Church & Dwight Reports Q1 Results
Church & Dwight Co., Inc. (NYSE: CHD) reported a 6.3% increase in first quarter net sales, totaling $1,238.9 million. The growth was primarily attributed to strong consumer demand and a 4.9% rise in organic sales driven by volume and pricing. Despite a 4.3% decline in EPS to $0.88, adjusted EPS was flat at $0.83, exceeding expectations. The company faced challenges from raw material shortages and rising costs but continues to expect robust sales growth for the year.
- First quarter net sales increased 6.3% to $1,238.9 million.
- Organic sales grew 4.9%, driven by strong consumer demand.
- Adjusted EPS of $0.83 exceeded the outlook of $0.80.
- Online sales surged 54%, representing 14.8% of total sales.
- New product launches are anticipated to enhance long-term revenue.
- EPS decreased by 4.3% to $0.88.
- Gross margin decreased by 120 basis points to 44.5% due to rising distribution and manufacturing costs.
- Operating cash flow fell 57.6% to $100.2 million.
- Expected gross margin contraction of 350 basis points in Q2.
Church & Dwight Co., Inc. (NYSE: CHD) today announced first quarter net sales grew
First quarter 2021 EPS decreased
Matthew Farrell, Chief Executive Officer, commented, “I’d like to recognize all Church & Dwight employees around the world for their continued dedication to helping us successfully navigate the difficult environment, especially our Supply Chain and R&D teams as during this quarter the Company faced additional complexities of raw material shortages as a result of the Texas freeze.
“Our brands once again delivered strong consumption in Q1. We experienced double-digit consumption growth in many domestic categories, especially gummy vitamins, pregnancy test kits, women’s electric grooming, battery toothbrush, and toothache. The double-digit gummy vitamin growth is on top of strong growth a year ago. Existing households are consuming more vitamins and household penetration of gummy vitamins has increased. In our International business despite many countries experiencing lockdowns, organic revenues grew
“In the first quarter, many key raw materials were in short supply due to the Texas freeze and container shortages. We continued to serve our customers thanks to the efforts of our Supply Chain and R&D teams. Raw material and transportation costs began rising in February and these cost pressures were further exacerbated due to the Texas freeze causing prices to spike further. We expect the tight supply and higher input costs to continue for the balance of the year. We have announced pricing actions in laundry and in our International businesses and also plan to reduce promotional spending to help mitigate increased costs.”
First Quarter Review
Consumer Domestic net sales were
Consumer International net sales were
Specialty Products net sales were
Gross margin decreased 120 basis points to
Marketing expense was
Selling, general, and administrative expense (SG&A) was
Income from Operations was
Other Expense of
The effective tax rate was
Operating Cash Flow
For the first three months of 2021, cash from operating activities decreased
At March 31, 2021, cash on hand was
2021 New Products
Mr. Farrell commented, “Innovation has been a hallmark of Church & Dwight’s success. We will continue to invest in new products and R&D to drive long-term revenue and earnings growth and to meet consumer needs. We are very excited about our new product launches.
“In the household products portfolio, we are introducing OXICLEAN Laundry and Home Sanitizer. It is the first and only sanitizing product that consumers add directly to the washing machine with their regular detergent, that boosts stain fighting and eliminates
“In the personal care portfolio, WATERPIK launched WATERPIK IONTM, a water flosser which is
Outlook for 2021
Mr. Farrell stated, “We are off to a strong start. We continue to expect 2021 to be another strong year with adjusted EPS of
Mr. Farrell continued, “Our revenue picture continues to strengthen. We now expect full year 2021 reported sales growth to be 5
“Raw material and transportation costs began rising in Q1. The Texas freeze in March exacerbated the situation causing costs to spike. As a result, we expect an incremental
“For Q2, we expect reported sales growth of approximately
¹ This press release does not provide a forward-looking reconciliation of adjusted EPS to reported EPS and adjusted operating margin to reported operating margin, the most directly comparable GAAP financial measures, expected for 2021 or the second quarter of 2021, because we are unable to provide such a reconciliation without unreasonable effort. We have excluded the changes in the Company’s potential earn-out liability from our acquisition of the FLAWLESS business from our expected adjusted EPS and adjusted operating margin for these periods. We are required to review the fair value of the earn-out liability quarterly based on changes in sales forecasts, discount rates, volatility assumptions, and other inputs. Our inability to provide a reconciliation to GAAP EPS and operating margin for future periods is due to the uncertainty and inherent difficulty of predicting what these changes will be on a quarter-by-quarter basis or on an annual basis. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to our future results.
² See non-GAAP reporting reconciliations included at the end of this release.
Church & Dwight Co., Inc. (NYSE: CHD) will host a conference call to discuss first quarter 2021 results on April 29, 2021 at 10:00 a.m. (ET). To participate, dial 877-322-9846 within the U.S. and Canada, or 631-291-4539 internationally, using access code 8464778. A replay will be available at 855-859-2056 using the same access code through the close of business on May 6, 2021. You also can participate via webcast by visiting the Investor Relations section of the Company’s website at www.churchdwight.com.
Church & Dwight Co., Inc. (NYSE: CHD) founded in 1846, is the leading U.S. producer of sodium bicarbonate, popularly known as baking soda. The Company manufactures and markets a wide range of personal care, household, and specialty products under recognized brand names such as ARM & HAMMER®, TROJAN®, OXICLEAN®, SPINBRUSH®, FIRST RESPONSE®, NAIR®, ORAJEL®, XTRA®, L’IL CRITTERS® and VITAFUSION®, BATISTE®, WATERPIK®, FLAWLESS®, and ZICAM®. These thirteen key brands represent approximately
Church & Dwight has a strong heritage of commitment to people and the planet. In the early 1900’s, we began using recycled paperboard for all packaging of household products. Today, virtually all our paperboard packaging is from certified, sustainable sources. In 1970, the ARM & HAMMER® brand introduced the first nationally distributed, phosphate-free detergent. That same year, Church & Dwight was honored to be the sole corporate sponsor of the first annual Earth Day. In 2020, our continued progress earned public recognition, including the 2020 Newsweek’s Most Sustainable Companies list, the EPA’s Green Power Partnership Top 100 list, the 2020 Forbes Magazine: Americas Best-in-State Employer Award and the FTSE4Good Index Series.
For more information, see the Church & Dwight 2020 Sustainability Report at:
https://churchdwight.com/responsibility/
This press release contains forward-looking statements, including, among others, statements relating to net sales and earnings growth; the impact of the COVID-19 pandemic and the Company’s response; gross margin changes; trade, marketing, and SG&A spending; sufficiency of cash flows from operations; earnings per share; cost savings programs; consumer demand and spending; the effects of competition; the effect of product mix; volume growth, including the effects of new product launches into new and existing categories; the impact of acquisitions (including earn-outs); and capital expenditures. Other forward-looking statements in this release may be identified by the use of such terms as “may,” “could,” “expect,” “intend,” “believe,” “plan,” “estimate,” “forecast,” “project,” “anticipate,” “to be,” “to make” or other comparable terms. These statements represent the intentions, plans, expectations and beliefs of the Company, and are based on assumptions that the Company believes are reasonable but may prove to be incorrect. In addition, these statements are subject to risks, uncertainties and other factors, many of which are outside the Company’s control and could cause actual results to differ materially from such forward-looking statements. Factors that could cause such differences include a decline in market growth, retailer distribution and consumer demand (as a result of, among other things, political, economic and marketplace conditions and events); including those relating to the outbreak of contagious diseases; other impacts of the COVID-19 pandemic and its impact on the Company’s operations, customers, suppliers, employees, and other constituents, and market volatility and impact on the economy (including causing recessionary conditions), resulting from nationwide or local or regional outbreaks or increases in infections and the risk that the Company will not be able to successfully execute its response plans with respect to the pandemic or localized outbreaks and the corresponding uncertainty; the impact of regulatory changes or policies associated with the COVID-19 pandemic, including continuing or renewed shutdowns of retail and other businesses in various jurisdictions; the impact of the CARES Act and other governmental actions; the impact of continued shifts in consumer behavior, including accelerating shifts to online shopping; unanticipated increases in raw material and energy prices; delays or other problems in manufacturing or distribution; increases in transportation costs; the impact of inclement weather on raw material and transportation costs; adverse developments affecting the financial condition of major customers and suppliers; changes in marketing and promotional spending; growth or declines in various product categories and the impact of customer actions in response to changes in consumer demand and the economy, including increasing shelf space of private label products; consumer and competitor reaction to, and customer acceptance of, new product introductions and features; the Company’s ability to maintain product quality and characteristics at a level acceptable to our customers and consumers; disruptions in the banking system and financial markets; foreign currency exchange rate fluctuations; implications of the United Kingdom’s withdrawal from the European Union; transition to, and shifting economic policies in the United States; potential changes in export/import and trade laws, regulations and policies of the United States and other countries, including any increased trade restrictions or tariffs, including the actual and potential effect of tariffs on Chinese goods imposed by the United States; issues relating to the Company’s information technology and controls; the impact of natural disasters on the Company and its customers and suppliers, including third party information technology service providers; the integration of acquisitions or divestiture of assets; the outcome of contingencies, including litigation, pending regulatory proceedings and environmental matters; and changes in the regulatory environment.
For a description of additional factors that could cause actual results to differ materially from the forward-looking statements, please see Item 1A, “Risk Factors” in the Company’s annual report on Form 10-K and quarterly reports on Form 10Q. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the U.S. federal securities laws. You are advised, however, to consult any further disclosures the Company makes on related subjects in its filings with the United States Securities and Exchange Commission.
This press release also contains non-GAAP financial information. Management uses this information in its internal analysis of results and believes that this information may be informative to investors in gauging the quality of the Company’s financial performance, identifying trends in its results and providing meaningful period-to-period comparisons. The Company has included reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP. See the end of this press release for these reconciliations. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP financial measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read in connection with the Company’s financial statements presented in accordance with GAAP.
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
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Three Months Ended |
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(In millions, except per share data) |
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March 31, 2021 |
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March 31, 2020 |
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Net Sales |
|
$ |
1,238.9 |
|
|
$ |
1,165.2 |
|
Cost of sales |
|
|
688.0 |
|
|
|
633.2 |
|
Gross Profit |
|
|
550.9 |
|
|
|
532.0 |
|
Marketing expenses |
|
|
98.7 |
|
|
|
96.4 |
|
Selling, general and administrative expenses |
|
|
149.6 |
|
|
|
121.0 |
|
Income from Operations |
|
|
302.6 |
|
|
|
314.6 |
|
Equity in earnings of affiliates |
|
|
2.6 |
|
|
|
1.6 |
|
Other income (expense), net |
|
|
(14.2 |
) |
|
|
(16.8 |
) |
Income before Income Taxes |
|
|
291.0 |
|
|
|
299.4 |
|
Income taxes |
|
|
70.3 |
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FAQ
What were Church & Dwight's net sales for Q1 2021?
Church & Dwight reported net sales of $1,238.9 million for Q1 2021.
How much did the EPS decline in Q1 2021 for CHD?
The EPS for Church & Dwight decreased by 4.3% to $0.88 in Q1 2021.
What is the organic sales growth rate reported by CHD?
Organic sales for Church & Dwight grew 4.9% in Q1 2021.
What are the expectations for CHD's gross margin in Q2 2021?
CHD expects a gross margin contraction of 350 basis points in Q2 2021.
How has Church & Dwight's online sales performed recently?
Online sales increased by 54%, making up 14.8% of total sales in Q1 2021.
Church & Dwight Co., Inc.
NYSE:CHDCHD RankingsCHD Latest NewsCHD Stock Data
25.09B
244.52M
0.17%
89.76%
1.9%
Household & Personal Products
Soap, Detergents, Cleang Preparations, Perfumes, Cosmetics
United States of America
EWING
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