Group 1: Market Overview - The cyclically adjusted price-earnings multiple (CAPE) is above 40 for only the second time in the past 25 years [1] - On the NYSE, 50 stocks hit new 52-week lows compared to 110 new 52-week highs, while on the Nasdaq, 347 stocks reached new 52-week highs, over three times the number of new lows [1] Group 2: Economic Outlook - Stocks are perceived as expensive, with a correction likely in the next 12 months, and the U.S. economy is not as strong as suggested by the White House [2] - An out-of-control stock market does not equate to a robust economy [2] Group 3: Company Analysis - Church & Dwight (CHD) - Church & Dwight (CHD) hit its 18th new 52-week low, with its stock down over 16% in the past 12 months [4] - The company is known for brands like Arm & Hammer, Oxi Clean, and Trojan [4] - Organic sales growth has significantly slowed, with Q2 2025 growth at only 0.1% and a 1.4% decline in U.S. organic sales, which represent 77% of total sales [5] Group 4: Financial Performance - CHD's gross margin in Q2 2025 was 43.0%, down 410 basis points year-over-year, and its operating margin was 17.5%, down 480 basis points [6] - The company expects net sales in 2025 to increase by just 1% at the midpoint of its guidance, with adjusted earnings per share projected to rise by the same amount [6] - CHD's current enterprise value-to-revenue multiple of 4.21x is the lowest since 2018, although it is not near its 25-year low of 1.04x [6]

Core Insights - Church & Dwight Co., Inc. (CHD) has a market cap of $21.1 billion and is recognized for its strong brand portfolio, including ARM & HAMMER, Trojan, and OxiClean, emphasizing innovation and quality [1] - The company is expected to report an adjusted EPS of $0.73 for fiscal Q3 2025, reflecting a 7.6% decrease from $0.79 in the same quarter last year, although it has a history of exceeding Wall Street estimates [2] - For fiscal 2025, analysts forecast an adjusted EPS of $3.46, slightly up from $3.44 in fiscal 2024, with a projected growth of 7.5% year-over-year to $3.72 in fiscal 2026 [3] Stock Performance - Over the past 52 weeks, Church & Dwight shares have declined by 16.3%, underperforming the S&P 500 Index's gain of 16.9% and the Consumer Staples Select Sector SPDR Fund's decline of 3.2% [4] - The stock saw a marginal recovery on August 1 after reporting stronger-than-expected Q2 2025 results, with an adjusted EPS of $0.94 and revenues of $1.51 billion, driven by international sales and e-commerce, which constituted 23% of consumer sales [5] Analyst Ratings - The consensus rating for CHD stock is "Moderate Buy," with 22 analysts covering the stock: nine recommend "Strong Buy," one "Moderate Buy," eight "Hold," and four "Strong Sell." The average price target is $98.44, indicating a potential upside of 14.6% from current levels [6]

Core Points - Church & Dwight Co., Inc. will webcast a discussion of its third quarter earnings results on October 31, 2025, at 10:00 a.m. ET [1] - The live audio webcast will be accessible to media and investors, with a replay option available [1] - Church & Dwight Co., Inc. is the leading U.S. producer of sodium bicarbonate, commonly known as baking soda, and has been in operation since 1846 [1]

Core Viewpoint - Investors are closely monitoring recession indicators following the first federal funds rate cut of the year, with a struggling housing market and labor market warnings suggesting a potential recession, despite rising stock prices [1] Group 1: Church & Dwight (CHD) - Church & Dwight Co. Inc. is recognized for its essential household and personal care brands, which may provide insulation from a potential recession due to their perceived necessity [2][3] - The company has a long history of dividend increases, with a yield of 1.36% and a conservative payout ratio of 55.66%, making it a potential source of stability during volatile periods [3] - CHD shares have declined over 10% year-to-date, attributed to tariff impacts, but analysts predict a recovery with an upside potential of over 14% [4] Group 2: Spire Inc. (SR) - Spire Inc. is a regional natural gas utility firm expanding through the acquisition of Piedmont Natural Gas, which is expected to add over 200,000 customers and contribute to an estimated 8% bottom-line increase in the coming year [5] - The company maintains low operational costs, growing by less than 1% year-to-date, which provides protection against inflation, alongside a dividend yield of 4.08% and a payout ratio of 67.12% [6] Group 3: Chemed Corp. (CHE) - Chemed Corp. operates in home services and healthcare, with its brands Roto-Rooter and Vitas Healthcare providing recession-resistant services [8] - The company faces challenges such as hospice care caps and rising insurance costs, which have pressured CHE shares to their lowest P/E level in over four years, presenting a potential buying opportunity for long-term strength [9]

Core Insights - Church & Dwight Co., Inc. (CHD) has a market capitalization of $22.2 billion and is a leading player in the household, personal care, and specialty products sectors, known for brands like ARM & HAMMER and Trojan [1][2] - The company operates across various segments including domestic, international, and specialty products, serving consumers through retail, e-commerce, and industrial distribution channels [2] Stock Performance - CHD shares have decreased by 21.7% from their 52-week high of $116.46 and have fallen over 6% in the past three months, underperforming the Consumer Staples Select Sector SPDR Fund (XLP), which declined by 1.9% during the same period [3][4] - Year-to-date, CHD stock is down 12.9%, while XLP has returned 1%. Over the past 52 weeks, CHD shares have decreased by 12.3%, compared to XLP's 5.4% drop [4] - The stock has been trading mostly below its 50-day and 200-day moving averages since early April [4] Recent Financial Performance - On August 1, CHD reported stronger-than-expected Q2 2025 results, with adjusted EPS of $0.94 and revenues of $1.51 billion, driven by strong Consumer International sales and e-commerce, which accounted for 23% of consumer sales [5] Competitive Landscape - Rival The Clorox Company (CLX) has underperformed CHD, with CLX stock down 24.4% year-to-date and 26.1% over the past 52 weeks [6] - Despite CHD's recent underperformance, analysts maintain a moderately optimistic outlook, with a consensus rating of "Moderate Buy" and a mean price target of $101.94, representing an 11.7% premium to current levels [6]

Core Insights - Church & Dwight Co., Inc. (CHD) is enhancing its market position through a strong brand portfolio, strategic pricing, and continuous innovation, benefiting from trusted consumer brands like Arm & Hammer and OxiClean [1][10] Brand and Product Development - The Batiste brand remains a leader in dry shampoo, with the introduction of Batiste Light expanding its product line. The Hero brand is also innovating with skincare patches, contributing to CHD's growth [2] - CHD is revitalizing its gummy vitamin offerings with new formulations and flavors, including Power Plus and sugar-free options, indicating a focus on innovation and brand enhancement [3] Acquisitions and Market Expansion - The acquisition of Touchland, a leading hand sanitizer brand, strengthens CHD's position in key product categories and adds to its portfolio of power brands [4] - CHD is expanding its international presence, with organic sales in the International segment increasing by 4.8% in Q2 2025, driven by higher volumes and strong brand demand [5][10] Financial Performance and Estimates - CHD's shares have decreased by 11.8% year-to-date, compared to a 4.4% decline in the industry [8] - The company trades at a forward price-to-earnings ratio of 25.43X, higher than the industry average of 19.86X [9] - The Zacks Consensus Estimate for CHD's earnings per share (EPS) indicates a year-over-year growth of 0.9% for 2025 and 7.6% for 2026, with stable EPS estimates over the past 30 days [11]

Group 1 - Grocery Outlet Holding Corp. (GO) has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision activity compared to Church & Dwight (CHD), which has a Zacks Rank of 3 (Hold) [3] - Value investors utilize various valuation metrics, including P/E ratio, P/S ratio, earnings yield, and cash flow per share, to assess whether a company is undervalued [4] - GO has a forward P/E ratio of 22.87, while CHD has a forward P/E of 27.22, suggesting that GO may be a more attractive investment based on this metric [5] Group 2 - GO's PEG ratio is 3.15, compared to CHD's PEG ratio of 3.90, indicating that GO may offer better value when considering expected earnings growth [5] - GO has a P/B ratio of 1.47, significantly lower than CHD's P/B of 5.24, further supporting the argument that GO is undervalued [6] - Based on the valuation metrics and improving earnings outlook, GO is considered the superior value option at this time [7]

Industry Overview - The Zacks Consumer Products – Staples industry is facing challenges due to rising living costs, which are straining household budgets and leading to cautious consumer spending, thereby impacting sales across the industry [1][5] - Companies are also dealing with increased raw material costs and elevated selling, general and administrative (SG&A) expenses, which are compressing profit margins [1][4] Demand and Strategic Responses - Despite the challenges, demand for essential consumer products remains favorable, with industry leaders like Procter & Gamble, Church & Dwight, Ollie's Bargain Outlet, and Grocery Outlet leveraging innovation, cost efficiency, and digital transformation to sustain growth [2][4] - Companies are pursuing restructuring initiatives and cost-cutting measures to enhance operational efficiency and maintain profitability in a demanding environment [4][7] Economic and Market Trends - The industry is experiencing heightened spending volatility due to an uncertain macroeconomic backdrop, with rising living costs and declining personal savings affecting consumer behavior, particularly among lower-income households [5] - Currency fluctuations pose a risk for many companies in the industry, particularly due to their exposure to international markets and the potential impact of a stronger U.S. dollar [6] Performance Metrics - The Zacks Consumer Products – Staples industry currently holds a Zacks Industry Rank of 163, placing it in the bottom 33% of over 245 Zacks industries, indicating dim near-term prospects [8][10] - Over the past six months, the industry has lost 4.5%, underperforming the broader Zacks Consumer Staples sector, which declined by 0.5%, while the S&P 500 Index advanced by 17.5% [12] Valuation Insights - The industry is trading at a forward 12-month price-to-earnings (P/E) ratio of 20.07X, compared to the S&P 500's 23.02X and the sector's 16.96X, reflecting a historical range of 18.96X to 23.38X over the past five years [15] Company Highlights - **Ollie's Bargain Outlet**: This company operates on a "buy cheap, sell cheap" model and has seen a 26.8% increase in shares over the past six months, with a consensus EPS estimate of $3.79 indicating a 15.6% year-over-year growth [18][19] - **Grocery Outlet**: Focused on improving store performance and enhancing site selection, the company has experienced a 43.2% share price increase in the past six months, with a current EPS estimate of 78 cents, reflecting a 1.3% growth from the previous year [21][22] - **Procter & Gamble**: The company has a current EPS estimate of $6.99, suggesting a 2.3% growth year-over-year, although shares have declined by 6.5% in the past six months [24] - **Church & Dwight**: With a focus on innovation and digital expansion, the company has a current EPS estimate of $3.47, indicating a 0.9% growth from the previous year, while shares have declined by 14.7% in the past six months [29]

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

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