Church & Dwight Earned 52 Cents per Share

Church & Dwight (CHD) reported Q4 earnings today of 52 cents per share. The company had been expecting 50 cents per share. Organic sales rose 3.4% which was above CHD’s outlook of 2.5%. For the whole year, EPS rose 10% to $1.94 per share which also exceeded their outlook.

Matthew Farrell, Chief Executive Officer, commented, “Q4 organic sales growth exceeded our outlook in all three segments. Our Q4 category growth improved sequentially and year over year. The Consumer Domestic business had strong volume growth in Q4 while the promotional environment improved. In the domestic business, 7 out of 11 power brands exceeded category growth in 2017. The investments in our international business, particularly export, are paying off as evidenced by consistent organic growth which we expect to continue. In 2017, we made a great acquisition with Waterpik. Finally, we concluded the year with strong growth in our animal productivity business. We are hitting on all cylinders.”

Church & Dwight also raised their quarterly dividend by 14% from 19 cents to 21.75 cents per share. That makes the annual dividend 87 cents per share. Church & Dwight has paid a regular consecutive quarterly dividend for 117 years.

For 2018, CHD expects EPS to range between $2.24 and $2.28. That’s growth of 16 to 18%. Wall Street had been expecting $2.14 per share.

Mr. Farrell continued, “We expect sales growth of approximately 8% and organic sales growth of approximately 3%. We expect gross margin to be flat as productivity programs will offset rising commodity costs and product enhancements. While recent acquisitions require lower levels of marketing, we expect to increase our spending to sustain marketing at approximately 12% of sales. SG&A will increase as a percentage of sales largely due to recent acquisitions which have intangible amortization expenses, integration costs and higher levels of SG&A. The new tax law is expected to reduce our tax burden by lowering our effective tax rate to approximately 24-25% compared to 32% (excluding tax reform) for 2017. Our estimate is based on our current understanding of the new Tax Act which may change as regulations are finalized.

For Q1, Church & Dwight expects earnings of 61 cents per share, on organic sales growth of 2%. Wall Street had been expecting 56 cents per share for Q1.

Update: Church & Dwight closed higher by 2.35% today. It only one of two stocks in the entire S&P 500 that rose today.

Posted by on February 5th, 2018 at 8:47 am


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