01—Abstract
Summary
Summary of the 10-K filed February 15, 2024. Cited figures are marked; the original filing is the authoritative source.
Church & Dwight Co., Inc. (CHD) reported robust net sales growth of 9.2% for the fiscal year ended December 31, 2023, reaching $5.87 billiona.
This growth was driven by a combination of favorable pricing/product mix (4.4%b), increased volumes (0.9%), and the impact of recent acquisitions (3.9%). The company also saw a significant improvement in profitability, with gross margin expanding by 220 basis points to 44.1% and operating margin increasing by 690 basis points to 18.0%, largely due to favorable price/volume/mix, productivity programs, and lower transportation costs. However, excluding a prior year impairment charge, operating margin saw a slight decrease, indicating increased marketing and SG&A expenses related to acquisitions and growth initiatives.
The company returned $566.6 millionc to stockholders through dividends and share repurchases in 2023. Despite facing competitive pressures and inflationary impacts, particularly on discretionary brands like Waterpik, Church & Dwight remains focused on strategic initiatives including cost control, online market share expansion, new product development, and strategic acquisitions to drive future growth. The company also announced a 4% increase in its quarterly dividend, signaling confidence in its financial performance and commitment to shareholder returns.
02—Key points
Key Highlights
- Net sales increased by 9.2% to $5.87 billion in 2023, driven by pricing, volume, and acquisitions.
- Gross margin improved by 220 basis points to 44.1% in 2023, supported by productivity gains and lower transportation costs.
- Operating margin significantly improved to 18.0% in 2023, compared to 11.1% in the prior year, though this was influenced by a prior year impairment charge.
- The company returned $566.6 million to shareholders through dividends and share repurchases in 2023.
- Consumer Domestic sales grew by 10.7%, driven by strong performance in brands like TheraBreath and Arm & Hammer.
- Consumer International sales increased by 8.9%, with notable contributions from brands like Sterimar and TheraBreath.
- The company announced a 4% increase in its quarterly dividend, signaling confidence in future financial performance.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Church & Dwight Co Inc kept $0.13.
- Revenue$5.87B100.0%
- Cost of revenue−$3.28B55.9%
- Gross profit$2.59B44.1%
- Operating costs−$1.53B26.1%
- Operating income$1.06B18.0%
- Interest, other & tax−$301.8M5.1%
- Net income$755.6M12.9%
Where FY2023 revenue went
$5.87B- Cost of revenue: $3.28B, 56% of revenue
- SG&A: $889.8M, 15% of revenue
- Net income: $755.6M, 13% of revenue
- R&D: $122.4M, 2.1% of revenue
- Other operating costs: $518.9M, 8.8% of revenue
- Interest, other & tax: $301.8M, 5.1% of revenue
Kept 13% as net incomeR&D $122.4M · 2.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 15, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $5.87B$5.38B | +9.2% |
| Cost of Revenue | $3.28B$3.13B | +4.9% |
| Gross Profit | $2.59B$2.25B | +15.0% |
| R&D Expenses | $122.40M$110.00M | +11.3% |
| SG&A Expenses | $889.80M$706.00M | +26.0% |
| Operating Income | $1.06B$597.80M | +76.9% |
| Interest Expense | $110.90M$89.60M | +23.8% |
| Net Income | $755.60M$413.90M | +82.6% |
| EPS (Basic) | $3.09$1.70 | +81.8% |
| EPS (Diluted) | $3.05$1.68 | +81.5% |
| Shares Outstanding (Basic) | 244.90M242.90M | +0.8% |
| Shares Outstanding (Diluted) | 247.60M246.30M | +0.5% |
05—Questions
Frequently Asked Questions
What was Church & Dwight's net sales performance in 2023?
In 2023, Church & Dwight reported net sales of $5.87 billion, an increase of 9.2% compared to 2023. This growth was attributed to favorable pricing/product mix, increased volumes, and contributions from recent acquisitions.
How did the company's profitability change in 2023?
Profitability saw significant improvement in 2023. Gross margin increased by 220 basis points to 44.1%, and operating margin rose substantially to 18.0%, up from 11.1% in the prior year. This improvement was driven by favorable price/volume/mix, productivity programs, and lower transportation costs.
What is the company's strategy for dealing with increased competition and consumer spending shifts?
Church & Dwight is focusing on maintaining competitive marketing and trade spending, controlling costs, expanding online market share, and launching new, differentiated products. They also aim to grow global sales and offer a mix of premium and value brands to cater to a wide range of consumers, especially during economic uncertainty where discretionary spending may be reduced.
How did the company return value to shareholders in 2023?
In 2023, Church & Dwight returned $566.6 million to its stockholders through cash dividends and share repurchases. The company also announced a 4% increase in its regular quarterly dividend in January 2024, demonstrating a commitment to shareholder returns.
06—Continue