Summary
Church & Dwight Co., Inc. (CHD) demonstrated robust net sales growth of 9.8% in 2018, reaching $4.15 billion, driven by strong performance across its Consumer Domestic and International segments, notably boosted by the Waterpik acquisition. Despite this top-line growth, the company experienced a decline in diluted earnings per share (EPS) to $2.27 from $2.90 in the prior year. This decrease was significantly influenced by a $0.91 EPS impact from the Tax Cuts and Jobs Act in the prior year and increased commodity, transportation, and manufacturing costs which compressed gross margins. The company continues to focus on its eleven "power brands," which represent a significant portion of its sales. Strategic initiatives include maintaining marketing and trade spending, controlling costs, launching new products, and pursuing strategic acquisitions. The company also returned approximately $413.3 million to stockholders through dividends and share repurchases, underscoring a commitment to shareholder value. However, the company faces ongoing pricing pressures from competitors and retailers, and its substantial debt load, while managed through a revolving credit facility, warrants investor attention.
Financial Highlights
55 data points| Revenue | $4.15B |
| Cost of Revenue | $2.31B |
| Gross Profit | $1.84B |
| R&D Expenses | $89.70M |
| SG&A Expenses | $565.90M |
| Operating Income | $791.70M |
| Interest Expense | $79.40M |
| Net Income | $568.60M |
| EPS (Basic) | $2.32 |
| EPS (Diluted) | $2.27 |
| Shares Outstanding (Basic) | 245.50M |
| Shares Outstanding (Diluted) | 250.70M |
Key Highlights
- 1Net sales increased by 9.8% to $4.15 billion in 2018, driven by acquisitions (Waterpik, Passport) and organic growth in key brands.
- 2Diluted EPS decreased to $2.27 in 2018 from $2.90 in 2017, impacted by higher costs and the prior year's tax benefits.
- 3Gross margin declined by 140 basis points due to increased commodity, transportation, and manufacturing costs, partially offset by productivity gains.
- 4The company returned $413.3 million to stockholders through dividends and share repurchases in 2018.
- 5Walmart remains the largest customer, accounting for 23% of net sales in 2018, highlighting customer concentration risk.
- 6The Specialty Products Division (SPD) experienced a slight decline in net sales due to lower volumes in animal productivity products.
- 7The company successfully managed its liquidity, with $316.7 million in cash and cash equivalents and significant availability under its credit facility at year-end 2018.