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Sep 30, 2023
Church & Dwight Q3 2023 Earnings Report
Church & Dwight exceeded its outlook with stronger than expected sales growth and gross margin expansion.
Key Takeaways
Church & Dwight reported a 10.5% increase in net sales to $1,455.9 million and gross margin expansion of 270 basis points. Organic sales grew by 4.8%, driven by volume and positive product mix and pricing. Reported EPS was $0.71, while adjusted EPS was $0.74. The company raised its full-year net sales outlook to 9% and expects approximately $1.0 billion in cash from operations.
Net sales increased by 10.5%, with domestic sales up 12.1%, international sales up 11.2%, and specialty products down 10.1%.
Organic sales grew by 4.8%, driven by a 2.7% increase in volume and a 2.1% contribution from product mix and pricing.
Gross margin expanded by 270 basis points due to improved pricing, volume, productivity, and the impact of the HERO acquisition.
The company is raising its full-year net sales outlook to 9% and expects approximately $1.0 billion in cash from operations.
Revenue by Segment
Forward Guidance
The company expects approximately 5% reported sales growth and 4% organic sales growth for Q4 2023.
Positive Outlook
- Strong sales growth and gross margin expansion experienced through the first nine months of the year are expected to continue in the fourth quarter.
- Full year adjusted operating profit is expected to increase approximately 8%.
- Gross margin is expected to expand approximately 210 basis points for the full year.
- Double-digit percentage increase in gross profit is expected for the full year 2023.
- Cash flow from operations is expected to be approximately $1.0 billion, an increase of 13% compared to 2022.
Challenges Ahead
- Higher marketing and SG&A dollars are expected to offset higher revenue and gross profits.
- A significant increase in marketing spending is expected in Q4.
- An increase in SG&A is expected due to higher incentive compensation and investments for the future.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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