Summary
Church & Dwight Co., Inc. (CHD) reported solid performance for the third quarter and first nine months of 2021, demonstrating revenue growth and operational improvements despite ongoing inflationary pressures and supply chain challenges. The company saw net sales increase by 5.7% in Q3 and 6.1% year-to-date, driven by a favorable price/mix and volume growth across most segments, particularly in Consumer International and Specialty Products. Despite headwinds from rising manufacturing and transportation costs, the company managed to increase operating income by 10.1% in Q3 and 7.6% year-to-date. This was aided by strategic reductions in marketing expenses and favorable adjustments related to business acquisition liabilities, though gross margins saw some compression due to inflation. Diluted EPS also showed improvement, up 8.2% in Q3 and 6.3% year-to-date. The company also announced a new, larger share repurchase program, signaling confidence in its financial health and commitment to returning value to shareholders.
Financial Highlights
54 data points| Revenue | $1.31B |
| Cost of Revenue | $732.20M |
| Gross Profit | $579.20M |
| R&D Expenses | $27.70M |
| SG&A Expenses | $116.90M |
| Operating Income | $301.40M |
| Interest Expense | $13.40M |
| Net Income | $230.40M |
| EPS (Basic) | $0.94 |
| EPS (Diluted) | $0.92 |
| Shares Outstanding (Basic) | 245 |
| Shares Outstanding (Diluted) | 250 |
Key Highlights
- 1Net sales increased by 5.7% to $1,311.4 million in Q3 2021 and by 6.1% to $3,821.4 million for the first nine months of 2021 compared to the prior year periods.
- 2Income from operations increased by 10.1% to $301.4 million in Q3 and by 7.6% to $902.7 million year-to-date, driven by sales growth and expense management.
- 3Gross margin decreased by 130 basis points in Q3 and 200 basis points year-to-date due to higher manufacturing and transportation costs, partially offset by favorable price/mix and productivity programs.
- 4SG&A expenses decreased by 3.0% in Q3 and 5.9% year-to-date, aided by favorable adjustments to business acquisition liabilities and lower incentive compensation.
- 5Diluted EPS rose by 8.2% to $0.92 in Q3 and by 6.3% to $2.68 for the first nine months of 2021.
- 6The company's Board authorized a new $1,000 million share repurchase program, replacing the previous $500 million program.
- 7Supply chain challenges and input cost inflation (manufacturing, commodities, transportation) are noted as significant ongoing concerns for the remainder of 2021 and into 2022.