Church & Dwight Q2 Earnings Beat Estimates, Volumes Fuel Organic Sales

Church & Dwight Co., Inc. CHD reported second-quarter 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate. While net sales decreased, earnings increased from the year-ago period’s actuals.Quarterly adjusted earnings per share (EPS) of 94 cents beat the Zacks Consensus Estimate of 85 cents. The bottom line also increased 1% year over year.Church & Dwight Co., Inc. Price, Consensus and EPS Surprise Church & Dwight Co., Inc. price-consensus-eps-surprise-chart | Church & Dwight Co., Inc. QuoteTaking a Closer Look at CHD’s Q2 ResultsNet sales of $1,506.3 million fell 0.3% year over year but beat the Zacks Consensus Estimate of $1,480 million. Organic sales gained 0.1%, driven by a 0.8% increase in volume, partially offset by a 0.7% decline from pricing and mix.Momentum with the e-commerce unit continued in the second quarter, with global online sales accounting for 23% of the total consumer sales in the quarter.Church & Dwight’s gross margin contracted 410 basis points (bps) to 43%. The adjusted gross margin was 45%, down 40 bps year over year, due to higher manufacturing costs including tariffs, Zicam/Orajel recall costs, promotional pricing and product mix, somewhat offset by enhanced productivity programs and high-margin acquisitions. We expected an adjusted gross margin of 43.8% in the quarter.Marketing expenses increased $4.7 million year over year to $157.1 million. Adjusted selling, general, and administrative (SG&A) expenses, as a percentage of net sales, decreased 80 bps to 13.6%.CHD Provides Insights by SegmentConsumer Domestic: Net sales in the segment dipped 1.4% to $1,154.1 million. Organic sales fell 1% due to a price and product mix drop of 1.1% partially offset by a higher volume rise of 0.1%. Our estimate for the segment’s organic sales for the quarter was 3% decline. The company saw strength in HERO acne products, ARM & HAMMER Liquid Detergent, ARM & HAMMER Cat Litter and THERABREATH mouthwash, offset by softness in the vitamin business, OXICLEAN stain removers.Consumer International: Net sales in the segment jumped 5.3% to $277.6 million. Organic sales climbed 4.8% compared with our expectation of a 4.5% rise. This was driven by volume growth of 4.7% and a price and product mix rise of 0.1%. Sales growth was fueled by HERO, THERABREATH and FEMFRESH, as well as broad-based across all the international markets.Specialty Products: Sales in the segment declined 3% to $74.6 million, including the impact of exiting the Megalac and food safety business. Organic sales grew 0.1%, driven by a price and product mix rise of 2.8%, partially offset by a lower volume drop of 2.7%. Our model anticipated the segment’s organic sales growth to be flat.CHD’s Financial HealthThis Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $923.2 million and long-term debt of $2,205.8 million. For the first six months of 2025, cash from operations totaled $416.5 million. Capital expenditures were $39 million in the same time frame.CHD expects about $130 million in capital expenditures for 2025. Church & Dwight expects cash flow from operations of $1.05 billion.What to Expect From CHDIn an environment of economic uncertainty, management is focused on growing the market share across the company’s portfolio. CHD’s sequential improvements in category growth are encouraging and the consumption of its brands will outpace category growth over time, supported by brand investments and innovation. The company’s outlook indicates strong underlying operating fundamentals consistent with its Evergreen model.For 2025, the company expects organic sales growth of around 0-2%, which includes contributions from the Touchland acquisition and the impact of lower sales from businesses being exited. Organic sales growth is also predicted at 0-2%. While category consumption has improved, there remains uncertainty in the U.S. consumer environment and the global economy.The company anticipates a full-year reported gross margin of 44%, including costs associated with the three business exits. Adjusted gross margin is expected to contract 60 basis points compared with 2024, as tariffs, elevated input costs and unfavorable price/mix are expected to outpace incremental productivity gains and higher-margin acquisition benefits. Marketing as a percentage of sales is expected to represent approximately 11%, as the company continues to invest in brands and innovation.For 2025, CHD continues to anticipate SG&A, as a percentage of sales, to be lower than the actuals of 2024. The company expects to make investments, particularly in ecommerce and International. It expects other expenses to be nearly $65 million. The tax rate is likely to be 23%. Hence, management predicts adjusted EPS growth of 0-2%. This guidance includes the Touchland acquisition, costs related to a product recall and the wind down of the three exited brands.For the third quarter, the company anticipates reported and organic sales growth of approximately 1-2%, along with an adjusted gross margin contraction of about 100 basis points. This decline is attributed to inflation, tariff costs, lower margins from exited businesses and increased marketing investments. Adjusted EPS for the third quarter is expected to be 72 cents per share, representing a 9% decrease from the prior year period.CHD stock has gained 1.3% in the past three months against the industry’s 4.3% decline.Image Source: Zacks Investment ResearchStocks to ConsiderPost Holdings, Inc. POST operates as a consumer-packaged goods holding company in the United States and internationally. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The consensus estimate for Post Holdings’ current fiscal-year sales and earnings indicates growth of 2.7% and 7.3%, respectively, from the prior-year levels. POST delivered a trailing four-quarter earnings surprise of 22.9%, on average.The Chefs' Warehouse, Inc. CHEF distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. It currently carries a Zacks Rank of 2 (Buy). CHEF delivered a trailing four-quarter earnings surprise of 11.3%, on average.The Zacks Consensus Estimate for The Chefs' Warehouse’s current fiscal-year sales and earnings indicates growth of 6.4% and 19.1%, respectively, from the prior-year levels.Nomad Foods NOMD, which manufactures frozen foods, holds a Zacks Rank # 2 at present. NOMD delivered a trailing four-quarter earnings surprise of 3.2%, on average. The Zacks Consensus Estimate for Nomad Foods’ current financial-year sales and earnings implies growth of 8.6% and 10.4%, respectively, from the year-ago number.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Church & Dwight Co., Inc. (CHD): Free Stock Analysis Report The Chefs' Warehouse, Inc. (CHEF): Free Stock Analysis Report Post Holdings, Inc. (POST): Free Stock Analysis Report Nomad Foods Limited (NOMD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks