GK Hart/Vikki Hart Church & Dwight Co. (NYSE:CHD), Inc. develops, manufactures, and markets household, personal care, and specialty products. It operates in three segments: Consumer Domestic, Consumer International, and Specialty Products Division. VAL Church & Dwight Co Inc (CHD) Price % Change SPDR® S&P 500® ETF Trust (SPY) Price % Change 5.76% 14.24% 16.00% 0.00% -8.00% Mar "24 May '24 Jul '24 Jan '24 Seeking AlphaQ Aug 2, 2024, 8:03 AM EDT Powered by YC H A R T S Data by Y Charts So far this year, CHD's ...

For the quarter ended June 2024, Church & Dwight (CHD) reported revenue of $1.51 billion, up 3.9% over the same period last year. EPS came in at $0.93, compared to $0.92 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $1.51 billion, representing a surprise of +0.21%. The company delivered an EPS surprise of +10.71%, with the consensus EPS estimate being $0.84. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Stree ...

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I) This section presents the company's financial statements, management's discussion and analysis, and disclosures on market risk and internal controls [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company reported strong Q2 and H1 2024 financial growth, with increased net sales, gross profit, and diluted EPS, supported by a robust balance sheet Q2 & H1 2024 Key Financial Performance (in millions, except per share data) | Metric | Q2 2024 | Q2 2023 | % Change | H1 2024 | H1 2023 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $1,511.2 | $1,454.2 | 3.9% | $3,014.5 | $2,884.0 | 4.5% | | **Gross Profit** | $712.1 | $638.9 | 11.5% | $1,399.1 | $1,260.9 | 11.0% | | **Income from Operations** | $336.9 | $293.6 | 14.7% | $641.9 | $585.5 | 9.6% | | **Net Income** | $243.5 | $221.2 | 10.1% | $471.2 | $424.4 | 11.0% | | **Diluted EPS** | $0.99 | $0.89 | 11.2% | $1.91 | $1.72 | 11.0% | Balance Sheet Summary (in millions) | Account | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $1,755.2 | $1,529.7 | | **Total Assets** | $8,762.1 | $8,569.2 | | **Total Current Liabilities** | $1,149.7 | $1,422.0 | | **Total Liabilities** | $4,456.6 | $4,713.8 | | **Total Stockholders' Equity** | $4,305.5 | $3,855.4 | Cash Flow Summary - Six Months Ended June 30 (in millions) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | **Net Cash Provided By Operating Activities** | $499.9 | $509.2 | | **Net Cash Used In Investing Activities** | $(91.5) | $(69.2) | | **Net Cash Provided By (Used In) Financing Activities** | $(257.4) | $(315.4) | | **Net Change In Cash and Cash Equivalents** | $147.2 | $126.6 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail key accounting policies, including the Graphico, Inc. acquisition, potential impairment risks for VITAFUSION/LIL' CRITTERS and WATERPIK, and segment performance - On June 3, 2024, the Company acquired Graphico, Inc., a Japan-based distributor, for **$19.9 million** net of cash[34](index=34&type=chunk) - The VITAFUSION and LIL' CRITTERS trade name, with a carrying value of **$281.3 million**, is susceptible to future impairment risk due to continued market share decline, significant competition, and reduced shelf space[42](index=42&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) - The global WATERPIK business has experienced a significant decline in customer demand due to lower discretionary spending and a shift to value-branded products, eroding the excess fair value over its carrying value of **$644.7 million** and making it susceptible to impairment[46](index=46&type=chunk)[47](index=47&type=chunk) Segment Net Sales & Income Before Taxes - H1 2024 vs H1 2023 (in millions) | Segment | H1 2024 Net Sales | H1 2023 Net Sales | H1 2024 Income | H1 2023 Income | | :--- | :--- | :--- | :--- | :--- | | **Consumer Domestic** | $2,335.8 | $2,245.1 | $512.4 | $459.4 | | **Consumer International** | $518.7 | $472.5 | $65.9 | $56.4 | | **SPD** | $160.0 | $166.4 | $22.1 | $16.0 | | **Corporate** | $0.0 | $0.0 | $4.2 | $6.4 | | **Total** | **$3,014.5** | **$2,884.0** | **$604.6** | **$538.2** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q2 net sales growth to volume and price/mix, with gross margin expanding significantly due to a tariff ruling and productivity, while maintaining strong liquidity and executing strategic transactions Consolidated Results Summary - Q2 2024 vs Q2 2023 | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $1,511.2M | $1,454.2M | +3.9% | | **Gross Margin** | 47.1% | 43.9% | +320 bps | | **Operating Margin** | 22.3% | 20.2% | +210 bps | | **Diluted EPS** | $0.99 | $0.89 | +11.2% | - A favorable tariff ruling from the U.S. government related to certain products imported from China resulted in a **$26.1 million** reduction in Cost of Goods Sold during the second quarter of 2024, contributing **180 basis points** to the gross margin increase[70](index=70&type=chunk)[76](index=76&type=chunk) - The company completed several strategic transactions in 2024: acquired Graphico, Inc. to expand in the APAC region, exited the MEGALAC supplement portion of its Animal Nutrition business, and sold its Passport food safety business[69](index=69&type=chunk) - As of June 30, 2024, the company had strong liquidity with **$491.7 million** in cash and approximately **$1.495 billion** available through its Revolving Credit Facility and commercial paper program[92](index=92&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Consolidated Q2 2024 net sales increased 3.9% driven by volume and price/mix, with gross margin expanding significantly due to a tariff ruling and productivity, alongside increased marketing and SG&A expenses Components of Net Sales Increase - Q2 2024 | Component | Contribution | | :--- | :--- | | Product volumes sold | 3.5% | | Pricing/Product mix | 1.2% | | Foreign exchange rate fluctuations | (0.1%) | | Exit of product lines (net of acquisition) | (0.7%) | | **Net Sales increase** | **3.9%** | - Q2 2024 gross margin increased by **320 basis points**, driven by a favorable tariff ruling (**180 bps**), productivity programs (**120 bps**), and favorable price/mix/volume (**80 bps**), partially offset by higher manufacturing costs (**50 bps**)[76](index=76&type=chunk) - Marketing expenses increased by **15.3%** to **$152.4 million** in Q2 2024, primarily to support new product introductions[77](index=77&type=chunk) [Segment Results](index=38&type=section&id=Segment%20results) Q2 2024 saw Consumer Domestic and International sales growth, while Specialty Products (SPD) sales decreased due to divestitures, though showing growth excluding these impacts - Consumer Domestic Q2 net sales increased **3.8%**, driven by strong performance from THERABREATH®, HERO® acne products, and ARM & HAMMER® Cat Litter, partially offset by declines in VITAFUSION® supplements and WATERPIK® Shower Heads[83](index=83&type=chunk) - Consumer International Q2 net sales grew **9.0%**, with a **4.6%** increase in volume and **4.7%** from price/mix[85](index=85&type=chunk)[86](index=86&type=chunk) - SPD Q2 net sales decreased **8.6%**, primarily due to a **12.5%** negative impact from exiting the MEGALAC and Passport businesses[89](index=89&type=chunk)[90](index=90&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with substantial cash and credit facility availability, repaid a term loan, increased its quarterly dividend, and expects operating cash flow to fund future needs - The company has a **$1.5 billion** unsecured revolving credit facility and a corresponding commercial paper program, with approximately **$1.495 billion** available as of June 30, 2024[92](index=92&type=chunk) - No stock was repurchased under the 2021 Share Repurchase Program in 2024, leaving **$658.9 million** available for repurchase[94](index=94&type=chunk) - The Board declared a **4%** increase in the quarterly dividend to **$0.28375 per share**, effective in Q1 2024[95](index=95&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the company's Annual Report on Form 10-K for detailed quantitative and qualitative disclosures regarding market risk - For information regarding market risk, the company directs investors to Item 7A of Part II in its Form 10-K[99](index=99&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2024 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by this report[100](index=100&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[101](index=101&type=chunk) [PART II - OTHER INFORMATION](index=48&type=section&id=PART%20II) This section covers legal proceedings, risk factors, equity sales, other disclosures, and a list of exhibits [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions and government proceedings in the ordinary course of business, with uncertain outcomes - The Company is subject to various pending or threatened legal actions and proceedings in the ordinary course of business, the outcomes of which are subject to many uncertainties[104](index=104&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors discussed in Item 1A of the company's Annual Report on Form 10-K, which could materially affect the company's business - The report directs readers to the 'Risk Factors' section in the company's Form 10-K for a detailed discussion of factors that could materially affect the business[105](index=105&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2024, the company did not repurchase any shares of its Common Stock, leaving $658.9 million available under the 2021 Share Repurchase Program - No shares of Common Stock were repurchased during Q2 2024 as part of the company's publicly announced plans[106](index=106&type=chunk)[107](index=107&type=chunk) - As of June 30, 2024, the company has **$658.9 million** remaining under its 2021 Share Repurchase Program authorization[106](index=106&type=chunk) [Other Information](index=50&type=section&id=Item%205.%20Other%20Information) During the three months ended June 30, 2024, none of the company's directors or executive officers adopted or terminated a Rule 10b5-1 trading plan - No directors or executive officers adopted or terminated any Rule 10b5-1 securities trading plans during the second quarter of 2024[108](index=108&type=chunk) [Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section provides an index of the exhibits filed with the Form 10-Q, including corporate governance documents and certifications - The Exhibit Index lists all documents filed with the report, such as the Certificate of Incorporation, By-laws, and CEO/CFO certifications[109](index=109&type=chunk)

Financial Data and Key Metrics Changes - Reported sales growth was 3.9%, exceeding the outlook of 3.5% due to strong results across domestic, international, and Specialty Products [3][4] - Organic sales grew 4.7%, surpassing the 4% Q2 outlook, with volume contributing 3.5% to growth [3][4] - Adjusted EPS was $0.93, which was $0.10 higher than the $0.83 outlook, driven by higher-than-expected sales growth and gross margin expansion [4][15] - Adjusted gross margin expanded by 150 basis points, with a reported gross margin of 47.1%, reflecting a one-time benefit from historical tariff payments [4][16] Business Line Data and Key Metrics Changes - U.S. consumer business saw 3.8% organic sales growth, with volume growth of 3.3%, marking the fourth consecutive quarter of volume growth [5][13] - The laundry detergent category, particularly ARM & HAMMER, outperformed with a consumption growth of 1.6% and achieved a record market share of 14.8% [6][7] - The gummy vitamins business continued to decline, with a 10.9% drop in consumption, despite a slight improvement in the overall category decline [9] - BATISTE experienced strong consumption growth of 14.5%, increasing its market share to 47% [10] Market Data and Key Metrics Changes - International business delivered organic growth of 9.3%, driven by strong performance in Canada, Mexico, and Germany [14] - Specialty Products saw organic sales increase by 3.9%, achieving two consecutive quarters of solid growth [14] Company Strategy and Development Direction - The company is focused on innovation, with new product launches contributing significantly to growth, particularly in the laundry detergent and personal care categories [6][10] - Management indicated a balanced portfolio of value and premium offerings is well-suited to changing consumer buying patterns [13] - The company is tightening its organic revenue outlook to approximately 4%, reflecting a moderation in consumption growth [19] Management's Comments on Operating Environment and Future Outlook - Management noted a slowdown in consumption growth in June and July, with expectations for slower category growth in the second half of the year [13][24] - The company remains optimistic about its brand strength and innovation capabilities to navigate the challenging environment [24][28] - Management expects full-year adjusted EPS growth in the range of 8% to 9%, now at the low end of the range due to increased SG&A expenses [19][20] Other Important Information - The company is actively exploring M&A opportunities, with cash building up on the balance sheet [63] - WATERPIK consumption is up high single to low double digits, indicating recovery from previous inventory issues [64] Q&A Session Summary Question: Insights on promotional backdrop and expectations for the year - Management noted a decrease in promotional activity in liquid laundry detergent, while litter saw an increase in promotional spending driven by competitors [21][22] Question: Clarification on the slowdown in June and July - Management indicated that the slowdown is broad-based across categories, with consumers becoming more price-conscious [24][30] Question: Discussion on dry powder for additional spending - Management confirmed that dry powder is reserved for potential promotional needs in household categories and vitamins if necessary [27][28] Question: Organic growth guidance and potential downside risks - Management acknowledged that the guidance assumes continued pressure on underlying category growth, with a focus on gaining market share [34][35] Question: Performance of THERABREATH and HERO brands - Management expressed confidence in THERABREATH's growth potential despite being a higher-priced product, while HERO continues to lead in the acne category [49][52] Question: Update on VMS segment and capacity changes - Management highlighted the competitive nature of the VMS category and ongoing efforts to innovate and improve consumer experience [58][59]

Core Viewpoint - Church & Dwight Co., Inc. (CHD) reported strong second-quarter 2024 results, with both earnings and net sales increasing year over year, driven by robust consumer demand across its portfolio [1] Financial Performance - Adjusted earnings were 93 cents per share, exceeding the Zacks Consensus Estimate of 84 cents, reflecting a 1.1% year-over-year increase [3] - Net sales reached $1,511.2 million, a 3.9% year-over-year increase, surpassing the Zacks Consensus Estimate of $1,508 million [4] - Organic sales grew by 4.7%, supported by a volume increase of 3.5% and a favorable product mix and pricing of 1.2% [4] Margin and Expenses - Gross margin expanded by 320 basis points to 47.1%, aided by a one-time benefit from a favorable tariff ruling [5] - Adjusted gross margin was 45.4%, up 150 basis points, driven by enhanced productivity and higher volume despite increased manufacturing costs [5] - Marketing expenses rose by $20.2 million year over year to $152.4 million, representing 10.1% of net sales, an increase of 100 basis points [6] Segment Performance - Consumer Domestic segment net sales increased by 3.8% to $1,170.6 million, driven by household and personal care sales growth [7] - Consumer International segment net sales rose by 9% to $263.7 million, with organic sales up 9.3% [8] - Specialty Products segment sales declined by 8.6% to $76.9 million, impacted by the winding down of the Megalac business [9] Future Guidance - The company adjusted its organic revenue growth forecast to about 4%, down from the previous range of 4-5% for 2024 [11] - Reported sales growth is projected to be around 3.5%, influenced by divestitures and adverse currency fluctuations [11] - Full-year adjusted gross margin expansion is now expected to be approximately 100-110 basis points, an increase from the previously expected 75 basis points [12] Earnings Outlook - The company anticipates reported earnings per share (EPS) growth in the range of 12-13%, up from the previous forecast of 9.5-10.5% [14] - For the third quarter of 2024, reported sales growth is expected to be about 2.5%, with organic sales growth of nearly 3% [15]

Core Viewpoint - Church & Dwight (CHD) reported quarterly earnings of $0.93 per share, exceeding the Zacks Consensus Estimate of $0.84 per share, and showing a slight increase from $0.92 per share a year ago, indicating a positive earnings surprise of 10.71% [1][2] Financial Performance - The company achieved revenues of $1.51 billion for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 0.21% and reflecting a year-over-year increase from $1.45 billion [2] - Over the last four quarters, Church & Dwight has consistently exceeded consensus EPS estimates [2] Stock Performance - Church & Dwight shares have increased approximately 5.8% since the beginning of the year, while the S&P 500 has gained 14.2%, indicating underperformance relative to the broader market [3] Future Outlook - The company's earnings outlook will be crucial for assessing future stock performance, with current consensus EPS estimates at $0.84 for the upcoming quarter and $3.46 for the current fiscal year [4][7] - The Zacks Rank for Church & Dwight is currently 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6] Industry Context - The Soap and Cleaning Materials industry, to which Church & Dwight belongs, is currently ranked in the top 31% of over 250 Zacks industries, indicating a favorable industry outlook [8]

[Executive Summary & Q2 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q2%20Highlights) Church & Dwight exceeded Q2 2024 expectations with strong organic sales growth and improved margins across all divisions [Q2 2024 Performance Overview](index=1&type=section&id=Q2%202024%20Performance%20Overview) Church & Dwight exceeded Q2 2024 outlook with stronger sales growth and gross margin expansion from broad organic growth Q2 2024 Performance Metrics | Metric | Q2 2024 Performance | | :------------------ | :------------------ | | Net Sales | +3.9% to $1,511.2 million | | Organic Sales | +4.7% | | Adjusted Gross Margin | +150 basis points | | Reported EPS | $0.99 (+11.2%) | | Adjusted EPS | $0.93 (+1.1%) | [CEO Commentary on Q2 Performance](index=1&type=section&id=CEO%20Commentary%20on%20Q2%20Performance) CEO Matthew Farrell highlighted strong Q2 results driven by brand strength, new products, and volume-led organic growth - All three divisions delivered organic growth, with **volume** being the primary driver[3](index=3&type=chunk) - Marketing as a percentage of sales increased **100 basis points to 10.1%**[3](index=3&type=chunk)[6](index=6&type=chunk) - Global online sales grew to **21.2%** of total consumer sales in Q2[3](index=3&type=chunk) Q2 2024 Organic Sales Growth by Division | Division | Organic Sales Growth | | :------------------------ | :------------------- | | Domestic Division | +3.8% | | International Division | +9.3% | | Specialty Products Division | +3.9% | [Q2 2024 Financial Review](index=3&type=section&id=Q2%202024%20Financial%20Review) The company's Q2 2024 financial review highlights strong consumer sales, significant gross margin expansion, and increased strategic investments [Sales Performance by Division](index=3&type=section&id=Sales%20Performance%20by%20Division) Consumer Domestic and International divisions achieved strong net and organic sales growth, despite a net sales decrease in Specialty Products Q2 2024 Sales Performance by Division | Division | Net Sales ($M) | Net Sales Change | Organic Sales Change | | :----------------------- | :------------- | :--------------- | :------------------- | | Consumer Domestic | $1,170.6 | +3.8% | +3.8% | | Consumer International | $263.7 | +9.0% | +9.3% | | Specialty Products | $76.9 | -8.6% | +3.9% | - Consumer Domestic growth was led by THERABREATH™ mouthwash, ARM & HAMMER™ Cat Litter, HERO™ acne products, ARM & HAMMER™ Liquid Detergent, and XTRA™ Liquid Detergent[5](index=5&type=chunk) - Consumer International growth was led by HERO, THERABREATH and vitamins[5](index=5&type=chunk) [Gross Margin and Operating Expenses](index=3&type=section&id=Gross%20Margin%20and%20Operating%20Expenses) Reported gross margin significantly increased due to a one-time tariff ruling, with adjusted gross margin expanding from productivity and mix Q2 2024 Gross Margin and Expenses | Metric | Q2 2024 Value | Change (bps) | | :--------------------------- | :------------ | :----------- | | Reported Gross Margin | 47.1% | +320 | | Adjusted Gross Margin | 45.4% | +150 | | Marketing Expense (% of Net Sales) | 10.1% | +100 | | Adjusted SG&A (% of Net Sales) | 14.4% | +20 | - Reported gross margin increase reflects a **one-time gain on a favorable tariff ruling**[6](index=6&type=chunk) - Adjusted gross margin expansion was due to improved productivity, volume, and mix, net of higher manufacturing costs[6](index=6&type=chunk) [Income from Operations and Tax Rate](index=3&type=section&id=Income%20from%20Operations%20and%20Tax%20Rate) Income from operations increased, with adjusted income also rising, while the effective tax rate increased due to lower prior-year stock option exercises Q2 2024 Income from Operations and Tax Rate | Metric | Q2 2024 Value ($M) | Change YoY | | :-------------------------- | :----------------- | :--------- | | Income from Operations | $336.9 | | | Adjusted Income from Operations | $316.0 | +5.0% | | Other Expense | -$19.5 | -$7.8 million | | Effective Tax Rate | 24.0% | +610 basis points | - The increase in effective tax rate was primarily due to higher stock option exercises in Q2 2023[7](index=7&type=chunk) [Operating Cash Flow and Financial Position](index=3&type=section&id=Operating%20Cash%20Flow%20and%20Financial%20Position) Cash from operations slightly decreased in H1 due to working capital, but the full-year outlook was raised, with increased capital expenditures H1 2024 Operating Cash Flow and Financial Position | Metric | H1 2024 Value ($M) | Change YoY | | :-------------------------- | :----------------- | :--------- | | Cash from Operations | $499.9 | -$9.3 million | | Capital Expenditures | $76.6 | +$13.4 million | | Cash on Hand (June 30, 2024) | $491.7 | | | Total Debt (June 30, 2024) | $2.2 billion | | - Full year cash flow from operations is now expected to be approximately **$1.08 billion** (previously $1.05 billion)[8](index=8&type=chunk) [Product Innovation](index=4&type=section&id=Product%20Innovation) The company drives growth through new product introductions, expanding existing brands into new segments and offering innovative solutions [Key New Product Launches](index=4&type=section&id=Key%20New%20Product%20Launches) The company is encouraged by consumer enthusiasm for 2024 new product introductions, expanding existing brands with innovative solutions - ARM & HAMMER™ Laundry launched Deep Clean™ Liquid and Unit Dose Detergent, and POWER SHEETS™ Laundry Detergent (now in brick & mortar)[9](index=9&type=chunk) - ARM & HAMMER™ Hardball™ Clumping Litter expanded nationally, a plant-based, lightweight litter[10](index=10&type=chunk) - THERABREATH™ entered the antiseptic segment with Deep Clean Oral Rinse, targeting **30%** of the mouthwash category[10](index=10&type=chunk) - BATISTE™ introduced Sweat Activated and Touch Activated dry shampoos for longer-lasting results[10](index=10&type=chunk) - HERO™ continues to drive acne category growth with new patch innovations and adjacent products like Dissolve Away Daily Cleansing Balm[11](index=11&type=chunk) [2024 Full Year and Q3 Outlook](index=4&type=section&id=2024%20Full%20Year%20and%20Q3%20Outlook) The company provided its 2024 full-year and Q3 outlook, tightening sales growth while raising gross margin and cash flow forecasts, with increased Q3 marketing [Sales and Margin Outlook](index=4&type=section&id=Sales%20and%20Margin%20Outlook) Despite moderating category consumption, the company expects brands to outperform, tightening full-year organic sales growth while raising adjusted gross margin 2024 Full Year Sales and Margin Outlook | Metric | New Outlook | Previous Outlook | | :---------------------------- | :----------------- | :----------------- | | Organic Sales Growth | ~4% | 4-5% | | Reported Sales Growth | ~3.5% | Slightly higher | | Adjusted Gross Margin Expansion | ~100-110 basis points | 75 basis points | | Marketing as % of Sales | ~11% | ~11% | - Reported sales growth is slightly lower due to divestitures and negative currency impact[12](index=12&type=chunk) [Earnings and Cash Flow Outlook](index=4&type=section&id=Earnings%20and%20Cash%20Flow%20Outlook) The company raised its full-year reported EPS growth and cash flow from operations outlook, maintaining the lower end of adjusted EPS guidance 2024 Full Year Earnings and Cash Flow Outlook | Metric | New Outlook | Previous Outlook | | :-------------------------- | :----------------- | :----------------- | | Reported EPS Growth | ~12-13% | 9.5-10.5% | | Adjusted EPS Growth | Lower end of 8-9% | 8-9% | | Cash Flow from Operations | ~$1.08 billion | ~$1.05 billion | | Expected Tax Rate | ~23% | ~23% | [Capital Allocation and Q3 Specific Outlook](index=5&type=section&id=Capital%20Allocation%20and%20Q3%20Specific%20Outlook) Capital expenditures are higher in 2024 due to capacity investments, with Q3 expecting sales growth, margin expansion, and lower adjusted EPS due to marketing 2024 Capital Expenditures and Q3 Outlook | Metric | Outlook | | :-------------------------- | :----------------- | | 2024 Capital Expenditures | ~$180 million | | 2025 Capital Spending | ~2% of sales | | Q3 Reported Sales Growth | ~2.5% | | Q3 Organic Sales Growth | ~3% | | Q3 Adjusted EPS | $0.67 (down 10% YoY) | - Capital allocation priorities remain unchanged, with an emphasis on accretive acquisitions of fast-moving consumable products[15](index=15&type=chunk) - Q3 Adjusted EPS is expected to be **down 10%** versus last year's adjusted Q3 EPS due to a significant increase in marketing spending[15](index=15&type=chunk) [Company Information & Disclaimers](index=5&type=section&id=Company%20Information%20%26%20Disclaimers) This section provides company background, highlights sustainability efforts, and outlines disclaimers for forward-looking statements and non-GAAP measures [Webcast and Company Profile](index=5&type=section&id=Webcast%20and%20Company%20Profile) Church & Dwight, a leading U.S. sodium bicarbonate producer, markets diverse personal care and household products, and hosted a Q2 2024 webcast - A webcast to discuss Q2 2024 results was held on August 2, 2024[16](index=16&type=chunk) - Founded in 1846, Church & Dwight is the leading U.S. producer of sodium bicarbonate (baking soda)[16](index=16&type=chunk) - The company markets brands such as ARM & HAMMER®, TROJAN®, OXICLEAN®, BATISTE®, THERABREATH®, and HERO®[16](index=16&type=chunk) [Sustainability Initiatives](index=5&type=section&id=Sustainability%20Initiatives) Church & Dwight demonstrates a long-standing commitment to sustainability through early adoption of recycled packaging and public recognition - Began using recycled paperboard for household product packaging in the early 1900s[17](index=17&type=chunk) - ARM & HAMMER brand introduced the first nationally distributed, phosphate-free detergent in 1970[17](index=17&type=chunk) - Received public recognition in 2023, including Newsweek Magazine's America's Most Responsible and America's Greenest Companies lists[17](index=17&type=chunk) [Forward-Looking Statements & Non-GAAP Measures](index=7&type=section&id=Forward-Looking%20Statements%20%26%20Non-GAAP%20Measures) The press release contains forward-looking statements subject to risks and uncertainties, and includes non-GAAP financial measures with reconciliations - Forward-looking statements are based on intentions, plans, expectations, and beliefs, subject to risks and uncertainties[17](index=17&type=chunk)[18](index=18&type=chunk) - Factors that could cause actual results to differ include market growth decline, economic conditions, raw material/energy prices, supply chain disruptions, and regulatory changes[18](index=18&type=chunk) - Non-GAAP financial measures are used for internal analysis and investor information, with reconciliations to GAAP measures provided[19](index=19&type=chunk)[25](index=25&type=chunk) [Financial Statements (Unaudited)](index=10&type=section&id=Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated statements of income, balance sheets, and cash flow, detailing financial performance and position [Condensed Consolidated Statements of Income](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The condensed consolidated statements of income detail the company's financial performance for Q2 and H1 2024 versus prior year Condensed Consolidated Statements of Income (Unaudited) | (In millions, except per share data) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Sales | $1,511.2 | $1,454.2 | $3,014.5 | $2,884.0 | | Gross Profit | $712.1 | $638.9 | $1,399.1 | $1,260.9 | | Income from Operations | $336.9 | $293.6 | $641.9 | $585.5 | | Net Income | $243.5 | $221.2 | $471.2 | $424.4 | | Diluted EPS | $0.99 | $0.89 | $1.91 | $1.72 | | Dividends per share | $0.28 | $0.27 | $0.57 | $0.54 | [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets present the company's financial position as of June 30, 2024, and December 31, 2023 Condensed Consolidated Balance Sheets (Unaudited) | (Dollars in millions) | June 30, 2024 | December 31, 2023 | | :--------------------------------- | :------------ | :---------------- | | **Assets** | | | | Cash and Cash Equivalents | $491.7 | $344.5 | | Total Current Assets | $1,755.2 | $1,529.7 | | Total Assets | $8,762.1 | $8,569.2 | | **Liabilities and Stockholders' Equity** | | |\ | Total Current Liabilities | $1,149.7 | $1,422.0 | | Long-Term Debt | $2,207.6 | $2,202.2 | | Stockholders' Equity | $4,305.5 | $3,855.4 | | Total Liabilities and Stockholders' Equity | $8,762.1 | $8,569.2 | [Condensed Consolidated Statements of Cash Flow](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) The condensed consolidated statements of cash flow provide an overview of cash generated from operating, investing, and financing activities for H1 2024 Condensed Consolidated Statements of Cash Flow (Unaudited) | (Dollars in millions) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash from operating activities | $499.9 | $509.2 | | Net cash (used in) investing activities | $(91.5) | $(69.2) | | Net cash (used in) financing activities | $(257.4) | $(315.4) | | Net change in cash and cash equivalents | $147.2 | $126.6 | [Product Line Net Sales](index=13&type=section&id=Product%20Line%20Net%20Sales) This section details the company's net sales performance by product line for Q2 and H1 2024, highlighting growth drivers [Six Months Ended 6/30/2024](index=13&type=section&id=Six%20Months%20Ended%206%2F30%2F2024) Total net sales for H1 2024 increased by **4.5%**, driven by strong growth in Consumer International and Household Products Product Line Net Sales (Six Months Ended 6/30/2024) | Product Line | 6/30/2024 ($M) | 6/30/2023 ($M) | Percent Change | | :--------------------------- | :------------- | :------------- | :------------- | | Household Products | $1,292.1 | $1,220.8 | 5.8% | | Personal Care Products | $1,043.7 | $1,024.3 | 1.9% | | Consumer Domestic | $2,335.8 | $2,245.1 | 4.0% | | Consumer International | $518.7 | $472.5 | 9.8% | | Total Consumer Net Sales | $2,854.5 | $2,717.6 | 5.0% | | Specialty Products Division | $160.0 | $166.4 | -3.8% | | Total Net Sales | $3,014.5 | $2,884.0 | 4.5% | [Three Months Ended 6/30/2024](index=13&type=section&id=Three%20Months%20Ended%206%2F30%2F2024) For Q2, total net sales increased by **3.9%**, with Consumer International showing the highest growth, while Specialty Products declined Product Line Net Sales (Three Months Ended 6/30/2024) | Product Line | 6/30/2024 ($M) | 6/30/2023 ($M) | Percent Change | | :--------------------------- | :------------- | :------------- | :------------- | | Household Products | $653.2 | $619.2 | 5.5% | | Personal Care Products | $517.4 | $509.0 | 1.7% | | Consumer Domestic | $1,170.6 | $1,128.2 | 3.8% | | Consumer International | $263.7 | $241.9 | 9.0% | | Total Consumer Net Sales | $1,434.3 | $1,370.1 | 4.7% | | Specialty Products Division | $76.9 | $84.1 | -8.6% | | Total Net Sales | $1,511.2 | $1,454.2 | 3.9% | [Non-GAAP Financial Measures & Reconciliations](index=13&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section defines non-GAAP financial measures and provides detailed reconciliations for key performance indicators [Definitions of Non-GAAP Measures](index=13&type=section&id=Definitions%20of%20Non-GAAP%20Measures) This section defines non-GAAP financial measures, including Organic Sales Growth and Adjusted EPS, explaining their utility for investors - Organic Sales Growth excludes the effect of acquisitions, divestitures, and foreign exchange rate changes to assess consistent sales trends[26](index=26&type=chunk) - Adjusted Gross Margin, SG&A, Income from Operations, and EPS are GAAP measures adjusted to exclude significant one-time items, providing insight into underlying business trends[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) [Organic Sales Reconciliation](index=15&type=section&id=Organic%20Sales%20Reconciliation) Reconciliation tables show organic sales growth for Q2 and H1 2024, adjusting reported sales for acquisitions, divestitures, and FX impacts Organic Sales Reconciliation (Three Months Ended 6/30/2024) (%) | | Total Company | Worldwide Consumer | Consumer Domestic | Consumer International | Specialty Products | | :----------------------- | :------------ | :----------------- | :---------------- | :--------------------- | :----------------- | | Reported Sales Growth | 3.9% | 4.7% | 3.8% | 9.0% | -8.6% | | Less: Acquisitions | 0.0% | 0.1% | 0.0% | 0.1% | 0.0% | | Add: FX / Other | 0.1% | 0.1% | 0.0% | 0.4% | 0.0% | | Add: Divestitures | 0.7% | 0.0% | 0.0% | 0.0% | 12.5% | | Organic Sales Growth | 4.7% | 4.7% | 3.8% | 9.3% | 3.9% | Organic Sales Reconciliation (Six Months Ended 6/30/2024) (%) | | Total Company | Worldwide Consumer | Consumer Domestic | Consumer International | Specialty Products | | :----------------------- | :------------ | :----------------- | :---------------- | :--------------------- | :----------------- | | Reported Sales Growth | 4.5% | 5.0% | 4.0% | 9.8% | -3.8% | | Less: Acquisitions | 0.0% | 0.0% | 0.0% | 0.1% | 0.0% | | Add: FX / Other | -0.1% | -0.1% | 0.0% | -0.6% | 0.0% | | Add: Divestitures | 0.5% | 0.0% | 0.0% | 0.0% | 9.3% | | Organic Sales Growth | 4.9% | 4.9% | 4.0% | 9.1% | 5.5% | [Adjusted Gross Margin Reconciliation](index=15&type=section&id=Adjusted%20Gross%20Margin%20Reconciliation) The reconciliation shows Q2 2024 reported gross margin was significantly impacted by a one-time favorable tariff ruling Adjusted Gross Margin Reconciliation (Q2 2024) | (Dollars in millions) | For the quarter ended June 30, 2024 | % of NS | | :---------------------------- | :---------------------------------- | :------ | | Gross Margin - Reported | $712.1 | 47.1% | | Tariff Ruling | $(26.1) | -1.7% | | Gross Margin - Adjusted (non-GAAP) | $686.0 | 45.4% | - Adjusted Gross Margin increased by **150 basis points** year-over-year[32](index=32&type=chunk) [Adjusted SG&A Reconciliation](index=16&type=section&id=Adjusted%20SG%26A%20Reconciliation) The reconciliation for SG&A expenses shows adjustments primarily related to Hero Restricted Stock charges, resulting in a slightly higher adjusted SG&A Adjusted SG&A Reconciliation (Q2 2024) | (Dollars in millions) | For the quarter ended June 30, 2024 | % of NS | | :---------------------------- | :---------------------------------- | :------ | | SG&A - Reported | $222.8 | 14.7% | | Hero Restricted Stock | $(5.2) | -0.3% | | SG&A - Adjusted (non-GAAP) | $217.6 | 14.4% | - Adjusted SG&A increased by **20 basis points** year-over-year[33](index=33&type=chunk) [Adjusted Income From Operations Reconciliation](index=16&type=section&id=Adjusted%20Income%20From%20Operations%20Reconciliation) The reconciliation for income from operations highlights the impact of Hero Restricted Stock and the tariff ruling on reported figures Adjusted Income From Operations Reconciliation (Q2 2024) | (Dollars in millions) | For the quarter ended June 30, 2024 | % of NS | | :---------------------------- | :---------------------------------- | :------ | | Income From Operations - Reported | $336.9 | 22.3% | | Hero Restricted Stock | $5.2 | 0.3% | | Tariff Ruling | $(26.1) | -1.7% | | Income From Operations - Adjusted (non-GAAP) | $316.0 | 20.9% | - Adjusted Income From Operations increased by **30 basis points** year-over-year[34](index=34&type=chunk) [Adjusted EPS Reconciliation](index=16&type=section&id=Adjusted%20EPS%20Reconciliation) The reconciliation for diluted EPS shows reported EPS was **$0.99**, while adjusted EPS was **$0.93**, reflecting specific adjustments Adjusted Diluted Earnings Per Share Reconciliation (Q2 2024) | | EPS ($) | | :-------------------------------- | :------ | | Diluted Earnings Per Share - Reported | $0.99 | | Hero Restricted Stock | $0.02 | | Tariff Ruling | $(0.08) | | Diluted Earnings Per Share - Adjusted (non-GAAP) | $0.93 | - Adjusted Diluted EPS increased by **1.1%** year-over-year[34](index=34&type=chunk) [Forecasted Sales and EPS Reconciliation](index=16&type=section&id=Forecasted%20Sales%20and%20EPS%20Reconciliation) This section provides a reconciliation of forecasted sales growth and diluted EPS for Q3 and full year 2024 Forecasted Sales Growth Reconciliation (%) | (Forecasted Sales Growth) | Q3 2024 | Full Year 2024 | | :------------------------ | :------ | :------------- | | Reported Sales Growth | 2.5% | 3.5% | | Organic Sales Growth | 3.0% | 4.0% | Forecasted Diluted EPS Reconciliation ($) | (Forecasted Diluted EPS) | Q3 2024 | Full Year 2024 | | :------------------------ | :------ | :------------- | | Reported EPS | $0.65 | $3.42 to $3.45 | | Adjusted EPS (non-GAAP) | $0.67 | $3.42 to $3.45 | - Q3 2024 Adjusted EPS is forecasted to be **down 9.5%** year-over-year[35](index=35&type=chunk)

Church & Dwight., Inc. (CHD) gears up to report its second-quarter fiscal 2024 earnings on Aug 2, before market open. The company is likely to register top-line growth while the bottom line is expected to decrease year over year. The Zacks Consensus Estimate for second-quarter revenues stands at $1,509 million, which indicates an increase of 3.8% from the year-ago quarter's reported figure. CHD boasts a strong earnings surprise record, having surpassed the consensus estimate in each of the last four quarter ...

The current level reflects an upward revision of 0.1% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projections over this period. Prior to a company's earnings release, it is of utmost importance to factor in any revisions made to the earnings projections. These revisions serve as a critical gauge for predicting potential investor behaviors with respect to the stock. Empirical studies con ...

Core Insights - Church & Dwight (CHD) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ended June 2024 [1] - Revenue is projected to be $1.51 billion, reflecting a 3.8% increase from the same quarter last year [2] - The company's earnings surprise prediction model indicates a positive outlook for earnings performance [3][10] Estimate Revisions and Predictions - The Zacks Earnings ESP model shows that the Most Accurate Estimate for Church & Dwight is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +2.60% [15] - Historical performance indicates that Church & Dwight has previously exceeded consensus EPS estimates, with a surprise of +11.63% in the last reported quarter [16] - The combination of a positive Earnings ESP and a Zacks Rank of 3 suggests a likelihood of beating the consensus EPS estimate [10][25] Industry Context - Clorox (CLX), a competitor in the same industry, is expected to report earnings per share of $1.54, indicating a year-over-year decline of 7.8% [12] - Clorox's revenues are projected to be $1.97 billion, down 2.4% from the previous year [12] - The earnings report for both companies is set to be released on August 2, 2024, which could influence stock movements based on performance relative to expectations [13]