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Dec 31, 2022
Church & Dwight Q4 2022 Earnings Report
Net sales exceeded outlook, and provided 2023 outlook. A 4% dividend increase was announced.
Key Takeaways
Church & Dwight reported a 4.9% increase in net sales for Q4 2022, exceeding the company's outlook. Organic sales increased by 0.4%. Adjusted EPS was $0.62, at the high end of the company's outlook.
Q4 net sales increased 4.9%, exceeding the Company’s outlook of 2% growth.
Organic sales increased 0.4%, exceeding the Company’s outlook of down 1%.
Adjusted EPS in Q4 was $0.62 per share compared to $0.64 EPS in Q4 2021.
The Domestic business gained market share in 7 of our 14 power brands and expects to accelerate market share gains in 2023 as we materially increase our marketing spending as a percent of sales.
Church & Dwight
Church & Dwight
Church & Dwight Revenue by Segment
Church & Dwight Revenue by Geographic Location
Revenue by Segment
Household Products Revenue
CapyFin.comPersonal Care Products Revenue
CapyFin.comConsumer International Revenue
CapyFin.comSpecialty Products Division Revenue
CapyFin.comRevenue by Geographic Location
Consumer Domestic Revenue
CapyFin.com Forward Guidance
The company expects full year reported sales growth to be approximately 5-7% with organic sales growth of approximately 2-4%. Adjusted EPS expectation for 2023 is 0-4% growth.
Positive Outlook
- Pricing will drive the organic sales increase with volumes relatively stable.
- We intend to sustain the current momentum in consumption by increasing marketing as a percentage of net sales to approximately 10.5%.
- Gross margin is expected to benefit from pricing, pack size changes, laundry concentration and the full year impact of the higher margin HERO business.
- Supply chain fill levels continue to show improvement and we expect a return to pre-pandemic levels in the second half of 2023 as incremental capacity comes online.
- Operating profit is expected to increase 4% to 8% reflecting the strength of the business.
Challenges Ahead
- Uncertainty remains regarding inflation, commodities, interest rates, currency movements, China, and consumer confidence.
- We expect 1st half volumes to be lower year-over-year due to continued softness in our discretionary categories, with a return to volume growth in the 2nd half.
- The company’s incentive compensation plan is expected to return to normal levels in 2023, adding another $30 million of expense.
- Our tax rate, which is expected to increase to approximately 23% (210 basis point increase), and higher interest expense (excluding debt related to Hero) creates another 2% drag to Adjusted EPS.
- This outlook includes incremental inflation headwinds of $125 million due to higher commodity and materials costs.
Revenue & Expenses
Visualization of income flow from segment revenue to net income