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

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

Core Insights - Church & Dwight Co., Inc. (CHD) reported second-quarter 2025 results with both net sales and earnings exceeding the Zacks Consensus Estimate, despite a year-over-year decline in net sales [1][9] - Adjusted earnings per share (EPS) for the quarter was 94 cents, surpassing the estimate of 85 cents and reflecting a 1% increase from the previous year [1][9] Financial Performance - Net sales totaled $1,506.3 million, a decrease of 0.3% year over year, but above the Zacks Consensus Estimate of $1,480 million [2] - Organic sales increased by 0.1%, driven by a 0.8% rise in volume, which was partially offset by a 0.7% decline in pricing and product mix [2][9] - Gross margin contracted by 410 basis points to 43%, with an adjusted gross margin of 45%, down 40 basis points year over year due to higher manufacturing costs and product mix issues [3][9] Segment Performance - Consumer Domestic segment net sales fell 1.4% to $1,154.1 million, with organic sales declining by 1% [5] - Consumer International segment saw a 5.3% increase in net sales to $277.6 million, with organic sales climbing 4.8% [6] - Specialty Products segment experienced a 3% decline in sales to $74.6 million, although organic sales grew by 0.1% [7] Financial Health - The company ended the quarter with cash and cash equivalents of $923.2 million and long-term debt of $2,205.8 million [8] - Cash from operations for the first half of 2025 was $416.5 million, with capital expenditures amounting to $39 million [8] Future Outlook - For 2025, CHD anticipates organic sales growth of around 0-2%, influenced by the Touchland acquisition and the impact of exiting certain businesses [11] - The company expects a full-year reported gross margin of 44%, with adjusted gross margin projected to contract by 60 basis points compared to 2024 [12] - Marketing expenses as a percentage of sales are expected to be approximately 11%, reflecting continued investment in brands and innovation [12][13]

Core Insights - Church & Dwight reported Q2 2025 earnings per share of $0.94 (Non-GAAP), exceeding analyst expectations of $0.86 and its own guidance of $0.85 adjusted EPS [1][5] - Net sales (GAAP) reached $1,506.3 million, surpassing estimates by $19.1 million but down 0.3% year-over-year [1][5] - The company faces challenges with gross margin tightening and underperformance in certain product categories, particularly vitamins [1][7] Financial Performance - Non-GAAP EPS for Q2 2025 was $0.94, a 1.1% increase from $0.93 in Q2 2024 [2] - GAAP revenue was $1,506.3 million, a slight decrease of 0.3% from $1,511.2 million in Q2 2024 [2] - Organic sales growth was minimal at 0.1%, with domestic organic sales declining by 1.0% while international sales grew by 4.8% [2][6] Business Strategy - The company focuses on "power brands" that contribute approximately 70% of net sales and profits, including laundry detergent and vitamins [3] - Recent strategies include acquisitions, international expansion, and optimizing brand mix, while also pruning underperforming businesses [4] - The vitamin segment is under review for potential restructuring or divestment due to ongoing underperformance [11] Market Dynamics - Five out of seven power brands gained market share, with HERO, ARM & HAMMER, and THERABREATH identified as key growth drivers [9] - The newly acquired Touchland brand has become the eighth power brand, contributing to growth [10] - E-commerce sales accounted for 23% of total consumer sales, up from 22% in Q2 2024 [10] Operational Challenges - Gross margin decreased to 45.0% (Non-GAAP), down 0.4 percentage points from the previous year, impacted by rising manufacturing costs and tariffs [2][7] - The company incurred approximately $51 million in pre-tax charges related to exits from underperforming businesses [8] - Cash from operations fell by $83.4 million to $416.5 million due to working capital changes and lower operating earnings [13] Future Outlook - For fiscal 2025, management expects net sales and organic sales growth in the range of 0% to 2%, with adjusted EPS also projected to rise by 0% to 2% [14] - Q3 2025 guidance anticipates reported and organic sales growth of 1% to 2%, but adjusted EPS is expected to decline to $0.72, a 9% decrease from the prior year [15] - Strategic decisions regarding the vitamin business are expected by the end of fiscal 2025 [15]

PART I – FINANCIAL INFORMATION [ITEM 1: FINANCIAL STATEMENTS](index=5&type=section&id=ITEM%201%3A%20FINANCIAL%20STATEMENTS) Unaudited condensed consolidated financial statements, including income, comprehensive income, balance sheets, cash flows, and equity, are presented with detailed notes [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The company's income statements show a decline in net sales, gross profit, and net income for both the three and six months ended June 30, 2025, compared to 2024 **Three Months Ended June 30, 2025 vs. 2024:** | Metric | 2025 (Millions) | 2024 (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :--------- | | Net Sales | $1,506.3 | $1,511.2 | -0.3% | | Gross Profit | $647.0 | $712.1 | -9.1% | | Income from Operations | $261.7 | $336.9 | -22.3% | | Net Income | $191.0 | $243.5 | -21.6% | | Diluted EPS | $0.78 | $0.99 | -21.2% | | Cash dividends per share | $0.30 | $0.28 | 7.1% | **Six Months Ended June 30, 2025 vs. 2024:** | Metric | 2025 (Millions) | 2024 (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :--------- | | Net Sales | $2,973.4 | $3,014.5 | -1.4% | | Gross Profit | $1,306.6 | $1,399.1 | -6.6% | | Income from Operations | $557.0 | $641.9 | -13.2% | | Net Income | $411.1 | $471.2 | -12.8% | | Diluted EPS | $1.66 | $1.91 | -13.1% | | Cash dividends per share | $0.59 | $0.57 | 3.5% | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income decreased for both the three and six-month periods, with foreign exchange translation adjustments showing a positive shift **Comprehensive Income (Millions):** | Period | 2025 | 2024 | | :------------------- | :----- | :----- | | Three Months Ended June 30 | $198.7 | $243.7 | | Six Months Ended June 30 | $423.6 | $469.3 | **Other Comprehensive Income (Loss) Components (Six Months Ended June 30, 2025 vs. 2024):** | Component | 2025 (Millions) | 2024 (Millions) | | :-------------------------------- | :-------------- | :-------------- | | Foreign exchange translation adjustments | $23.2 | $(6.3) | | Defined benefit plan adjustments gain | $0.4 | $(0.2) | | Income (loss) from derivative agreements | $(11.1) | $4.6 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a slight decrease in total assets and liabilities, while total stockholders' equity increased from December 2024 to June 2025 **Balance Sheet Highlights (Millions):** | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Total Current Assets | $2,229.8 | $2,240.6 | | Total Assets | $8,788.2 | $8,883.1 | | Total Current Liabilities | $1,208.6 | $1,315.9 | | Total Liabilities | $4,394.5 | $4,522.3 | | Total Stockholders' Equity | $4,393.7 | $4,360.8 | [Condensed Consolidated Statements of Cash Flow](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) Net cash provided by operating activities decreased, while net cash used in investing activities also decreased, and net cash used in financing activities increased significantly **Cash Flow Summary (Six Months Ended June 30, Millions):** | Activity | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Net Cash Provided By Operating Activities | $416.5 | $499.9 | | Net Cash Used In Investing Activities | $(39.6) | $(91.5) | | Net Cash Used In Financing Activities | $(426.8) | $(257.4) | | Net Change In Cash and Cash Equivalents | $(40.9) | $147.2 | | Cash and Cash Equivalents at End of Period | $923.2 | $491.7 | - Cash paid for interest (net of capitalized amounts) was **$46.6 million** in 2025 and **$48.2 million** in 2024. Income taxes paid were **$146.7 million** in 2025 and **$140.0 million** in 2024[15](index=15&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity increased from January 1, 2025, to June 30, 2025, influenced by net income, cash dividends, stock purchases, and other comprehensive income adjustments **Stockholders' Equity Changes (Millions):** | Metric | January 1, 2025 | June 30, 2025 | | :-------------------------------- | :-------------- | :------------ | | Total Stockholders' Equity | $4,360.8 | $4,393.7 | | Net income | $220.1 (Q1) / $191.0 (Q2) | | | Cash dividends | $(72.4) (Q1) / $(72.6) (Q2) | | | Stock purchases | | $(300.0) | | Accumulated Other Comprehensive Income (Loss) | $(30.9) | $(18.4) | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Basis of Presentation](index=10&type=section&id=1.%20Basis%20of%20Presentation) Unaudited financial statements, including normal adjustments and R&D in SG&A, should be read with the 2024 10-K - Research and development expenses were **$35.8 million** for Q2 2025 (vs. **$33.0 million** in Q2 2024) and **$68.6 million** for the first six months of 2025 (vs. **$63.1 million** in 2024)[21](index=21&type=chunk) [2. New Accounting Pronouncements](index=10&type=section&id=2.%20New%20Accounting%20Pronouncements) ASU 2023-07 (Segment Reporting) was adopted retrospectively; other ASUs on income taxes and expense disaggregation are being evaluated - ASU 2023-07, Segment Reporting, was adopted retrospectively for fiscal years beginning after December 15, 2023, leading to enhanced disclosures about significant segment expenses[22](index=22&type=chunk) - ASU 2023-09 (Income Taxes) and ASU 2024-03/2025-01 (Expense Disaggregation Disclosures) are not yet adopted, and the Company is evaluating their potential impact[23](index=23&type=chunk)[24](index=24&type=chunk) [3. Inventories](index=11&type=section&id=3.%20Inventories) Inventory balances slightly increased from December 2024 to June 2025, primarily due to higher finished goods **Inventories (Millions):** | Category | June 30, 2025 | December 31, 2024 | | :-------------------- | :-------------- | :---------------- | | Raw materials and supplies | $134.8 | $140.4 | | Work in process | $40.2 | $45.4 | | Finished goods | $447.4 | $427.5 | | **Total** | **$622.4** | **$613.3** | [4. Property, Plant and Equipment, Net ("PP&E")](index=11&type=section&id=4.%20Property%2C%20Plant%20and%20Equipment%2C%20Net%20(%22PP%26E%22)) Net PP&E slightly decreased, while depreciation expense increased year-over-year for both periods **Net PP&E (Millions):** | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :-------------- | :---------------- | | Gross PP&E | $1,867.9 | $1,851.8 | | Less accumulated depreciation | $944.4 | $920.1 | | **Net PP&E** | **$923.5** | **$931.7** | **Depreciation Expense on PP&E (Millions):** | Period | 2025 | 2024 | | :-------------------- | :----- | :----- | | Three Months Ended June 30 | $22.5 | $20.4 | | Six Months Ended June 30 | $45.1 | $38.8 | - An impairment charge of **$60.0 million** related to Construction in progress assets was recorded in SG&A in the Consumer Domestic segment during Q3

Financial Data and Key Metrics Changes - Organic sales grew by 0.1%, exceeding the outlook of -2% to flat [4][22] - Adjusted EPS was $0.94, which was $0.09 higher than the $0.85 outlook [5][22] - Adjusted gross margin decreased by 40 basis points to 45% [4][22] - Reported revenue was down 0.3% [22] Business Line Data and Key Metrics Changes - U.S. Consumer business organic sales declined by 1%, with volume growth offset by negative price mix [11] - ARM and HAMMER liquid laundry detergent consumption grew by 3.2%, outpacing the category growth of 1.3% [12] - ARM and HAMMER Litter consumption grew by 3.4%, while the category was up 4.1% [13] - TheraBreath consumption grew by 22.5%, despite the mouthwash category being down [14] - HERO outpaced the acne category with consumption growth of 11.4% compared to 1.5% category growth [15] - International business delivered sales growth of 5.3%, with organic growth of 4.8% [17] Market Data and Key Metrics Changes - Online sales as a percentage of global sales reached 23% [7] - Category consumption for the largest categories finished around 2.5% in Q2 [5] - Consumer confidence levels have started to recover after hitting a twelve-year low [6] Company Strategy and Development Direction - The company is focused on a balanced portfolio of value and premium products, with a strong emphasis on innovation [6][7] - Strategic actions include exiting the FLAWLESS, Spin Brush, and WATERPIK showerhead businesses [8] - The company is undertaking a strategic review of its vitamin business, exploring options for divestiture or joint ventures [10][36] Management's Comments on Operating Environment and Future Outlook - The macro environment remains volatile and uncertain, but the company is confident in achieving its full-year organic outlook of 0% to 2% [6][19] - Management noted that category consumption is looking better than three months ago, with brands gaining both dollar and volume share [19][20] - The company expects continued innovation to drive growth in the back half of the year [19][68] Other Important Information - The company closed the acquisition of Touchland, which is experiencing strong growth [7][49] - Cash from operating activities for the first six months was $416.5 million, a decrease of $83 million from last year [25] - The company executed a $300 million share repurchase [25] Q&A Session Summary Question: Can you provide context on the strategic review of the vitamin business? - Management outlined three options: divestiture, joint venture, or restructuring the business for profitability [34][36] Question: What is driving the good consumption trends in the laundry business? - The company is seeing market share performance due to effective pricing and sizing strategies [39][40] Question: Can you quantify the impact of retailer destocking? - The destocking was around a 100 basis point drag in Q2, down from 300 basis points in Q1 [44][45] Question: What are the priorities for the Touchland business post-acquisition? - Touchland is focused on driving category growth and expanding household penetration [49][50] Question: How does the company view the promotional environment? - The promotional landscape is mixed, with litter promotions spiking while laundry promotions remain consistent [82][85] Question: What is the outlook for gross margins? - Gross margins are expected to contract by 60 basis points due to tariffs and inflation, but productivity efforts are ongoing [27][89]

Financial Data and Key Metrics Changes - Organic sales grew by 0.1%, exceeding the outlook of -2% to flat [4][23] - Adjusted EPS was $0.94, which was $0.09 higher than the $0.85 outlook [5][23] - Adjusted gross margin decreased by 40 basis points to 45% [4][23] - Reported revenue was down 0.3% [23] Business Line Data and Key Metrics Changes - U.S. Consumer business organic sales declined by 1%, with volume growth offset by negative price mix [11] - ARM and HAMMER liquid laundry detergent consumption grew by 3.2%, while the category grew by 1.3% [12] - TheraBreath consumption grew by 22.5%, maintaining a 21% share in the mouthwash category [14] - International business delivered sales growth of 5.3%, with organic sales increasing by 4.8% [17] Market Data and Key Metrics Changes - Category consumption for the largest categories finished around 2.5% in Q2 [6] - Online sales as a percentage of global sales reached 23% [7] - The gummy vitamin category grew almost 4%, marking the third consecutive quarter of growth [10] Company Strategy and Development Direction - The company is focused on a balanced portfolio of value and premium products, emphasizing innovation [6][8] - Strategic actions include exiting the FLAWLESS, Spin Brush, and WATERPIK showerhead businesses [8] - The company is undertaking a strategic review of its vitamin business, exploring divestiture options and potential partnerships [10][122] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer confidence has started to recover after hitting a twelve-year low [6] - The macro environment remains volatile, with uncertainty around the U.S. Consumer and global economy [18] - The full-year organic growth outlook remains at 0% to 2%, reflecting a balanced view of the macro environment [27] Other Important Information - The company closed the acquisition of Touchland, which is the fastest-growing brand in the hand sanitizer category in the U.S. [7] - Cash from operating activities for the first six months was $416.5 million, a decrease of $83 million compared to last year [26] - The company executed a $300 million share repurchase through an accelerated share repurchase program [26] Q&A Session Summary Question: Can you provide context on the strategic review of the vitamin business? - Management outlined three options: divestiture, joint venture, or shrinking the business for profitability [38][122] Question: What is driving the good consumption trends in the laundry business? - The company highlighted effective pricing strategies and consumer trading up to larger sizes [44] Question: Can you quantify the impact of retailer destocking? - Management estimated a 100 basis point drag in Q2, down from 300 basis points in Q1 [49] Question: What are the priorities for the Touchland business post-acquisition? - Focus on driving category growth, increasing household penetration, and launching new products [52][54] Question: How does the company view the promotional environment? - The promotional landscape is mixed, with litter category promotions spiking above historical averages while laundry promotions remain consistent [88] Question: What is the outlook for gross margins? - Gross margin is expected to contract by 60 basis points due to elevated input costs and tariffs [28][92]

Church & Dwight (CHD) came out with quarterly earnings of $0.94 per share, beating the Zacks Consensus Estimate of $0.85 per share. This compares to earnings of $0.93 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +10.59%. A quarter ago, it was expected that this maker of household and personal products would post earnings of $0.89 per share when it actually produced earnings of $0.91, delivering a surprise of +2.25%.Over the ...

CHURCH & DWIGHT CO., INC. News Release Reported EPS was $0.78 and Adjusted EPS was $0.94, an increase of 1%. Adjusted EPS exceeded the Company's outlook of $0.85 driven by higher than expected organic sales and profit margin. The difference between reported EPS and Adjusted EPS was primarily due to charges we recorded related to our announced business exits. Rick Dierker, Chief Executive Officer, commented, "Our brands continue to perform well in this dynamic environment. We continue to drive both dollar an ...

Core Insights - Zacks Premium offers tools for investors to enhance their stock market engagement and confidence through daily updates, research reports, and stock screens [1] Zacks Style Scores - Zacks Style Scores provide ratings for stocks based on value, growth, and momentum characteristics, aiding investors in selecting securities likely to outperform the market in the short term [2][3] - Stocks are rated from A to F, with A indicating the highest potential for outperformance [3] Value Score - The Value Style Score focuses on identifying undervalued stocks by analyzing financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [4] Growth Score - The Growth Style Score evaluates stocks based on projected and historical earnings, sales, and cash flow to identify those with sustainable growth potential [5] Momentum Score - The Momentum Style Score assesses stocks based on price trends and earnings estimate changes, helping investors capitalize on upward or downward price movements [6] VGM Score - The VGM Score combines the Value, Growth, and Momentum Scores to identify stocks with the best overall characteristics for investment [7] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in building successful portfolios, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.75% since 1988 [8][9] - There are over 800 stocks rated 1 or 2, making it essential for investors to utilize Style Scores to narrow down choices [8] Stock to Watch: Church & Dwight (CHD) - Church & Dwight Co., Inc. is a leading producer of sodium bicarbonate and offers a range of household and personal care products [11] - Currently rated 3 (Hold) with a VGM Score of B, CHD has a Growth Style Score of A, indicating a forecasted year-over-year earnings growth of 1.2% for the current fiscal year [12] - Recent earnings estimates for fiscal 2025 have been revised upward, with the Zacks Consensus Estimate at $3.48 per share and an average earnings surprise of +7.3% [12]