10-QPeriod: Q1 FY2024

CHURCH & DWIGHT CO INC /DE/ Quarterly Report for Q1 Ended Mar 31, 2024

Filed May 2, 2024For Securities:CHD

Summary

Church & Dwight Co., Inc. (CHD) reported a solid first quarter of 2024, demonstrating growth in net sales and profitability. Net sales increased by 5.1% to $1,503.3 million, driven by favorable pricing/product mix and volume increases across all segments. The company also saw a significant improvement in gross margin, up 220 basis points, attributed to productivity gains and lower transportation costs, which more than offset increased manufacturing and commodity expenses. Net income saw a healthy increase of 13.4% to $227.7 million, leading to diluted EPS of $0.93, up from $0.82 in the prior year. The company generated strong operating cash flow of $263.0 million. Management has also demonstrated a commitment to shareholder returns, increasing the quarterly dividend and having substantial availability under its share repurchase program. The acquisition of Graphico in Japan is expected to further expand the company's presence in the APAC region.

Financial Highlights

53 data points
Beta

Revenue

$1.50B

45.7% Gross Margin

Net Income

$227.70M

15.1% Net Margin

EPS (Diluted)

$0.93

Total Assets

$8.56B

Cash & Equivalents

$349.70M

Free Cash Flow

$216.70M

Financial Statements
Beta
Revenue$1.50B
Cost of Revenue$816.30M
Gross Profit$687.00M
R&D Expenses$30.10M
SG&A Expenses$230.00M
Operating Income$305.00M
Interest Expense$25.00M
Net Income$227.70M
EPS (Basic)$0.94
EPS (Diluted)$0.93
Shares Outstanding (Basic)243.40M
Shares Outstanding (Diluted)246.10M

Key Highlights

  • 1Net sales grew 5.1% year-over-year to $1,503.3 million, driven by volume increases and favorable pricing/product mix across all segments.
  • 2Gross margin improved significantly, expanding by 220 basis points to 45.7% due to productivity programs and lower transportation costs.
  • 3Net income increased by 13.4% to $227.7 million, resulting in diluted EPS of $0.93, up from $0.82 in the prior year.
  • 4Operating income increased by 4.5% to $305.0 million, although operating margin slightly decreased by 10 basis points.
  • 5The company generated robust operating cash flow of $263.0 million, despite a slight increase in the cash conversion cycle.
  • 6Marketing expenses increased significantly (24.3%) as a percentage of net sales, reflecting investments in new product introductions.
  • 7The company declared a 4% increase in its quarterly dividend, demonstrating confidence in its financial performance and commitment to shareholders.

Frequently Asked Questions

Net sales grew by 5.1% to $1,503.3 million, primarily driven by a 3.7% increase in product volumes sold and a 1.5% favorable impact from pricing and product mix across all three reporting segments (Consumer Domestic, Consumer International, and Specialty Products Division).

Gross margin showed a strong improvement, increasing by 220 basis points to 45.7% compared to 43.5% in the prior year's quarter. This improvement was a result of favorable price/mix/volume, productivity programs, and lower transportation costs, which more than offset higher manufacturing and commodity expenses.

Church & Dwight continues to prioritize shareholder returns. They increased their regular quarterly dividend by 4% to $0.28375 per share. Additionally, as of March 31, 2024, they had $658.9 million of availability remaining under their 2021 Share Repurchase Program, indicating a potential for continued share buybacks.

Marketing expenses increased by 24.3% to $152.0 million, representing 10.1% of net sales, up from 8.6% in the prior year. This increase is attributed to higher marketing spend to support new product introductions. Selling, General & Administrative (SG&A) expenses also rose by 10.7% to $230.0 million, making up 15.3% of net sales, an increase of 80 basis points, due to growth investments in international operations and R&D.