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]

Company Overview - Church & Dwight Co., Inc. is hosting its 2025 Analyst Day, marking the 35th anniversary of its listing on the New York Stock Exchange [4]. Management Team - The event features a comprehensive management team, including Matt Farrell (Chairman, President, and CEO), Rick Dierker (CFO), and other key executives [2][3]. Event Details - The Analyst Day is attended by a significant number of participants, indicating strong interest in the company's future prospects [2].

Financial Data and Key Metrics Changes - For Q4 2024, the company reported 3.5% sales growth, exceeding the outlook of 1.5% to 2.5% [24] - Full-year net sales growth was 4%, with organic sales growth at 4.5%, domestic growth at 3.5%, international growth at 9%, and SPD growth at 7% [26] - Gross margin improved by 110 basis points, returning to 2019 levels, and EPS grew by almost 19% [25][26] - The company generated $1.16 billion in cash, with a free cash flow conversion rate of around 115% [27] Business Line Data and Key Metrics Changes - The company has seven power brands that account for 70% of revenues and profits, with five of these brands growing in 2024 [35] - The laundry business is growing at or above category averages, with market share increasing from 5% to 14.5% over 18 years [37] - The HERO brand saw a 40% growth in consumption, while THERABREATH also experienced over 40% growth [41][42] - VITAFUSION vitamins faced a decline but is expected to stabilize with new product launches [46][47] Market Data and Key Metrics Changes - The international business grew by 19%, with sub-markets growing almost 5% [97] - The company operates in over 100 countries, with significant growth opportunities in international markets [96][101] - The brand portfolio is performing well globally, with strong growth in markets like Japan and Canada [109] Company Strategy and Development Direction - The company aims for 8% organic growth in international markets, leveraging its power brands and expanding its portfolio [94][101] - Innovation is a key focus, with over 50% of the pipeline coming from new sources, and the company is transforming its approach to R&D [88][92] - The company is strict about acquisitions, targeting number one or two brands with gross margins at or above company levels [19][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future, citing strong performance across categories and a balanced portfolio [28][34] - The company is optimistic about household penetration opportunities in the U.S. and plans to continue investing in marketing and innovation [28][42] - The management highlighted the importance of e-commerce growth, which has increased from 2% to 21% [30] Other Important Information - The company has a long history of growth through acquisitions, with a focus on integrating and growing acquired brands [22][33] - The company is expanding its international presence, with rapid rollout plans for brands like HERO [105] - A new U.S. President and CFO are being hired to strengthen domestic operations [33] Q&A Session Summary Question: What is the outlook for the international business? - The international business is expected to continue growing at a fast pace, with a focus on leveraging power brands and expanding into new markets [94][101] Question: How is the company addressing the decline in VITAFUSION? - The company is launching a renovated portfolio and new products to revitalize the VITAFUSION brand, focusing on innovation and marketing support [46][47] Question: What are the key drivers of growth for the HERO brand? - HERO's growth is driven by strong consumption rates and increased distribution, with plans to invest further in marketing to enhance household penetration [41][42]

Core Insights - Church & Dwight Co., Inc. (CHD) reported strong fourth-quarter 2024 results, with both top and bottom lines increasing year over year, and sales exceeding the Zacks Consensus Estimate [1][4] Financial Performance - Adjusted earnings per share (EPS) for the quarter were 77 cents, aligning with the Zacks Consensus Estimate, representing an 18.5% year-over-year increase [3] - Net sales reached $1,582 million, a 3.5% increase year over year, surpassing the Zacks Consensus Estimate of $1,563 million [4] - Organic sales grew by 4.2%, driven by a 3% increase in volume, a favorable product mix, and pricing contributing 1.2% [4] Segment Performance - **Consumer Domestic**: Net sales increased by 2.7% to $1,225.7 million, with organic sales also up 2.7%, supported by strong performance in personal care and household products [7] - **Consumer International**: Net sales rose by 10.2% to $285.1 million, with organic sales increasing by 9.6%, driven by favorable pricing and higher volumes [8] - **Specialty Products**: Sales declined by 6.6% to $71.2 million, although organic sales grew by 10.3% due to higher prices and improved product mix [9] Cost and Margin Analysis - Gross margin expanded by 10 basis points to 44.7%, while adjusted gross margin remained flat at 44.6% year over year [5] - Marketing expenses decreased by $11.1 million year over year to $207.9 million, with adjusted SG&A expenses as a percentage of net sales decreasing by 40 basis points to 15.2% [6] Future Outlook - For 2025, the company anticipates reported sales growth of 2.5-3.5% and organic sales growth of 3-4%, driven by volume [12] - Management expects gross margin to expand by about 25 basis points year over year, with marketing expenses projected to exceed 11% of sales [13] - Adjusted EPS growth is expected to be 7-8%, with reported EPS anticipated to increase by 53-55% in 2025 [14] Dividend and Financial Health - The company announced a 4% dividend increase, raising the quarterly dividend to 29.5 cents per share, resulting in an annual payout of nearly $287 million [11] - As of the end of the quarter, cash and cash equivalents stood at $964.1 million, with long-term debt at $2,204.6 million [10]

Core Insights - Church & Dwight (CHD) reported $1.58 billion in revenue for Q4 2024, a year-over-year increase of 3.5% and a surprise of +1.22% over the Zacks Consensus Estimate of $1.56 billion [1] - The company's EPS for the same period was $0.77, compared to $0.65 a year ago, aligning with the consensus estimate [1] Revenue Performance - Total Consumer Net Sales reached $1.51 billion, exceeding the nine-analyst average estimate of $1.49 billion, reflecting a year-over-year change of +4.1% [4] - Consumer Domestic sales were $1.23 billion, slightly above the $1.22 billion estimate, marking a +2.7% change year-over-year [4] - Consumer International sales amounted to $285.10 million, surpassing the $273.57 million estimate, with a year-over-year increase of +10.2% [4] - Specialty Products Division sales were $71.20 million, below the $71.60 million estimate, showing a year-over-year decline of -6.6% [4] Segment Analysis - Consumer Domestic - Household Products generated $654.80 million, exceeding the $639.46 million estimate, with a year-over-year increase of +4.4% [4] - Consumer Domestic - Personal Care Products reported $570.90 million, slightly below the $577.65 million estimate, reflecting a +0.9% change year-over-year [4] Stock Performance - Church & Dwight shares returned +3.2% over the past month, outperforming the Zacks S&P 500 composite's +2.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Church & Dwight (CHD) reported quarterly earnings of $0.77 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.65 per share a year ago [1]. Financial Performance - The company posted revenues of $1.58 billion for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 1.22%, compared to $1.53 billion in the same quarter last year [2]. - Over the last four quarters, Church & Dwight has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2]. Stock Performance - Church & Dwight shares have increased approximately 2.3% since the beginning of the year, while the S&P 500 has gained 3.2% [3]. - The current status of estimate revisions for Church & Dwight is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]. Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.97 on revenues of $1.55 billion, and for the current fiscal year, it is $3.73 on revenues of $6.31 billion [7]. - The outlook for the Consumer Products - Staples industry, to which Church & Dwight belongs, is currently in the bottom 40% of over 250 Zacks industries, which may impact stock performance [8].

Financial Performance - Q4 2024 net sales increased by 3.5% to $1,582.0 million, exceeding the company's outlook of 1.5% to 2.5% growth[7] - Full year 2024 net sales grew by 4.1% to $6,107.1 million, surpassing the expected growth of approximately 3.5%[2] - Organic sales for Q4 2024 rose by 4.2%, driven by a 3.0% increase in volume and a 1.2% positive price and product mix[7] - Full year adjusted EPS for 2024 was $3.44, an increase of 8.5% compared to 2023, exceeding the company's outlook of 8%[6] - Basic net income per share for Q4 2024 was $0.77, compared to $0.63 in Q4 2023, representing a 22.2% increase[35] - Total consumer net sales for the twelve months ended December 31, 2024, reached $5,803.8 million, up 4.6% from $5,546.9 million in 2023[39] - Diluted earnings per share (EPS) for the quarter ended December 31, 2024, was $0.77, an 18.5% increase from $0.65 in the same quarter of 2023[52] Cash Flow and Liquidity - Cash from operations for 2024 was $1.156 billion, an increase of $125.6 million from the previous year[14] - Cash and equivalents increased significantly to $964.1 million in 2024 from $344.5 million in 2023, indicating improved liquidity[36] - Net cash from operating activities for the twelve months ended December 31, 2024, was $1,156.2 million, compared to $1,030.6 million in 2023, an increase of 12.2%[37] Dividends and Shareholder Returns - The company announced a 4% increase in the quarterly dividend, raising it from $0.28375 to $0.295 per share, resulting in an annual payout of approximately $287 million[15] - Dividends per share increased to $0.28 in Q4 2024 from $0.27 in Q4 2023, reflecting a growth of 3.7%[35] Future Outlook - In 2025, the company expects net sales growth of 3% to 4% and adjusted EPS growth of 7% to 8%[23][25] - The company forecasts reported sales growth of 1.0% for the quarter ending March 31, 2025, and 3.0% for the year ending December 31, 2025[53] - For the year ending December 31, 2025, reported diluted earnings per share is forecasted to be between $3.63 and $3.68, representing a 53% to 55% increase from $2.37 in 2024[54] - Adjusted diluted earnings per share (non-GAAP) for the year ending December 31, 2025 is projected to be between $3.72 and $3.68, reflecting a 7% to 8% increase from $3.44 in 2024[54] Operational Efficiency - The effective tax rate for Q4 2024 increased to 25.2%, compared to 21.3% in Q4 2023, primarily due to one-time non-recurring tax items[13] - Adjusted SG&A expenses for the quarter ended December 31, 2024, were $240.2 million, representing 15.2% of net sales, a decrease from 15.6% in the previous year[51] - The company is focusing on improving earnings through cost management and operational efficiencies[54] Product Development and Market Strategy - The company plans to launch several new products in 2025, including ARM & HAMMER POWER SHEETS™ and HERO™ Mighty Patch Body, aimed at driving significant sales growth[16][20] - Future growth strategies include potential market expansion and new product development initiatives[54] Asset and Liability Management - Total assets rose to $8,883.1 million in 2024, up from $8,569.2 million in 2023, marking a growth of 3.7%[36] - The company reported a total of $1,315.9 million in current liabilities for 2024, down from $1,422.0 million in 2023, a decrease of 7.5%[36] - Capital expenditures decreased to $179.8 million in 2024 from $223.5 million in 2023, a reduction of 19.6%[37] - The company expects capital expenditures of approximately $130 million in 2025, returning to historical levels[26] Sales Performance by Division - The specialty products division reported a decline in sales of 6.6% for the three months ended December 31, 2024, compared to the same period in 2023[39] - Consumer international sales for the twelve months ended December 31, 2024, increased by 9.8% to $1,071.5 million from $975.7 million in 2023[39] - Organic sales growth for the three months ended December 31, 2024, was 4.2%, with consumer international sales growing by 9.6%[49]