Church & Dwight (CHD) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales grew 3.8% to $1,510.6M, with organic sales up 4.3% driven by strong domestic, international, and specialty product performance, supported by volume and pricing gains.

• Adjusted EPS was $0.79, up 6.8% year-over-year and above outlook; reported loss per share was $(0.31) due to a $357.1M non-cash impairment in the vitamin business.

• Gross margin improved by 80 bps to 45.2% in Q3, aided by productivity, pricing, and a favorable tariff ruling.

• Online sales represented 21% of global sales, and market share gains were achieved in most categories.

• The Graphico acquisition in Japan and the exit of certain product lines, including MEGALAC and Passport, marked key portfolio changes.

Financial highlights

• Q3 2024 gross profit was $683.1M, up 5.7% year-over-year; nine-month gross profit was $2,082.2M, up 9.2%.

• Adjusted gross margin reached 45% (up 60 bps); reported gross margin was 45.2% (up 80 bps).

• Adjusted EPS grew nearly 7% year-over-year to $0.79; reported EPS was a loss of $0.31 due to a $357.1M non-cash impairment in the vitamin business.

• Cash from operations for the first nine months was $863.9M, up $68.8M year-over-year; full-year cash flow from operations expected at ~$1.1B.

• CapEx for the first nine months was $125M, with full-year CapEx expected at $180M.

Outlook and guidance

• Full-year 2024 net sales expected to grow 3.5%, organic sales 4.0%.

• Full-year adjusted EPS growth projected at approximately 8%; adjusted gross margin expansion now expected at 110 bps.

• Reported EPS to decline ~23% due to impairment; Q4 adjusted EPS expected at $0.76, up 17% year-over-year.

• Marketing as a percent of sales to be above 11%, with incremental investments planned if performance exceeds outlook.

• Management expects sufficient cash flow and borrowing capacity to fund share repurchases, dividends, debt service, and capital expenditures of ~$180M in 2024.