Core Insights - Church & Dwight reported revenue of $1.47 billion for the quarter ended March 2025, a decrease of 2.4% year-over-year, and EPS of $0.91, down from $0.96 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $1.51 billion by 2.88%, while the EPS exceeded the consensus estimate of $0.89 by 2.25% [1] Financial Performance Metrics - Total Consumer Net Sales were $1.39 billion, below the average estimate of $1.43 billion, reflecting a year-over-year decline of 2% [4] - Consumer Domestic Net Sales amounted to $1.13 billion, compared to the estimated $1.17 billion, marking a 3% decrease year-over-year [4] - Consumer International Net Sales were reported at $261.90 million, slightly above the average estimate of $260.24 million, showing a year-over-year increase of 2.7% [4] - Specialty Products Division Net Sales were $75.40 million, below the average estimate of $80.55 million, representing a significant year-over-year decline of 9.3% [4] - Consumer Domestic Household Products Net Sales were $614.90 million, compared to the estimated $642.78 million, indicating a 3.8% decrease year-over-year [4] - Consumer Domestic Personal Care Products Net Sales were $514.90 million, below the average estimate of $528.28 million, reflecting a year-over-year decline of 2.2% [4] Stock Performance - Church & Dwight's shares have returned -8.3% over the past month, contrasting with the Zacks S&P 500 composite's -0.7% change [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - Adjusted EPS for Q1 was $0.91, down 5.2% from the prior year, slightly above the outlook of $0.90 [24][30] - Reported revenue decreased by 2.4%, and organic sales declined by 1.2% due to lower volume [24][30] - Adjusted gross margin was 45.1%, a decrease of 60 basis points year over year, impacted by commodity inflation and lower volume [25][30] Business Line Data and Key Metrics Changes - U.S. organic sales decreased by 3%, driven entirely by negative volume from retail destocking [9][30] - International business delivered sales growth of 2.7%, with organic sales increasing by 5.8% [18] - SPD organic sales increased by 3.2% due to higher price and product mix [19] Market Data and Key Metrics Changes - U.S. consumer spending continues to weaken, with category growth averaging around 1.5% in Q1, down from 2.5% in the second half of 2024 [10][20] - Retailer destocking negatively impacted organic sales by approximately 300 basis points [5][30] - The Gummy Vitamin category grew by 4.8%, but the company's consumption was down 19% [13] Company Strategy and Development Direction - The company is pursuing strategic alternatives for the FLAWLESS, Spin Brush, and WATERPIK showerhead businesses, which represent about 2% of total net sales [7] - The company expects to reduce tariff exposure by approximately 80% through portfolio decisions and supply chain actions [7][8] - Continued focus on innovation and marketing investment is expected to drive growth in core categories [17][20] Management's Comments on Operating Environment and Future Outlook - The company expects full-year organic growth outlook to be 0% to 2%, revised down from 3% to 4% due to weaker U.S. consumer conditions [29][30] - Management noted that despite a slowdown in category consumption, the brands are performing well, gaining both dollar and volume share [20][30] - The company does not foresee a catalyst for improvement in U.S. consumer spending in the near term [20] Other Important Information - Cash from operating activities for Q1 was $185.7 million, a decrease of $77.3 million compared to the previous year [28] - Capital expenditures for Q1 were $16.5 million, a decrease of $29.8 million from the prior year [28] - The company expects to take a charge in Q2 related to the strategic decisions regarding the divested businesses [7][31] Q&A Session Summary Question: Updated expectations for organic sales growth by segment - Management confirmed that international organic sales were about 6% in Q1, while SPD was about 3% [34] Question: Promotional backdrop for the quarter - Promotional activity in laundry was stable at 34%, with litter promotions around 17.8% [36][38] Question: Expectations for category growth and market share - Management indicated that categories are expected to grow around 1% to 1.5%, with the company aiming to grow slightly faster [46] Question: Tariff impact on earnings - The gross impact of tariffs is projected at $190 million, expected to reduce to around $40 million after strategic actions [52][54] Question: Vitamin business performance and expectations - Management is focused on innovation and marketing to improve the vitamin business, with results expected to be visible by July [58][60] Question: Confidence in retail inventory levels - Management expressed that the expectation for Q2 is similar to Q1, with no significant bounce back anticipated [98][128]

Financial Data and Key Metrics Changes - Organic sales decreased by 1.2%, falling short of the expected range of 0% to 2% growth, primarily due to retailer destocking which accounted for approximately 300 basis points of the decline [6][24] - Adjusted EPS was $0.91, slightly above the outlook of $0.90, but down 5.2% from the prior year [24][30] - Reported revenue declined by 2.4% [24] Business Line Data and Key Metrics Changes - In the U.S. business, organic sales declined by 3%, driven entirely by negative volume from retail destocking [10] - The Gummy Vitamin business negatively impacted organic growth, with consumption down 19% despite the category growing by 4.8% [14] - ARM and HAMMER liquid laundry detergent consumption grew by 3.4% against zero category growth, while unit dose consumption grew by 26.9% [12][13] - TheraBreath consumption grew by 26%, making it the number two mouthwash brand with a 20.3% share [17] Market Data and Key Metrics Changes - International business delivered sales growth of 2.7%, with organic sales increasing by 5.8% largely due to higher volume [19] - SPD organic sales increased by 3.2% due to a combination of higher price and product mix along with higher volume [19] Company Strategy and Development Direction - The company is pursuing strategic alternatives for the FLAWLESS, Spin Brush, and WATERPIK showerhead businesses, which generate $150 million in net sales, to sharpen focus on core brands and mitigate tariff exposure [8][20] - The full-year organic growth outlook has been revised to 0% to 2%, reflecting a weaker U.S. consumer and no expected recovery from Q1 retailer destocking [20][30] - The company is committed to maintaining marketing investments at 11% of net sales to drive brand share momentum [26][88] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer spending continues to weaken, with category growth declining from an average of 2.5% in the second half of 2024 to around 1.5% in Q1 2025 [10][11] - The company expects no bounce back from Q1 retailer destocking and anticipates continued challenges in the U.S. consumer environment [20][21] - Despite the slowdown, management expressed confidence in the strength of their brands and their ability to navigate the current environment [21][22] Other Important Information - The company expects to take a charge in Q2 related to the strategic decisions regarding the divested businesses, estimated at $140 million, with two-thirds expected to be non-cash [32] - Cash from operating activities was $185.7 million, a decrease of $77.3 million compared to the previous year [28] Q&A Session Summary Question: Updated expectations for organic sales growth by segment - Management confirmed that international organic sales were about 6% in Q1, while SPD was about 3%, with expectations for similar performance in Q2 [34][35] Question: Promotional backdrop for the quarter - Management indicated that promotional activity in laundry was stable, with 34% sold on deal, and litter promotions around 17.8% [36][38] Question: Category performance and market share growth - Management noted that categories are expected to grow around 1% to 1.5%, with trade down not yet significantly impacting performance [46] Question: Revenue call down versus tariffs impact - Management clarified that the gross impact of tariffs is projected at $190 million, which is expected to be mitigated through strategic actions [50][54] Question: Vitamin business performance and expectations - Management acknowledged that the vitamin business is not meeting expectations and emphasized the focus on innovation and marketing to drive growth [58][60] Question: Retailer destocking and inventory levels - Management expressed confidence that the current retail destocking is a result of consumer pullback and macroeconomic pressures, leading to a cautious outlook on restocking [116][118]

Company Performance - Church & Dwight (CHD) reported quarterly earnings of $0.91 per share, exceeding the Zacks Consensus Estimate of $0.89 per share, but down from $0.96 per share a year ago, representing an earnings surprise of 2.25% [1] - The company posted revenues of $1.47 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.88%, compared to year-ago revenues of $1.5 billion [2] - Over the last four quarters, Church & Dwight has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Outlook - Church & Dwight shares have declined approximately 5.1% since the beginning of the year, slightly outperforming the S&P 500's decline of 5.3% [3] - The current consensus EPS estimate for the coming quarter is $0.94 on revenues of $1.56 billion, and for the current fiscal year, it is $3.68 on revenues of $6.28 billion [7] Industry Context - The Consumer Products - Staples industry, to which Church & Dwight belongs, is currently ranked in the bottom 36% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Church & Dwight's stock performance [5]

CHURCH & DWIGHT CO., INC. News Release Contact: Lee McChesney Chief Financial Officer 609-806-1200 CHURCH & DWIGHT REPORTS FIRST QUARTER 2025 RESULTS Q1 EPS EXCEEDS OUTLOOK UPDATES FULL YEAR OUTLOOK | 2025 First Quarter Results | 2025 Full Year Outlook | | --- | --- | | • Net Sales -2.4%: Domestic -3.0%, Int'l +2.7%, SPD -9.3% | 2 • Organic Sales 0% to 2% | | • Organic sales -1.2%: Domestic -3.0%, Int'l +5.8%, SPD +3.2%¹ | 2 • Adjusted Gross Margin Contraction of 60 bps | | • Reported EPS $0.89, Adjusted EP ...

Group 1: Earnings Expectations - Church & Dwight (CHD) is expected to report quarterly earnings of $0.89 per share, reflecting a decline of 7.3% year-over-year [1] - Analysts forecast revenues of $1.51 billion, indicating a slight increase of 0.5% compared to the previous year [1] - The consensus EPS estimate has been revised 1.5% lower over the last 30 days, showing a reevaluation by analysts [1][2] Group 2: Sales Projections - Analysts predict 'Net sales- Total Consumer Net Sales' to reach $1.43 billion, representing a year-over-year change of +0.8% [4] - The estimate for 'Net sales- Consumer- Consumer Domestic' is $1.17 billion, suggesting a change of +0.5% year-over-year [4] - 'Net sales- Consumer- Consumer International' is projected at $260.24 million, indicating a +2.1% change year-over-year [4] Group 3: Specialty Products and Household Sales - The average prediction for 'Net sales- Specialty Products Division' is $80.55 million, reflecting a decline of -3.1% year-over-year [5] - 'Net sales- Consumer- Consumer Domestic - Household Products' is expected to reach $642.78 million, indicating a +0.6% change from the prior-year quarter [5] - 'Net sales- Consumer- Consumer Domestic - Personal Care Products' is projected at $528.28 million, suggesting a +0.4% change from the year-ago quarter [6] Group 4: Income Before Income Taxes - 'Income before Income Taxes- Specialty Products Division' is estimated at $10.66 million, slightly down from $10.80 million year-over-year [6] - 'Income before Income Taxes- Consumer International' is projected at $36.28 million, up from $33 million in the previous year [7] - The estimate for 'Income before Income Taxes- Consumer Domestic' is $248.41 million, compared to $239.20 million from the year-ago period [7] Group 5: Stock Performance - Over the past month, shares of Church & Dwight have returned -9.6%, contrasting with the Zacks S&P 500 composite's -0.2% change [7] - Currently, CHD holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the overall market in the near future [7]

Church & Dwight Co., Inc. (CHD) is likely to register top-line growth when it reports first-quarter 2025 earnings on May 1. The Zacks Consensus Estimate for revenues is pegged at $1.51 billion, suggesting an increase of 0.5% from the prior-year quarter.The consensus mark for first-quarter earnings has remained unchanged in the past 30 days at 89 cents per share, indicating a decline of 7.3% from the figure reported in the year-ago quarter. CHD has a trailing four-quarter earnings surprise of 9.6%, on averag ...

Core Viewpoint - Church & Dwight Co., Inc. (CHD) is currently overvalued with a forward 12-month price-to-earnings multiple of 28.23x, compared to the industry's average of 20x [1] Financial Performance - CHD's stock has increased by 1.6% over the past three months, while the industry has grown by 5% and the S&P 500 has declined by 3.7% [4] - Marketing expenses as a percentage of sales increased by 50 basis points in 2024, with expectations to exceed 11% of sales in 2025, potentially impacting near-term profitability [13] Business Strategy - Strong brand equity allows CHD to pass on cost increases to consumers with minimal demand impact, supporting profitability [6] - E-commerce is a significant growth driver, with online sales accounting for 21.4% of total revenues in Q4 2024, positioning CHD favorably in the digital space [7] - The company has a history of successful acquisitions, focusing on No. 1 or No. 2 brands with high margins, which reinforces its growth trajectory [8] - Over 50% of CHD's innovation pipeline is now focused on emerging categories, diversifying beyond traditional product lines [9] Challenges - CHD faces challenges from shifting consumer spending patterns, with management indicating that price increases are not currently feasible due to consumer exhaustion [12] - Rising marketing expenses and the inability to implement further price increases could pressure margins in the near term [14]

Sales and Revenue - In 2024, household products constituted approximately 55% of the Consumer Domestic sales and about 42% of the consolidated net sales[22]. - Personal care products represented approximately 45% of the Consumer Domestic sales and around 35% of the consolidated net sales in 2024[25]. - Total Consumer International net sales accounted for approximately 18% of the consolidated net sales in 2024, with no product line exceeding 20% of total international net sales[29]. - The Specialty Products Division accounted for approximately 5% of the consolidated net sales in 2024[32]. - Net sales of the MEGALAC business were $7.6 million in 2024, down from $38.1 million in 2023, following the exit from this segment[34]. - The Passport food safety business generated net sales of $6.4 million in 2024, compared to $13.0 million in 2023, prior to its sale in the second quarter of 2024[35]. - Walmart Inc. accounted for 23% of consolidated net sales in 2024, consistent with 2023 and down from 24% in 2022[55]. Acquisitions and Investments - The company acquired Graphico, Inc. for $19.9 million, net of cash acquired, and an additional $2.0 million for remaining minority shares in July 2024[20]. - The company has increased qualified dual sources of materials to approximately 60% of total spend on direct materials to enhance supply chain resilience[50]. - The cost of raw materials increased modestly in 2024 compared to 2023, which could materially impact financial results if costs cannot be passed to customers[51]. Market Competition and Distribution - The company competes with major brands such as Procter & Gamble, Colgate-Palmolive, and Unilever, which have greater financial resources[43]. - The company’s products are marketed through a broad distribution platform, including supermarkets, mass merchandisers, and e-commerce channels[45]. Regulatory Compliance - The company is subject to various regulations from agencies such as the FDA, EPA, and FTC, which govern product development, manufacturing, and marketing[56]. - The FDA's cGMP regulations apply to all facilities manufacturing OTC pharmaceutical products, with periodic audits to ensure compliance[67]. - The company markets over-the-counter pharmaceutical products that must conform to FDA monograph requirements, which include specific quality and labeling standards[65]. - Dietary supplements must comply with FDA regulations, including reporting serious adverse events associated with their use[74]. - New legislation may impose substantial regulatory requirements on dietary supplements, potentially affecting product formulation and market availability[75]. - The company’s products are subject to mandatory recalls under the Food Safety Modernization Act if certain conditions are met[69]. Employee and Community Engagement - As of December 31, 2024, the company had approximately 5,750 global employees, an increase of about 200 compared to December 31, 2023[86]. - The overall turnover rate for fiscal 2024 was approximately 15%, with revenue per employee at approximately $1.06 million[86]. - The company provided approximately $1.3 million in support to 237 community organizations through its Employee Giving Fund in 2024[95]. - The Church and Dwight Philanthropic Foundation awarded grants totaling approximately $1.3 million to eight organizations in 2024[96]. - Approximately 85% of the company's workforce is located in the Americas, 10% in Europe, Middle East, and Africa, and 5% in the Asia-Pacific region[86]. - The company launched several Employee Resource Groups (ERGs) in 2023 to promote diversity and inclusion[89]. - Employee safety and wellness remain top priorities, with policies in place to ensure compliance with OSHA standards[85]. - The company emphasizes a culture of diversity and inclusion to enhance long-term performance and innovation[87]. - The company invests in professional development and growth to improve employee performance and retention[92]. - The company offers competitive pay and a range of benefits, including health insurance and retirement plans, to attract and retain talent[93]. Environmental Sustainability - The company aims to minimize its environmental impact by focusing on renewable energy usage and reducing greenhouse gas emissions[79]. - The partnership with Tata Chemicals for soda ash supply enables the company to achieve economies of scale in sodium bicarbonate production[49]. - The company has adequate trona reserves to support sodium bicarbonate production for the foreseeable future[48]. - The company publishes an annual Sustainability Report detailing its ESG performance metrics and commitments, with the 2023 report available online[76].

Group 1 - The analyst assigned a hold rating to Church & Dwight Co. (NYSE: CHD) in November, citing that the stock was too expensive compared to its peers [1] - The investment approach focuses on identifying undervalued companies with long-term growth potential, emphasizing a blend of value investing principles [1] - The strategy involves purchasing quality companies at a discount to their intrinsic value and holding them for long-term compounding of earnings and shareholder returns [1]