C. Section 1350[235](index=235&type=chunk)[254](index=254&type=chunk)[269](index=269&type=chunk)[255](index=255&type=chunk) - Various Inline XBRL Taxonomy Extension Documents (Schema, Definition, Presentation, Calculation, Label, Instance) and the Cover Page Interactive Data File are also filed[256](index=256&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk) [SIGNATURES](index=33&type=section&id=SIGNATURES) The report is signed by the Executive Vice President and Chief Financial Officer and Vice President and Controller on July 28, 2023, certifying its submission - The report was duly caused to be signed on behalf of CHURCH & DWIGHT CO., INC. by Richard A. Dierker, Executive Vice President and Chief Financial Officer (Principal Financial Officer), and Joseph J. Longo, Vice President and Controller (Principal Accounting Officer)[261](index=261&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) - The signing date for the report is July 28, 2023[261](index=261&type=chunk)[275](index=275&type=chunk)

Financial Data and Key Metrics Changes - Q1 reported revenue growth was 10.2%, with organic sales increasing by 5.7%, exceeding the initial outlook of 4% [26][33] - Adjusted EPS for Q1 was $0.85, which was $0.10 higher than the expected $0.75, driven by strong consumer demand and higher-than-expected gross margins [27][33] - Cash from operating activities increased to $273 million, with full-year cash flow from operations expected to be approximately $950 million [11] Business Line Data and Key Metrics Changes - ARM & HAMMER laundry detergent grew by 9.3%, gaining market share, while the overall liquid laundry category grew by 3.6% [28][155] - The HERO brand saw a year-over-year consumption growth of 43.5%, achieving a 9.1% market share in the acne treatment category [30][33] - THERABREATH mouthwash grew by 70% in consumption, increasing its market share to 22.5% in the alcohol-free mouthwash segment [5][156] Market Data and Key Metrics Changes - The international business delivered organic growth of 11.6% in Q1, driven by strong performance across various global regions [157] - In the U.S. consumer market, organic sales growth was 5.5%, with eight out of fourteen power brands holding or gaining market share [154] - The dry shampoo category grew by 11.8%, with BATISTE achieving a 46.2% market share [155] Company Strategy and Development Direction - The company plans to increase marketing investments to support brand growth and new product launches, with a target of 10.5% of sales for marketing [12][140] - The focus remains on both premium and value brands, with a strategy to capitalize on consumer trade-down trends [4][114] - The company expects to make incremental investments in brands and capabilities in future quarters, reflecting confidence in business strength [12][140] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to volume growth later in the year, following flat volume growth in Q1 [9][12] - The company noted that while inflation remains a concern, pricing and productivity improvements are expected to offset inflationary pressures [12][118] - Management highlighted the importance of sustainability projects and alternative packaging as part of their long-term strategy [38] Other Important Information - The company raised its full-year outlook for sales, EPS, gross margin, and cash flow based on strong Q1 results [12][140] - The effective tax rate for Q1 was 24.4%, an increase from 23.2% in the previous year, with expectations for the full year to be around 23% [11] Q&A Session Summary Question: How is HERO performing relative to expectations? - Management indicated that HERO is performing better than expected, with both distribution and velocity exceeding initial forecasts [22][39] Question: What is the outlook for the personal care business? - Management noted that the personal care business is stabilizing, with expectations for improved performance in the second half of the year [40][65] Question: What are the expectations for gross margin and pricing? - Management expects gross margin to expand by approximately 120 basis points year-over-year, with pricing expected to contribute positively [12][38] Question: How is the company addressing consumer trade-down behavior? - Management acknowledged that both brand strength and consumer trade-down are contributing factors, with ARM & HAMMER benefiting from its strong brand presence [114][125] Question: What is the company's view on input costs and inflation? - Management stated that input costs are mixed, with some costs moderating while others remain high, but overall inflation expectations are unchanged [118][120]

[PART I – FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements for Church & Dwight Co., Inc. and its subsidiaries for the quarter ended March 31, 2023, including income, comprehensive income, balance sheets, cash flows, and stockholders' equity, along with detailed notes [ITEM 1: FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201%3A%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for Church & Dwight Co., Inc. and its subsidiaries for the quarter ended March 31, 2023, including statements of income, comprehensive income, balance sheets, cash flows, and stockholders' equity, along with detailed notes explaining the basis of presentation, accounting policies, and specific financial line items [Condensed Consolidated Statements of Income](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) This statement presents the company's revenues, expenses, and net income for the three months ended March 31, 2023 and 2022 | Metric | Three Months Ended March 31, 2023 ($M) | Three Months Ended March 31, 2022 ($M) | |:---|:---|:---| | Net Sales | 1,429.8 | 1,297.2 | | Gross Profit | 622.0 | 552.5 | | Income from Operations | 291.9 | 280.7 | | Net Income | 203.2 | 204.4 | | Net income per share - Basic | 0.83 | 0.84 | | Net income per share - Diluted | 0.82 | 0.83 | | Cash dividends per share | 0.27 | 0.26 | [Condensed Consolidated Statements of Comprehensive Income](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) This statement details net income and other comprehensive income components, such as foreign currency adjustments, for the specified periods | Metric | Three Months Ended March 31, 2023 ($M) | Three Months Ended March 31, 2022 ($M) | |:---|:---|:---| | Net Income | 203.2 | 204.4 | | Other comprehensive income (loss) | 3.1 | 15.0 | | Comprehensive income | 206.3 | 219.4 | [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This statement provides a snapshot of the company's assets, liabilities, and stockholders' equity at March 31, 2023, and December 31, 2022 | Metric | March 31, 2023 ($M) | December 31, 2022 ($M) | |:---|:---|:---|\ | Total Current Assets | 1,334.9 | 1,395.9 | | Total Assets | 8,266.6 | 8,345.6 | | Total Current Liabilities | 1,126.9 | 1,183.8 | | Total Liabilities | 4,598.9 | 4,855.7 | | Total Stockholders' Equity | 3,667.7 | 3,489.9 | [Condensed Consolidated Statements of Cash Flow](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOW) This statement outlines the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2023 and 2022 | Metric | Three Months Ended March 31, 2023 ($M) | Three Months Ended March 31, 2022 ($M) | |:---|:---|:---|\ | Net Cash Provided By Operating Activities | 273.1 | 152.8 | | Net Cash Used In Investing Activities | (29.6) | (15.7) | | Net Cash Used In Financing Activities | (311.7) | (202.6) | | Net Change In Cash and Cash Equivalents | (67.5) | (66.2) | | Cash and Cash Equivalents at End of Period | 202.8 | 174.4 | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) This statement details changes in the company's equity accounts, including net income, dividends, and stock-based compensation, for the specified periods | Metric | March 31, 2023 ($M) | December 31, 2022 ($M) | |:---|:---|:---|\ | Total Stockholders' Equity | 3,667.7 | 3,489.9 | | Net income | 203.2 | 203.2 | | Cash dividends | (66.3) | (66.3) | | Stock based compensation expense and stock option plan transactions | 37.8 | 37.8 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes provide additional information and explanations for the figures presented in the condensed consolidated financial statements [1. Basis of Presentation](index=8&type=section&id=1.%20Basis%20of%20Presentation) This note describes the accounting principles and conventions used in preparing the unaudited condensed consolidated financial statements - The condensed consolidated financial statements are unaudited and include only normal recurring adjustments, and should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2022[44](index=44&type=chunk) - Research and development expenses were **$26.7 million** in Q1 2023 and **$24.5 million** in Q1 2022, included in SG&A expenses[31](index=31&type=chunk) [2. New Accounting Pronouncements](index=8&type=section&id=2.%20New%20Accounting%20Pronouncements) This note discusses recently adopted and upcoming accounting standards and their expected impact on the company's financial reporting - The Company adopted new FASB guidance on supplier finance programs, requiring annual and interim disclosures about program terms and outstanding amounts, which resulted in additional disclosures[45](index=45&type=chunk) - No other new accounting pronouncements are expected to have a material impact on the Company's financial position, results of operations, or cash flows[32](index=32&type=chunk) [3. Inventories](index=8&type=section&id=3.%20Inventories) This note provides a breakdown of the company's inventory components, including raw materials, work in process, and finished goods | Inventory Type | March 31, 2023 ($M) | December 31, 2022 ($M) | |:---|:---|:---|\ | Raw materials and supplies | 146.3 | 149.5 | | Work in process | 40.8 | 46.8 | | Finished goods | 466.2 | 450.3 | | Total | 653.3 | 646.6 | [4. Property, Plant and Equipment, Net ("PP&E")](index=9&type=section&id=4.%20Property%2C%20Plant%20and%20Equipment%2C%20Net%20(%22PP%26E%22)) This note details the company's property, plant, and equipment, including gross amounts, accumulated depreciation, and net book value | PP&E Category | March 31, 2023 ($M) | December 31, 2022 ($M) | |:---|:---|:---|\ | Gross PP&E | 1,628.3 | 1,601.2 | | Less accumulated depreciation and amortization | 856.1 | 840.1 | | Net PP&E | 772.2 | 761.1 | | Depreciation expense on PP&E (Q1 2023) | 16.9 | 16.6 | [5. Earnings Per Share ("EPS")](index=9&type=section&id=5.%20Earnings%20Per%20Share%20(%22EPS%22)) This note explains the calculation of basic and diluted earnings per share, including the impact of stock-based awards - Basic EPS is calculated based on income available to common stockholders and weighted average shares outstanding, while diluted EPS includes potential dilution from stock-based compensation plans[67](index=67&type=chunk) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |:---|:---|:---|\ | Weighted average common shares outstanding - basic (Millions) | 243.8 | 242.6 | | Dilutive effect of stock options and other unvested stock-based awards (Millions) | 3.0 | 4.1 | | Weighted average common shares outstanding - diluted (Millions) | 246.8 | 246.7 | | Antidilutive stock options outstanding (Millions) | 3.9 | 0.2 | [6. Stock Based Compensation Plans](index=10&type=section&id=6.%20Stock%20Based%20Compensation%20Plans) This note describes the company's various stock-based compensation programs, including stock options, restricted stock units, and performance stock units - In Q1 2023, the Company updated its Long-Term Incentive Program (LTIP) to include stock options, Restricted Stock Units (RSUs), and Performance Share Units (PSUs, for ELT members), accelerating grants to Q1[49](index=49&type=chunk) [Stock Options](index=10&type=section&id=Stock%20Options) This section provides details on the company's stock option grants, exercises, and related compensation expenses | Metric | March 31, 2023 (Millions of Shares) | December 31, 2022 (Millions of Shares) | |:---|:---|:---|\ | Outstanding Options | 12.5 | 11.9 | | Weighted Average Exercise Price | $64.43 | $62.64 | | Exercisable Options | 7.0 | N/A | | Weighted Average Exercise Price (Exercisable) | $51.25 | N/A | | Metric | Three Months Ended March 31, 2023 ($M) | Three Months Ended March 31, 2022 ($M) | |:---|:---|:---|\ | Intrinsic Value of Stock Options Exercised | 10.7 | 16.8 | | Stock Compensation Expense Related to Stock Option Awards | 14.5 | 2.8 | | Issued Stock Options (Millions of Shares) | 1.0 | - | | Weighted Average Fair Value of Stock Options issued (per share) | $23.93 | - | [Restricted Stock Units](index=10&type=section&id=Restricted%20Stock%20Units) This section outlines the company's restricted stock unit grants, vesting schedules, and associated fair values - In Q1 2023, **88,480 RSUs** were granted with a total fair value of **$7.4 million** (weighted average grant date fair value of **$83.13 per RSU**), vesting one-third annually over three years[70](index=70&type=chunk) - **854,882 shares** of restricted stock were issued in October 2022 in connection with the Hero Acquisition, vesting over a three-year period[70](index=70&type=chunk) [Performance Stock Units](index=11&type=section&id=Performance%20Stock%20Units) This section describes the company's performance stock unit awards, including vesting conditions tied to performance metrics - In Q1 2023, **19,650 PSUs** were granted to Executive Leadership Team members, valued at **$110.95 per PSU**, with vesting based on the Company's Total Shareholder Return (TSR) relative to a peer group over three years, with potential share issuance ranging from 0% to 200%[39](index=39&type=chunk) [7. Share Repurchases](index=11&type=section&id=7.%20Share%20Repurchases) This note details the company's share repurchase programs, including authorization amounts and remaining availability - The 2021 Share Repurchase Program, authorized on October 28, 2021, allows for repurchases of up to **$1,000.0 million** in Common Stock and has no expiration date[52](index=52&type=chunk) - As of March 31, 2023, **$729.7 million** of share repurchase availability remained under the 2021 Share Repurchase Program[53](index=53&type=chunk) [8. Fair Value Measurements](index=11&type=section&id=8.%20Fair%20Value%20Measurements) This note provides information on the fair value of financial instruments, categorized by input levels used in their valuation | Financial Instrument | Input Level | March 31, 2023 Carrying Amount ($M) | March 31, 2023 Fair Value ($M) | December 31, 2022 Carrying Amount ($M) | December 31, 2022 Fair Value ($M) | |:---|:---|:---|:---|:---|:---|\ | Cash equivalents | Level 1 | 90.0 | 90.0 | 153.9 | 153.9 | | Short-term borrowings | Level 2 | 18.7 | 18.7 | 74.0 | 74.0 | | Term loan due December 22, 2024 | Level 2 | 200.0 | 200.0 | 400.0 | 400.0 | | 3.15% Senior notes due August 1, 2027 | Level 2 | 424.8 | 406.9 | 424.8 | 397.3 | | 2.3% Senior notes due December 15, 2031 | Level 2 | 399.3 | 333.3 | 399.3 | 321.3 | | 5.6% Senior notes due November 15, 2032 | Level 2 | 499.1 | 534.5 | 499.1 | 518.9 | | 3.95% Senior notes due August 1, 2047 | Level 2 | 397.6 | 335.6 | 397.6 | 316.7 | | 5.0% Senior notes due June 15, 2052 | Level 2 | 499.8 | 492.2 | 499.7 | 464.7 | - The carrying amounts of Accounts Receivable, and Accounts Payable and Accrued Expenses, approximated estimated fair values as of March 31, 2023 and December 31, 2022[55](index=55&type=chunk) [9. Derivative Instruments and Risk Management](index=12&type=section&id=9.%20Derivative%20Instruments%20and%20Risk%20Management) This note describes the company's use of derivative instruments to manage exposure to market risks, such as interest rate and foreign exchange fluctuations - The Company uses derivative instruments (cash flow and fair value hedges, diesel and commodity hedge contracts, equity derivatives, foreign exchange forward contracts) to manage market risks from interest rates, foreign exchange rates, stock prices, and commodity prices, not for trading or speculative purposes[72](index=72&type=chunk) | Derivative Type | Notional Amount March 31, 2023 | Notional Amount December 31, 2022 | |:---|:---|:---|\ | Foreign exchange contracts (hedging) ($M) | 243.2 | 231.5 | | Diesel fuel contracts (hedging) (gallons) | 6.0 | 5.0 | | Commodities contracts (hedging) (pounds) | 19.5 | 26.8 | | Foreign exchange contracts (non-hedging) ($M) | 2.6 | 1.6 | | Equity derivatives (non-hedging) ($M) | 22.8 | 22.5 | [10. Acquisitions](index=13&type=section&id=10.%20Acquisitions) This note provides details on recent business acquisitions, including purchase prices, financing, and the nature of the acquired businesses [Hero Acquisition](index=13&type=section&id=Hero%20Acquisition) This section details the acquisition of Hero Cosmetics, Inc., including the purchase price, financing, and related compensation - On October 13, 2022, the Company acquired Hero Cosmetics, Inc. (HERO® brand, including MIGHTY PATCH®) for **$546.8 million** cash (net of cash acquired) and deferred an **$8.0 million** payment for indemnification obligations[75](index=75&type=chunk) - The acquisition also involved issuing **$61.5 million** in restricted stock, recognized as compensation expense over a three-year vesting period[75](index=75&type=chunk) - Hero's annual net sales for 2022 were approximately **$179.0 million**, and the acquisition was financed with cash on hand and commercial paper borrowings[75](index=75&type=chunk) [TheraBreath Acquisition](index=13&type=section&id=TheraBreath%20Acquisition) This section outlines the acquisition of the THERABREATH® brand, including the purchase price and financing arrangements - On December 24, 2021, the Company acquired Dr. Harold Katz, LLC and HK-IP International, Inc. (THERABREATH® brand) for **$556.0 million** cash (net of cash acquired) and deferred a **$14.0 million** payment for indemnity obligations[62](index=62&type=chunk) - THERABREATH's annual net sales for 2021 were approximately **$100.0 million**, and the acquisition was financed by a **$400.0 million** term loan and **$400.0 million** Senior Notes[62](index=62&type=chunk) [11. Goodwill and Other Intangibles, Net](index=14&type=section&id=11.%20Goodwill%20and%20Other%20Intangibles%2C%20Net) This note provides a breakdown of the company's goodwill and other intangible assets, including those with definite and indefinite useful lives - The Company's balance sheet includes substantial intangible assets, categorized as those with a useful life, indefinite-lived trade names, and goodwill[100](index=100&type=chunk) [Intangible Assets With a Useful Life](index=14&type=section&id=Intangible%20Assets%20With%20a%20Useful%20Life) This section details amortizable intangible assets, including trade names, customer relationships, and patents, along with their amortization expenses | Amortizable Intangible Assets | March 31, 2023 Net ($M) | December 31, 2022 Net ($M) | |:---|:---|:---|\ | Trade Names | 1,041.0 | 1,060.6 | | Customer Relationships | 296.8 | 305.2 | | Patents/Formulas | 101.3 | 104.4 | | Total | 1,439.1 | 1,470.2 | - Intangible amortization expense was **$31.1 million** in Q1 2023 and **$29.5 million** in Q1 2022, with estimated annual amortization expense of **$124.0 million** for 2023 and **$123.0 million to $94.0 million** over the next five years[80](index=80&type=chunk) - A non-cash impairment charge of **$411.0 million** was recorded in Q4 2022 for FINISHING TOUCH FLAWLESS intangible assets due to product discontinuance at a major retailer and declining consumer demand[63](index=63&type=chunk) [Indefinite-Lived Intangible Assets](index=15&type=section&id=Indefinite-Lived%20Intangible%20Assets) This section discusses intangible assets with indefinite useful lives, primarily trade names, and potential impairment risks | Indefinite-Lived Intangible Assets | March 31, 2023 ($M) | December 31, 2022 ($M) | |:---|:---|:---|\ | Trade Names | 1,961.5 | 1,961.4 | - The global WATERPIK business faces potential impairment due to declining customer demand for discretionary products and a shift to value-branded products, eroding the excess fair value over carrying value of its trade name[82](index=82&type=chunk) - The global TROJAN® business (condom category) is susceptible to impairment due to lack of growth, increased competition, and negative impacts from inflation and supply shortages, which have reduced expected future cash flows[103](index=103&type=chunk) [Goodwill](index=16&type=section&id=Goodwill) This section presents the company's goodwill by segment and discusses the results of impairment tests | Segment | Balance at December 31, 2022 ($M) | Hero working capital adjustment ($M) | Balance at March 31, 2023 ($M) | |:---|:---|:---|:---|\ | Consumer Domestic | 2,056.4 | 3.5 | 2,059.9 | | Consumer International | 234.4 | 0.0 | 234.4 | | Specialty Products | 136.0 | 0.0 | 136.0 | | Total | 2,426.8 | 3.5 | 2,430.3 | - The annual goodwill impairment test in Q2 2022 determined that the estimated fair value substantially exceeded the carrying values of all reporting units[66](index=66&type=chunk) [12. Leases](index=16&type=section&id=12.%20Leases) This note provides information on the company's operating leases, including right-of-use assets, lease liabilities, and lease costs - The Company leases manufacturing facilities, warehouses, office space, railcars, and equipment, with all recorded leases classified as operating leases[105](index=105&type=chunk) | Metric | March 31, 2023 ($M) | December 31, 2022 ($M) | |:---|:---|:---|\ | Right of use assets | 158.0 | 162.6 | | Current lease liabilities | 21.9 | 21.9 | | Long-term lease liabilities | 148.8 | 151.9 | | Total lease liabilities | 170.7 | 173.8 | | Weighted-average remaining lease term (years) | 8.8 | 8.9 | | Weighted-average discount rate | 4.5% | 4.4% | | Lease cost (Q1 2023) ($M) | 7.7 | 7.9 | [13. Accounts Payable and Accrued Expenses](index=18&type=section&id=13.%20Accounts%20Payable%20and%20Accrued%20Expenses) This note details the components of accounts payable and accrued expenses, including trade payables and marketing costs | Category | March 31, 2023 ($M) | December 31, 2022 ($M) | |:---|:---|:---|\ | Trade accounts payable | 651.5 | 666.7 | | Accrued marketing and promotion costs | 211.8 | 234.4 | | Accrued wages and related benefit costs | 47.4 | 66.8 | | Other accrued current liabilities | 139.1 | 134.9 | | Total | 1,049.8 | 1,102.8 | - The Company operates a Supply Chain Finance (SCF) program, allowing suppliers to sell receivables for early payment, with **$88.3 million** in obligations outstanding under the SCF program as of March 31, 2023, recorded within Accounts Payable[87](index=87&type=chunk)[109](index=109&type=chunk) [14. Short-Term Borrowings and Long-Term Debt](index=18&type=section&id=14.%20Short-Term%20Borrowings%20and%20Long-Term%20Debt) This note outlines the company's short-term borrowings and long-term debt obligations, including commercial paper and senior notes | Category | March 31, 2023 ($M) | December 31, 2022 ($M) | |:---|:---|:---|\ | **Short-term borrowings:** | | | | Commercial paper issuances | 15.0 | 70.6 | | Various debt due to international banks | 3.7 | 3.4 | | Total short-term borrowings | 18.7 | 74.0 | | **Long-term debt (net):** | | | | Term loan due December 22, 2024 | 200.0 | 400.0 | | 3.15% Senior notes due August 1, 2027 | 425.0 | 425.0 | | 2.3% Senior notes due December 15, 2031 | 400.0 | 400.0 | | 5.6% Senior notes due November 15, 2032 | 500.0 | 500.0 | | 3.95% Senior notes due August 1, 2047 | 400.0 | 400.0 | | 5.0% Senior notes due June 15, 2052 | 500.0 | 500.0 | | Net long-term debt | 2,400.1 | 2,599.5 | [15. Accumulated Other Comprehensive Income (Loss)](index=19&type=section&id=15.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note provides a breakdown of the components of accumulated other comprehensive income (loss), including foreign currency adjustments and derivative agreements | Component | Balance at December 31, 2022 ($M) | Other comprehensive income (loss) before reclassifications ($M) | Amounts reclassified to consolidated statement of income ($M) | Tax benefit (expense) ($M) | Other comprehensive income (loss) ($M) | Balance at March 31, 2023 ($M) | |:---|:---|:---|:---|:---|:---|:---|\ | Foreign Currency Adjustments | (46.4) | 2.4 | 0.0 | 0.0 | 2.4 | (44.0) | | Defined Benefit Plans | 1.7 | 2.0 | 0.0 | (0.5) | 1.5 | 3.2 | | Derivative Agreements | 15.4 | (0.2) | (0.9) | 0.3 | (0.8) | 14.6 | | Total Accumulated Other Comprehensive (Loss) | (29.3) | 4.2 | (0.9) | (0.2) | 3.1 | (26.2) | [16. Commitments, Contingencies and Guarantees](index=19&type=section&id=16.%20Commitments%2C%20Contingencies%20and%20Guarantees) This note discloses the company's various commitments, contingencies, and guarantees, including purchase obligations and legal proceedings [Commitments](index=19&type=section&id=Commitments) This section details the company's contractual obligations, such as raw material purchase agreements and deferred acquisition payments - The Company has an annual commitment to purchase **240,000 tons** of sodium-based raw materials from a partnership at prevailing market prices[90](index=90&type=chunk) - As of March 31, 2023, the Company had commitments of approximately **$396.7 million** for raw materials, packaging supplies, services, licensing, and promotion agreements[112](index=112&type=chunk) - Deferred cash payments related to indemnity obligations from the TheraBreath Acquisition (**$14.0 million**) and Hero Acquisition (**$8.0 million**) are payable in installments or after five years, respectively[92](index=92&type=chunk)[114](index=114&type=chunk) [Legal proceedings](index=19&type=section&id=Legal%20proceedings) This section discusses ongoing or threatened legal, regulatory, and governmental actions affecting the company - The Company is subject to various pending or threatened legal, regulatory, or governmental actions in the ordinary course of business, including intellectual property, product liability, and consumer class actions[95](index=95&type=chunk)[191](index=191&type=chunk) - Outcomes of these proceedings are uncertain and could result in material adverse impacts on the Company's business, financial condition, results of operations, or cash flows[95](index=95&type=chunk)[191](index=191&type=chunk) [17. Related Party Transactions](index=20&type=section&id=17.%20Related%20Party%20Transactions) This note describes transactions with entities in which the company holds a significant ownership interest - The Company holds a **50% ownership interest** in Armand Products Company and ArmaKleen Company[96](index=96&type=chunk)[97](index=97&type=chunk) | Transaction Type | Armand (Q1 2023) ($M) | Armand (Q1 2022) ($M) | ArmaKleen (Q1 2023) ($M) | ArmaKleen (Q1 2022) ($M) | |:---|:---|:---|:---|:---|\ | Purchases by Company | 3.7 | 3.0 | 0.0 | 0.0 | | Sales by Company | 0.0 | 0.0 | 0.0 | 0.1 | | Outstanding Accounts Receivable | 0.6 | 0.4 | 1.6 | 0.6 | | Outstanding Accounts Payable | 1.2 | 1.6 | 0.0 | 0.0 | | Administration & Management Oversight Services | 0.6 | 0.6 | 0.5 | 0.5 | [18. Segments](index=20&type=section&id=18.%20Segments) This note provides financial information by reportable segment, including net sales and income before income taxes - The Company operates three reportable segments: Consumer Domestic (household and personal care products), Consumer International (primarily personal care products), and Specialty Products Division (SPD, specialty chemical products), plus a Corporate segment[96](index=96&type=chunk)[118](index=118&type=chunk)[128](index=128&type=chunk) [Segment Net Sales and Income before Income Taxes](index=21&type=section&id=Segment%20Net%20Sales%20and%20Income%20before%20Income%20Taxes) This section presents net sales and income before income taxes for the Consumer Domestic, Consumer International, and Specialty Products segments | Segment | Net Sales Q1 2023 ($M) | Net Sales Q1 2022 ($M) | Income before Income Taxes Q1 2023 ($M) | Income before Income Taxes Q1 2022 ($M) | |:---|:---|:---|:---|:---|\ | Consumer Domestic | 1,116.9 | 995.1 | 228.7 | 222.7 | | Consumer International | 230.6 | 214.6 | 28.9 | 29.6 | | SPD | 82.3 | 87.5 | 6.8 | 11.5 | | Corporate | 0.0 | 0.0 | 4.4 | 2.4 | | Total | 1,429.8 | 1,297.2 | 268.8 | 266.2 | - The Corporate segment's income consists of equity in earnings from affiliates (Armand and ArmaKleen), totaling **$4.4 million** in Q1 2023 and **$2.4 million** in Q1 2022[97](index=97&type=chunk)[98](index=98&type=chunk) [Product Line Revenues](index=21&type=section&id=Product%20Line%20Revenues) This section breaks down net sales by major product lines within the Consumer Domestic segment and other segments | Product Line | Three Months Ended March 31, 2023 ($M) | Three Months Ended March 31, 2022 ($M) | |:---|:---|:---|\ | Household Products | 601.6 | 520.5 | | Personal Care Products | 515.3 | 474.6 | | Total Consumer Domestic | 1,116.9 | 995.1 | | Total Consumer International | 230.6 | 214.6 | | Total SPD | 82.3 | 87.5 | | Total Consolidated Net Sales | 1,429.8 | 1,297.2 | - Household Products include laundry, deodorizing, and cleaning products, while Personal Care Products include condoms, pregnancy kits, oral care, skin care, hair care, cold/remedy products, and gummy dietary supplements[130](index=130&type=chunk)[160](index=160&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=22&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides an analysis of the Company's financial condition and results of operations for the quarter ended March 31, 2023, discussing recent developments, consolidated and segment-level performance, and liquidity and capital resources [Recent Developments](index=22&type=section&id=Recent%20Developments) This section highlights key operational and economic factors impacting the company, including supply chain issues and inflation - The Company continues to face adverse supply chain impacts, including raw material and labor shortages, affecting its ability to meet consumer demand for vitamins and STERIMAR nasal congestion relief products[122](index=122&type=chunk) - Significant broad-based cost inflation and higher interest rates have impacted input costs and consumer behavior, though conditions are improving, and pricing/productivity are expected to offset inflation in the near term[122](index=122&type=chunk) - The Specialty Products business is negatively impacted by new foreign competition in the U.S. dairy market, with expectations of continued low-priced imports[123](index=123&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) This section analyzes the company's consolidated and segment-level financial performance for the quarter [Consolidated results](index=22&type=section&id=Consolidated%20results) This section provides an overview of the company's overall financial performance, including net sales, gross profit, and operating income | Metric | March 31, 2023 ($M) | YoY Change | March 31, 2022 ($M) | |:---|:---|:---|:---|\ | Net Sales | 1,429.8 | 10.2% | 1,297.2 | | Gross Profit | 622.0 | 12.6% | 552.5 | | Gross Margin | 43.5% | +90 bps | 42.6% | | Marketing Expenses | 122.3 | 20.0% | 101.9 | | Marketing Expenses % of Net Sales | 8.6% | +70 bps | 7.9% | | Selling, General & Administrative Expenses | 207.8 | 22.3% | 169.9 | | SG&A % of Net Sales | 14.5% | +140 bps | 13.1% | | Income from Operations | 291.9 | 4.0% | 280.7 | | Operating Margin | 20.4% | -120 bps | 21.6% | | Net income per share - Diluted | 0.82 | -1.2% | 0.83 | [Net Sales](index=23&type=section&id=Net%20Sales) This section analyzes the drivers of changes in consolidated net sales, including volume, pricing, foreign exchange, and acquisitions - Consolidated net sales increased by **$132.6 million** or **10.2%** to **$1,429.8 million** for the three months ended March 31, 2023, compared to the same period in 2022[138](index=138&type=chunk) | Component of Net Sales Increase | Three Months Ended March 31, 2023 | |:---|:---|\ | Product volumes sold | (—%) | | Pricing/Product mix | 5.7% | | Foreign exchange rate fluctuations | (0.7%) | | Acquired product lines | 5.2% | | Net Sales increase | 10.2% | - Volume change reflects increased product unit sales in Consumer International, offset by decreases in Consumer Domestic and SPD segments, while price/mix was favorable across all three segments[138](index=138&type=chunk) [Gross Profit / Gross Margin](index=23&type=section&id=Gross%20Profit%20%2F%20Gross%20Margin) This section discusses the factors influencing changes in gross profit and gross margin, such as pricing, productivity, and manufacturing costs - Gross profit increased by **$69.5 million**, and gross margin increased by **90 basis points** to **43.5%** in Q1 2023 compared to Q1 2022[125](index=125&type=chunk)[136](index=136&type=chunk) - Gross margin improvement was driven by favorable price/mix/volume (**+160 bps**), productivity programs (**+160 bps**), business acquisition mix benefits (**+120 bps**), lower transportation costs (**+70 bps**), and favorable foreign exchange (**+10 bps**)[125](index=125&type=chunk) - These gains were partially offset by higher manufacturing costs, including labor (**-360 bps**), and higher commodities (**-70 bps**)[125](index=125&type=chunk) [Operating Expenses](index=23&type=section&id=Operating%20Expenses) This section examines changes in marketing, selling, general, and administrative expenses, and interest expense - Marketing expenses increased by **$20.4 million** (**20.0%**) to **$122.3 million** in Q1 2023, rising to **8.6% of net sales** (**+70 bps**) due to increased marketing spend as fill rates improved[156](index=156&type=chunk) - SG&A expenses increased by **$37.9 million** (**22.3%**) to **$207.8 million** in Q1 2023, reaching **14.5% of net sales** (**+140 bps**), primarily due to expenses related to the Hero Acquisition[156](index=156&type=chunk) - Interest expense increased by **$12.2 million** to **$28.8 million** in Q1 2023, mainly due to higher interest rates[156](index=156&type=chunk) [Income Taxes](index=23&type=section&id=Income%20Taxes) This section explains the effective tax rate and the factors contributing to its change - The effective tax rate increased to **24.4%** in Q1 2023 from **23.2%** in Q1 2022, primarily due to lower stock option exercises and non-deductible compensation expense from the Hero Acquisition[140](index=140&type=chunk) [Segment results](index=24&type=section&id=Segment%20results) This section provides a detailed analysis of the financial performance for each of the company's operating segments [Consumer Domestic](index=25&type=section&id=Consumer%20Domestic) This section analyzes the net sales and income before income taxes for the company's domestic consumer products segment | Component of Net Sales Change | Three Months Ended March 31, 2023 | |:---|:---|\ | Product volumes sold | (0.9%) | | Pricing/Product mix | 6.4% | | Acquired product lines | 6.7% | | Net Sales increase | 12.2% | - Net sales increased by **$121.8 million** or **12.2%** to **$1,116.9 million** in Q1 2023, driven by the Hero Acquisition, ARM & HAMMER® Liquid Detergent, Cat Litter, THERABREATH® mouthwash, and XTRA® Liquid Detergent[144](index=144&type=chunk) - Income before income taxes increased by **$6.0 million** to **$228.7 million**, primarily due to favorable price/mix and higher sales volumes, partially offset by increased SG&A, marketing, manufacturing, distribution, and interest expenses[162](index=162&type=chunk) [Consumer International](index=25&type=section&id=Consumer%20International) This section analyzes the net sales and income before income taxes for the company's international consumer products segment | Component of Net Sales Change | Three Months Ended March 31, 2023 | |:---|:---|\ | Product volumes sold | 6.8% | | Pricing/Product mix | 4.8% | | Foreign exchange rate fluctuations | (4.1%) | | Net Sales increase | 7.5% | - Net sales increased by **$16.0 million** or **7.5%** to **$230.6 million** in Q1 2023, with sales growth (excluding foreign exchange) driven by BATISTE, VITAFUSION® and L'IL CRITTERS® gummy vitamins, FEMFRESH, GRAVOL, ARM & HAMMER® Liquid Detergent, and STERIMAR[163](index=163&type=chunk) - Income before income taxes decreased by **$0.7 million** to **$28.9 million**, impacted by higher manufacturing/commodity costs, SG&A, unfavorable foreign exchange, marketing, and interest expenses, partially offset by favorable price/mix and higher sales volumes[164](index=164&type=chunk) [Specialty Products ("SPD")](index=26&type=section&id=Specialty%20Products%20(%22SPD%22)) This section analyzes the net sales and income before income taxes for the Specialty Products Division | Component of Net Sales Change | Three Months Ended March 31, 2023 | |:---|:---|:---|\ | Product volumes sold | (7.5%) | | Pricing/Product mix | 1.6% | | Net Sales decrease | (5.9%) | - Net sales decreased by **$5.2 million** or **5.9%** to **$82.3 million** in Q1 2023, primarily due to competitive imports within the domestic dairy segment[165](index=165&type=chunk) - Income before income taxes decreased by **$4.7 million** to **$6.8 million**, due to higher SG&A, lower sales volumes, unfavorable manufacturing costs, and higher marketing expenses, partially offset by favorable price/product mix[147](index=147&type=chunk) [Corporate](index=26&type=section&id=Corporate) This section details the financial performance of the corporate segment, primarily consisting of equity in earnings from affiliates - Corporate segment income before income taxes was **$4.4 million** in Q1 2023, up from **$2.4 million** in Q1 2022, primarily from equity in earnings of affiliates (Armand and ArmaKleen)[148](index=148&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, borrowing capacity, and expected funding for operations and strategic initiatives - As of March 31, 2023, the Company had **$202.8 million** in cash and cash equivalents and approximately **$1,480.0 million** available through its Revolving Credit Facility and commercial paper program[149](index=149&type=chunk) - The Company expects cash from operations and current borrowing capacity to be sufficient to fund share repurchases, debt payments, dividends, and capital expenditures, including approximately **$250.0 million** for manufacturing capacity investments in 2023[184](index=184&type=chunk) - On February 1, 2023, the Board declared a **4% increase** in the regular quarterly dividend to **$0.2725 per share**, raising the annual payout from **$255.0 million** to approximately **$265.0 million**[151](index=151&type=chunk) [Cash Flow Analysis](index=27&type=section&id=Cash%20Flow%20Analysis) This section provides a detailed analysis of cash flows from operating, investing, and financing activities | Cash Flow Activity | March 31, 2023 ($M) | March 31, 2022 ($M) | |:---|:---|:---|\ | Net cash provided by operating activities | 273.1 | 152.8 | | Net cash used in investing activities | (29.6) | (15.7) | | Net cash used in financing activities | (311.7) | (202.6) | - Net cash provided by operating activities increased by **$120.3 million** to **$273.1 million** in Q1 2023, driven by improved working capital and increased cash earnings[170](index=170&type=chunk) | Cash Conversion Cycle Metric | March 31, 2023 | March 31, 2022 | Change | |:---|:---|:---|:---|\ | Days of sales outstanding in accounts receivable ("DSO") | 27 | 28 | (1) | | Days of inventory outstanding ("DIO") | 72 | 69 | 3 | | Days of accounts payable outstanding ("DPO") | 73 | 80 | 7 | | Cash conversion cycle | 26 | 17 | 9 | - Net cash used in investing activities was **$29.6 million** in Q1 2023, primarily for property, plant, and equipment additions (**$25.0 million**)[187](index=187&type=chunk) - Net cash used in financing activities was **$311.7 million** in Q1 2023, reflecting **$255.6 million** in net debt payments and **$66.3 million** in cash dividend payments, partially offset by **$10.2 million** from stock option exercises[172](index=172&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK](index=28&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURE%20ABOUT%20MARKET%20RISK) This section refers to the Company's Annual Report on Form 10-K for detailed quantitative and qualitative disclosures regarding market risks, including those related to interest rates, foreign exchange rates, and commodity prices - For detailed quantitative and qualitative disclosures about market risk, refer to Item 7A of Part II in the Company's Annual Report on Form 10-K[173](index=173&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=28&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting during the quarter [a) Evaluation of Disclosure Controls and Procedures](index=28&type=section&id=a)%20Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports on management's assessment of the effectiveness of the company's disclosure controls and procedures - The Company's management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2023, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[174](index=174&type=chunk) [b) Change in Internal Control over Financial Reporting](index=28&type=section&id=b)%20Change%20in%20Internal%20Control%20over%20Financial%20Reporting) This section discloses any material changes in the company's internal control over financial reporting during the quarter - There were no changes in the Company's internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[188](index=188&type=chunk) [CAUTIONARY NOTE ON FORWARD-LOOKING INFORMATION](index=28&type=section&id=CAUTIONARY%20NOTE%20ON%20FORWARD-LOOKING%20INFORMATION) This section provides a cautionary statement regarding forward-looking statements made in the report, highlighting that such statements are based on assumptions that may prove incorrect and are subject to various risks and uncertainties - Forward-looking statements are based on reasonable assumptions but may be incorrect due to risks, uncertainties, and other factors outside the Company's control[176](index=176&type=chunk)[189](index=189&type=chunk) - Key risk factors include market growth decline, impacts of the COVID-19 pandemic, regulatory changes, the Russia/Ukraine war, potential recessionary conditions, shifts in consumer behavior, raw material and energy price increases, supply chain disruptions, and higher interest rates[176](index=176&type=chunk)[189](index=189&type=chunk) - The Company undertakes no obligation to publicly update any forward-looking statements, except as required by federal securities laws[176](index=176&type=chunk) [PART II – OTHER INFORMATION](index=30&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section includes additional information not covered in Part I, such as risk factors, equity sales, and exhibits [ITEM 1A. RISK FACTORS](index=30&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section directs readers to the comprehensive discussion of risk factors in Item 1A of the Company's Annual Report on Form 10-K, which could materially affect the Company's business, financial condition, or future results - Readers should carefully consider the risk factors discussed in Item 1A, 'Risk Factors' in the Form 10-K, as they could materially affect the Company's business, financial condition, or future results[192](index=192&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=30&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section outlines the Company's share repurchase programs, including the 2021 Share Repurchase Program, and details the remaining availability under these programs - The 2021 Share Repurchase Program, authorized on October 28, 2021, allows for repurchases of up to **$1,000.0 million** in Common Stock and has no expiration[178](index=178&type=chunk) - This program did not modify the evergreen share repurchase program, authorized on January 29, 2014, for reducing dilution from incentive plan issuances[178](index=178&type=chunk) - As of March 31, 2023, **$729.7 million** of share repurchase availability remained under the 2021 Share Repurchase Program[194](index=194&type=chunk) [ITEM 6. EXHIBITS](index=31&type=section&id=ITEM%206.%20EXHIBITS) This section provides a comprehensive list of exhibits filed with the Form 10-Q, including corporate governance documents, compensation plans, certifications, and XBRL-related files | Exhibit Number | Description | |:---|:---|\ | (3.1) | Amended and Restated Certificate of Incorporation | | (3.2) | Amendment to the Company's Amended and Restated Certificate of Incorporation | | (3.3) | By-laws of the Company, amended and restated as of December 23, 2022 | | (10.1) | Form of Restricted Stock Unit Agreement | | (10.2) | Form of Performance Stock Unit Agreement | | (10.4) | Amended and Restated Compensation Plan for Directors, dated February 1, 2023 | | (31.1) | Certification of the Chief Executive Officer | | (31.2) | Certification of the Chief Financial Officer | | (32.1) | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 | | (32.2) | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 | | (101.INS) | Inline XBRL Instance Document | | (101.SCH) | Inline XBRL Taxonomy Extension Schema Document | | (101.CAL) | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | (101.DEF) | Inline XBRL Taxonomy Extension Definition Linkbase Document | | (101.LAB) | Inline XBRL Taxonomy Extension Label Linkbase Document | | (101.PRE) | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | (104) | Cover Page Interactive Data File | [SIGNATURES](index=32&type=section&id=SIGNATURES) This section contains the required signatures for the Form 10-Q report, certifying its submission on behalf of Church & Dwight Co., Inc. by its Executive Vice President and Chief Financial Officer, and Vice President and Controller - The report was signed on April 27, 2023, by Richard A. Dierker, Executive Vice President and Chief Financial Officer, and Joseph J. Longo, Vice President and Controller[182](index=182&type=chunk)[197](index=197&type=chunk)

For the fiscal year ended December 31, 2022 CHURCH & DWIGHT CO., INC. (Exact name of registrant as specified in its charter) Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $1 par value CHD New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required ...