Church & Dwight(CHD) - 2025 Q2 - Quarterly Results

Financial Performance - Q2 2025 net sales decreased by 0.3% to $1,506.3 million, with domestic sales down 1.4% and international sales up 5.3%[2] - Organic sales increased by 0.1%, with domestic down 1.0% and international up 4.8%, exceeding the quarterly organic outlook[2] - Reported EPS was $0.78, while adjusted EPS was $0.94, reflecting a 1% increase and exceeding the company's outlook of $0.85[3] - Total net sales for the three months ended June 30, 2025, were $1,506.3 million, a decrease of 0.3% compared to $1,511.2 million for the same period in 2024[32] - Net income for the three months ended June 30, 2025, was $191.0 million, compared to $243.5 million in 2024, representing a decrease of 21.5%[32] - The company reported a diluted net income per share of $0.78 for the three months ended June 30, 2025, down from $0.99 in the same period of 2024[32] - For the six months ended June 30, 2025, reported sales growth was -1.4%, with organic sales growth at -0.6% overall[47] - Net income for the three months ended June 30, 2025, was $191.0 million, reflecting a decrease of 21.2% year-over-year[46] - Adjusted net income per share for the same period was $0.78, which is a 21.2% decline compared to the previous year[46] Operational Metrics - Cash from operations for the first six months of 2025 was $416.5 million, a decrease of $83.4 million year-over-year[15] - Gross profit for the six months ended June 30, 2025, was $1,306.6 million, down from $1,399.1 million in 2024, reflecting a decline of approximately 6.6%[32] - The gross margin for the three months ended June 30, 2025, was 43.0%, down from 47.1% in the same period last year[46] - Operating income was reported at $641.9 million, resulting in an operating margin of 21.3%, an increase of 1.0% from the previous year[49] - The operating margin for the three months ended June 30, 2025, was 17.5%, a decrease of 4.8% year-over-year[46] Marketing and Expenses - Marketing expense as a percentage of net sales increased to 10.4%, reflecting a 30 basis point increase from the previous year[13] - The company’s marketing expenses for the three months ended June 30, 2025, were $157.1 million, an increase from $152.4 million in 2024[32] - Marketing expenses amounted to $304.4 million, representing 10.1% of net sales, an increase of 1.3% year-over-year[49] - SG&A expenses for the same period were $228.2 million, accounting for 15.1% of net sales[46] - SG&A expenses were $452.8 million, accounting for 15.0% of net sales, with a year-over-year increase of 0.4%[49] Strategic Initiatives - The company completed the acquisition of Touchland, which is the second-largest brand in the hand sanitizer category in the U.S.[6] - The company expects 2025 reported sales growth of approximately 0 to 2%, including the impact of the Touchland acquisition[18] - The company plans to exit the FLAWLESS™, SPINBRUSH™, and WATERPIK™ businesses by early 2026, incurring approximately $51 million in pre-tax charges[8] - The company plans to focus on integrating the Touchland acquisition and realizing cost savings, although there are risks associated with successful integration[32] Future Projections - For Q3, the company expects reported and organic sales growth of approximately 1-2% and adjusted EPS of $0.72, a decrease of 9% compared to last year's adjusted Q3 EPS[22] - The company forecasts reported sales growth of 1.5% for the quarter ended September 30, 2025, and 1.0% for the year ended December 31, 2025[50] - Organic sales growth is projected to be 1.5% for the quarter and 1.0% for the year, indicating stable performance[50] Asset and Debt Management - Total current assets as of June 30, 2025, were $2,229.8 million, slightly down from $2,240.6 million at the end of 2024[33] - The company’s total assets decreased to $8,788.2 million as of June 30, 2025, from $8,883.1 million at the end of 2024[33] - The company’s long-term debt remained stable at $2,205.8 million as of June 30, 2025, compared to $2,204.6 million at the end of 2024[33] Divestiture Impact - The company reported a significant divestiture contribution of 0.6% to sales growth for the three months ended June 30, 2025[45] - Equity in earnings of affiliates decreased by $2.2 million, totaling $4.2 million for the period[49] - Other income (expense), net, showed an improvement of $12.2 million, resulting in a total of $(41.5) million[49]