On August 2, 2024, Church & Dwight Co Inc (CHD, Financial) released its 8-K filing reporting robust second-quarter results that surpassed analyst expectations. The company, known for its leading global production of baking soda and a diverse portfolio of consumer products, demonstrated significant growth in key financial metrics.
Company Overview
Church & Dwight is the leading global producer of baking soda. Beyond baking soda, the products in its portfolio have a vast category reach, including laundry products, cat litter, oral care, deodorant, and nasal care, all sold under the Arm & Hammer brand. Its mix also includes Batiste, OxiClean, Vitafusion, WaterPik, Hero, and TheraBreath, which together with Arm & Hammer constitute around 70% of its annual sales and profits. Even as it works to extend the reach of its products, Church & Dwight still derives more than 80% of its sales from its home market in the US.
Q2 2024 Financial Performance
Church & Dwight Co Inc (CHD, Financial) reported net sales of $1,511.2 million for Q2 2024, a 3.9% increase from the previous year. This growth was driven by a 4.7% rise in organic sales, with domestic sales up by 3.8% and international sales by 9.3%. The Specialty Products Division (SPD) saw an 8.6% decline in net sales but managed a 3.9% increase in organic sales.
Reported gross margin expanded by 320 basis points to 47.1%, bolstered by a favorable tariff ruling. Excluding this one-time gain, the adjusted gross margin increased by 150 basis points to 45.4%. Reported earnings per share (EPS) were $0.99, while adjusted EPS stood at $0.93, exceeding the company's outlook of $0.83.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $1,511.2 million | $1,454.2 million |
| Gross Profit | $712.1 million | $638.9 million |
| Reported EPS | $0.99 | $0.89 |
| Adjusted EPS | $0.93 | $0.92 |
Operational Highlights
Church & Dwight's Consumer Domestic segment saw net sales of $1,170.6 million, a 3.8% increase, driven by growth in household and personal care products. The Consumer International segment reported net sales of $263.7 million, a 9.0% increase, with significant contributions from HERO, THERABREATH, and vitamins. The Specialty Products segment, despite a net sales decline, achieved a 3.9% increase in organic revenue.
Marketing expenses rose by $20.2 million to $152.4 million, reflecting increased investment in brand and product promotion. Selling, general, and administrative expenses (SG&A) were $222.8 million, including charges related to the HERO acquisition.
Cash Flow and Balance Sheet
For the first six months of 2024, Church & Dwight generated $499.9 million in cash from operations. Capital expenditures amounted to $76.6 million, supporting capacity expansion projects. As of June 30, 2024, the company held $491.7 million in cash and equivalents, with total debt at $2.2 billion.
CEO Commentary
"We are really pleased with another strong quarter. The Company is performing well with all three divisions delivering organic growth. Our outstanding Q2 results reflect the strength of our brands, the early success of our new products, and our perennial focus on execution." - Matthew Farrell, CEO
Outlook for 2024
Church & Dwight has raised its full-year outlook for gross margin expansion and cash from operations. The company now expects net sales growth of 3.5% and organic sales growth of 4.0%. Adjusted EPS growth is projected to be at the lower end of the 8-9% range, with cash from operations anticipated to reach approximately $1.08 billion.
For more detailed insights and the complete earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Church & Dwight Co Inc for further details.
