Church & Dwight Earns 57 Cents per Share

Church & Dwight (CHD) reported Q4 earnings of 57 cents per share which was a penny below estimates. For the year, CHD earned $2.27 per share. For the year, organic sales rose 4.3% which beat the company’s forecast of 4.0%.

Matthew Farrell, Chief Executive Officer, commented, “Q4 organic sales growth of 4.3% was exceptionally strong and exceeded our 3% outlook. Q4 was the third consecutive quarter of greater than 4% organic growth and the second consecutive quarter of positive price and product mix (+1.6%). The Consumer Domestic business posted strong volume growth in Q4 and positive pricing as the promotional environment continued to improve. Our categories continue to grow and our market shares are healthy. Eleven of our 14 domestic categories grew during the quarter and more than half have grown for at least 5 consecutive quarters. In the domestic business, 7 out of 11 power brands met or exceeded category growth in 2018. In the International business, we exceeded our 6% organic growth target for the fourth consecutive year in 2018.

“Compelling new product launches and investments will drive 2019 organic sales growth of approximately 3.5%. Price increases announced on approximately 30% of the portfolio contribute to gross margin expansion in 2019. These pricing actions did not hit retailer shelves until late Q4 and had minimal impact on Q4 results. Additional pricing actions are currently being discussed with retailers. The investments in our International business continue to pay off, particularly export and our Asia Pacific partnerships. We are entering 2019 with momentum.”

For Q4, organic sales rose by 4.3% which beat their outlook of 3%.

Gross margin in the fourth quarter was lower than expected due to the household business growing faster than expected and U.S. tariffs, the impact of which has been addressed with the announcement of 2019 price increases. The incremental marketing spend, higher incentive compensation, and U.S. tariffs were offset by a lower tax rate.

The company also boosted its quarterly dividend from 21.75 cents per share to 22.75 cents per share. That’s a 4.6% increase. That’s the 23rd annual dividend increase in a row.

Update: The shares fell 7.51% in today’s session.

Posted by on February 5th, 2019 at 9:01 am


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