Loading...
01/10 16:26
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights a cautious outlook with lowered revenue and EPS guidance, indicating potential struggles. Despite optimism in product innovation and international expansion, the focus on divestitures and tariff management suggests underlying challenges. The Q&A section reveals management's reluctance to provide specifics on strategic decisions and financial impacts, adding uncertainty. The combination of these factors, along with a reduced growth outlook, suggests a negative sentiment, likely leading to a stock price decline of -2% to -8% over the next two weeks.
Organic Sales Growth 0.1%, exceeding the outlook of -2% to flat. The improvement was due to better-than-expected category consumption data.
Adjusted Gross Margin 45.0%, a 40 basis point decrease year-over-year. The decrease was driven by inflation, tariffs, volume, price, and mix, partially offset by productivity and higher-margin acquisition business mix.
Adjusted EPS $0.94, up 1% from the prior year and $0.09 higher than the $0.85 outlook. This was driven by stronger sales performance and gross margin resiliency.
Marketing Expense 10.4% of sales, a 30 basis point increase year-over-year. This reflects continued investment in marketing to support brand growth.
Adjusted SG&A Decreased 80 basis points year-over-year, reflecting cost management efforts.
Cash from Operating Activities $416.5 million for the first 6 months of 2025, a decrease of $83 million year-over-year due to working capital timing and lower cash earnings.
Capital Expenditures $39 million for the first 6 months, a $37.6 million decrease year-over-year, reflecting a return to historical levels of 2% of sales.
Share Repurchase $300 million executed in Q2 through an accelerated share repurchase program.
International Sales Growth 5.3% in Q2, with organic growth of 4.8% driven by higher volume, price, and mix. Growth was led by HERO, THERABREATH, and FEMFRESH.
ARM & HAMMER Liquid Laundry Detergent Consumption Grew 3.2%, outpacing the category growth of 1.3%, driven by strong brand performance.
ARM & HAMMER Litter Consumption Grew 3.4%, while the category grew 4.1%, impacted by heightened competitive promotions.
BATISTE Dry Shampoo Consumption Declined 7% due to competitive price increases, economic pressure, and resolved supply issues.
THERABREATH Mouthwash Consumption Grew 22.5%, outperforming the declining mouthwash category and achieving a 21% market share.
HERO Acne Care Consumption Grew 11.4%, compared to the acne category growth of 1.5%, maintaining its #1 brand position with a 22% share.
Gummy Vitamin Consumption Declined 25%, despite the category growing 4%, due to TDP declines.
Touchland acquisition: Church & Dwight acquired Touchland, the second-largest hand sanitizer brand in the U.S., marking it as their eighth power brand. Touchland experienced strong growth in Q2, outpacing the category and gaining share.
New product launches: Church & Dwight is launching BATISTE Light in the dry shampoo category and Mighty Patch Body in the acne care segment in 2025. These innovations aim to attract new users and increase household penetration.
International growth: The international business delivered 5.3% sales growth in Q2, with organic growth at 4.8%. Growth was led by HERO, THERABREATH, and FEMFRESH, with all subsidiaries delivering growth and gaining share in power brands.
Online sales: Online sales now account for 23% of global sales, showing continued growth in the online trade class.
Strategic exits: The company exited the FLAWLESS, SPINBRUSH, and WATERPIK showerhead businesses to focus on stronger brands and value creation.
Vitamin business review: Church & Dwight is undertaking a strategic review of its vitamin business, including supply chain streamlining, potential joint ventures, partnerships, and divestiture options. The gummy vitamin segment remains a drag on growth.
Share repurchase: The company executed a $300 million share repurchase program in Q2 through open market transactions.
M&A strategy: Church & Dwight continues to pursue accretive acquisitions, focusing on fast-moving consumable products.
Macroeconomic Volatility: The macro environment has been volatile and uncertain, with frequent changes in tariff policies and consumer confidence hitting a 12-year low earlier in Q2. This creates challenges in forecasting and planning.
Consumer Confidence: Consumer uncertainty and low confidence levels earlier in Q2 impacted sales, although there has been some recovery.
Gummy Vitamin Business: The gummy vitamin business continues to be a drag on organic growth, with consumption down 25% despite category growth of 4%. Declining TDPs and mixed results from revitalization efforts are ongoing challenges.
Retail Destocking: Retail destocking in Q2 muted volume growth in the U.S. consumer business, with slight impacts expected to continue.
Competitive Pressures: Heightened competitive promotions in the litter category and competitive price increases in the dry shampoo category (BATISTE) have impacted consumption and market share.
Supply Chain Issues: Supply issues affected BATISTE dry shampoo consumption, although these issues have now been resolved.
Product Recall Costs: The ZICAM/Orajel swab recall negatively impacted gross margins by 30 basis points.
Tariff Costs: Tariffs contributed to a 140 basis point negative impact on gross margins, with some costs shifting to Q3.
Exited Businesses: The wind-down of the FLAWLESS, SPINBRUSH, and WATERPIK showerhead businesses is expected to impact financials, including a reduction in sales.
Marketing and SG&A Costs: Marketing expenses increased as a percentage of sales, and SG&A costs decreased slightly, but these factors continue to require careful management.
Full Year Organic Revenue Growth: Expected to be approximately 0% to 2%, reflecting brand and category growth momentum and a balanced macro view around the uncertainty in the U.S. and global economies.
Adjusted EPS Growth: Expected to be 0% to 2% for the full year, including the impact of the Touchland acquisition, wind down of exited businesses, and product recall costs.
Gross Margin Outlook: Full year gross margin expected to contract by 60 basis points versus 2024 due to elevated input costs, tariffs, recall expenses, and unfavorable price and mix.
Q3 Organic Sales Growth: Expected to be approximately 1% to 2%.
Q3 Adjusted Gross Margin: Expected to contract by approximately 100 basis points, primarily from inflation, tariff costs, and lower margins of exited businesses.
Marketing Expense: Targeting 11% of net sales for the full year, in line with the evergreen model.
Capital Expenditures: Expected to be approximately $130 million for the full year, returning to historical levels of 2% of sales in 2025.
Cash Flow from Operations: Expected to remain at $1.05 billion for the full year.
M&A Strategy: Focus on pursuing accretive acquisitions in fast-moving consumable products, with an emphasis on meeting strict criteria.
Share Repurchase Program: In the second quarter, the company executed a $300 million share repurchase via open market transactions through an accelerated share repurchases program.
The earnings call summary indicates strong financial performance with organic sales growth, increased cash flow, and significant share repurchases. The Q&A section reveals optimism about brand performance, particularly TOUCHLAND, and strategic focus on M&A. Despite some uncertainties, such as future guidance and international challenges, the overall sentiment is positive, with strong brand momentum and innovation strategies. The positive aspects outweigh concerns, suggesting a likely positive stock price movement.
The earnings call highlights a cautious outlook with lowered revenue and EPS guidance, indicating potential struggles. Despite optimism in product innovation and international expansion, the focus on divestitures and tariff management suggests underlying challenges. The Q&A section reveals management's reluctance to provide specifics on strategic decisions and financial impacts, adding uncertainty. The combination of these factors, along with a reduced growth outlook, suggests a negative sentiment, likely leading to a stock price decline of -2% to -8% over the next two weeks.
The earnings call reveals several negative indicators: declining EPS and revenue, reduced organic sales, and decreased gross margins due to tariff and inflation pressures. The lack of share repurchase or dividend announcements and unclear management responses further add to the negative sentiment. Despite some positive aspects, like a stable promotional environment and international growth, the overall sentiment is negative due to weak financial performance and guidance.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
