In This Article:
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Reported Sales Growth: 3.8%, exceeding the 2.5% outlook.
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Organic Sales Growth: 4.3%, with volume contributing 3.1%.
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Adjusted Gross Margin: Expanded by 60 basis points to 45%.
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Adjusted EPS: $0.79, $0.12 higher than the $0.67 outlook.
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Online Sales: Approximately 21% of global sales.
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US Business Organic Sales Growth: 3.3%, with volume growth of 2.6%.
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International Organic Growth: 8.1% in Q3.
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Specialty Products Organic Sales Growth: 7.5% in Q3.
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Cash from Operating Activities: $864 million for the first nine months of 2024.
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CapEx: $125 million for the first nine months, with a full-year expectation of $180 million.
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Full Year Organic Revenue Outlook: Approximately 4%.
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Full Year Reported Sales Growth: Approximately 3.5%.
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Full Year Adjusted EPS Growth: Approximately 8%.
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Full Year Gross Margin Expansion: Expected to be approximately 110 basis points.
Release Date: November 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Church & Dwight Co Inc (NYSE:CHD) reported a 3.8% sales growth in Q3, surpassing their outlook of 2.5%.
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Organic sales grew by 4.3%, exceeding the 3% Q3 outlook, with volume growth contributing 3.1%.
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Adjusted gross margin expanded by 60 basis points, indicating improved profitability.
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The company gained market share in the majority of its categories, showcasing competitive strength.
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International business delivered strong organic growth of 8.1%, aligning with their growth algorithm.
Negative Points
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The gummy vitamins business continues to be a drag, with consumption down 10% and a $357 million write-down of assets.
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Increased promotional levels in the litter category, driven by a major competitor, could impact profitability.
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The company remains cautious about US consumer and category growth rates for Q4, indicating potential market challenges.
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Higher manufacturing costs offset some of the gross margin gains, posing a challenge to cost management.
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The vitamin business impairment reflects reduced expectations for long-term growth and profit, indicating ongoing struggles.
Q & A Highlights
Q: Can you provide insights into the Q4 outlook and any inventory timing dynamics affecting it? A: Richard Dierker, CFO, stated that there are no significant inventory timing issues impacting Q3 or Q4. Matthew Farrell, CEO, noted a deceleration in category growth, which is why they remain cautious about the economy and expect Q4 to reflect similar trends.
Q: How confident are you in achieving the US business's 4% topline growth objective? A: Matthew Farrell, CEO, clarified that the US growth target is 3%, with international at 8% and specialty products at 5%. He expressed confidence in achieving these targets based on the strength of their brands and innovation pipeline.