Church & Dwight Co., Inc. Reports Strong Q3 2024 Financial Results
Church & Dwight Co., Inc. (NYSE: CHD) reported its financial results for the third quarter of 2024, highlighting robust sales growth and gross margin expansion despite a reported loss due to non-cash impairment charges.
Financial Highlights
| Metric | Q3 2024 | YoY Change | Consensus Estimates |
|---|---|---|---|
| Total Revenue | $1.51 billion | +3.8% | $1.5 billion |
| Reported EPS | -$0.31 | N/A | N/A |
| Adjusted EPS¹ | $0.79 | +6.8% | $0.68 |
Church & Dwight outperformed consensus estimates for adjusted EPS, reflecting the company's adept handling of strong consumer demand and effective cost management. Despite experiencing an adjusted income from operations of $267.21 million, the net loss was attributable to a $357.1 million non-cash impairment related to prior acquisitions in the vitamin business.
Segment Revenues and Performance
| Segment | Revenue | Revenue Change | Organic Sales Growth |
|---|---|---|---|
| Consumer Domestic | $1.17 billion | +3.3% | +3.3% |
| Consumer International | $267.7 million | +9.5% | +8.1% |
| Specialty Products | $72.1 million | -8.0% | +7.5% |
The Domestic division saw a 3.3% organic growth, driven by personal care sales, while the International division reported a notable 9.5% revenue increase. The Specialty Products division's revenues declined due to strategic business exits, yet achieved 7.5% organic growth through targeted price and product initiatives. These segment results underscore Church & Dwight's brand strength across diverse markets.
Key Developments and Operational Highlights
- Sales performance surpassed expectations with a 3.8% net sales growth.
- Gross margin expansion by 80 basis points and adjusted gross margin expansion by 60 basis points.
- The marketing spend as a percentage of sales increased by 80 basis points to support brand investments.
- Global online sales accounted for 20.7% of total consumer sales.
- Cash from operations year-to-date reached $863.9 million, with a full-year expectation of approximately $1.1 billion.
Management Commentary
CEO Matthew Farrell expressed satisfaction with the company's performance, citing the strength of new product launches and effective brand investments. He emphasized ongoing strategic investments, particularly in marketing, to drive future consumption and share gains. Farrell noted the robust organic growth within all company divisions and anticipated continuing this trajectory in Q4.
Forward Guidance
For the full year 2024, Church & Dwight projects net sales to increase by approximately 3.5% and organic sales to grow by around 4%. They expect adjusted gross margin expansion of approximately 110 basis points and adjusted EPS growth of about 8%. The company remains cautious about the U.S. consumer environment but optimistic about ongoing product and volume growth.
Stock Price Movement
Following the earnings announcement, Church & Dwight's stock price experienced a minor decline, reflecting a 0.61% decrease, likely due to the reported loss despite operational success.
¹Adjusted EPS excludes significant one-time items and non-cash charges for a clearer representation of performance.
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