Church & Dwight Co Inc (NYSE: CHD) reported second-quarter (Q2) 2023 sales growth of 9.7% year-on-year to $1.45 billion, beating the consensus of $1.42 billion.
The Victorville, California-based company continues to experience strong consumer demand and a favorable product mix. Organic sales grew 5.4%. “Analysts from bitcoin companies joined in congratulating the company on their Twitter conversations.
“CHD Crosses Above Average Analyst Target #ETFs #StockMarket In recent trading, shares of Church & Dwight Co Inc (Symbol: CHD) have crossed above the average analyst 12-month target price of $96.77, changing hands for $97.15/share. When a stock reaches the target a…” said StockandmoreCom in a tweet.
Adjusted EPS of $0.92 beat the analyst consensus of $0.79. Net sales from Consumer Domestic increased 12.3% Y/Y to $1.12 billion, Consumer International rose 4.9% to $241.9 million, and Specialty Products slipped 6.5% to $84.1 million. According to the Yahoo Finance Website, net sales were hurt by currency headwinds to the tune of 1.2%. Organic sales were up 6.1%, driven by favorable pricing and product mix of 5.5% and higher volumes to the tune of 0.6%. Organic sales growth was fueled by BATISTE, OXICLEAN, STERIMAR and WATERPIK.
Fans of the company went ahead to give their congratulatory messages “BREAKING NEWS for Church & Dwight Co Inc -2.3%: Church & Dwight Co Inc’s CHD stock price declines amid underperformance and broader market move. $CHD #CHD #Church&DwightCo,” said market reader insights on a tweet.
Sales in the segment dropped 6.5% to $84.1 million. Organic sales fell 6.5% due to soft volumes (down 4.2%) and a reduced price/mix (down 2.3%), mainly due to the dairy business as low-priced imports were back to the U.S. market.
The gross margin increased 270 basis points to 43.9% due to improved pricing, productivity, and the impact of the HERO acquisition, net of higher manufacturing costs. Adjusted Income from Operations was $300.9 million or 20.6% of net sales (margin up 80 basis points vs prior year). The company exited the quarter with cash and equivalents worth $396.9 million. Long-Term Debt as of quarter-end was $2.4 billion.
Church & Dwight raised FY23 adjusted EPS forecast To $3.15, representing 6% growth (Prior View: 2%-4%). The consensus stands at $3.11. The company increased its FY23 net sales growth outlook from 6%-7% to ~8%. CHD boosted FY23 organic sales growth guidance from 3%-4% to ~5%. The company projects the full-year gross margin to expand by approximately 200 basis points (prior view: 120 bps). CHD predicts a double-digit percentage increase in gross profit in FY23.
CHD ended the quarter with cash on hand of $396.9 million and total debt of $2.4 billion. For the six months ended Jun 30, 2023, cash from operating activities was $509.2 million. Capital expenditures were $24.4 million in the same time frame. The company expects about $250 million in capital expenditures for 2023. It still anticipates annual capital expenditures to return to nearly 2% of sales in 2025. For 2023, Church & Dwight raised its expectation of cash flow from operations from $950 million to around $1 billion.
For the third quarter of 2023, Church & Dwight expects a roughly 8% increase in reported sales. Organic sales are estimated to rise nearly 4%. Management expects to witness gross margin expansion in the quarter, alongside expecting a significant rise in marketing and SG&A spending. It also expects a higher tax rate in the third quarter.
Consequently, management expects adjusted EPS of 66 cents, indicating a 13% drop from the year-ago quarter’s adjusted EPS. This is because investment spending is more skewed toward the third quarter. Reported EPS is likely to be 63 cents in the third quarter.
Produced in association with Benzinga
Edited by Eunice Anyango Oyule and Judy J. Rotich
