10-QPeriod: Q2 FY2024

CHURCH & DWIGHT CO INC /DE/ Quarterly Report for Q2 Ended Jun 30, 2024

Filed August 2, 2024For Securities:CHD

Summary

Church & Dwight Co., Inc. (CHD) reported solid financial results for the second quarter and first half of 2024. Net sales increased by 3.9% year-over-year for the quarter to $1.51 billion and 4.5% for the first half to $3.01 billion, driven by volume increases across all segments and favorable pricing/product mix. The company demonstrated strong profit expansion, with gross profit increasing 11.5% and 14.7% for the quarter and half-year respectively. This was primarily due to a favorable tariff ruling, productivity initiatives, and improved price/mix, partially offset by higher manufacturing costs. The company successfully integrated the Graphico acquisition, contributing to international growth. Marketing expenses and SG&A saw increases to support new product introductions and international expansion. Despite these investments, operating income grew significantly, leading to a diluted EPS of $0.99 for the quarter, up from $0.89 in the prior year. Management highlighted increased cash and available credit, supporting continued operations, dividend payments, and potential share repurchases. The company reiterated its commitment to financial discipline and operational efficiency.

Financial Highlights

55 data points
Beta

Revenue

$1.51B

47.1% Gross Margin

Net Income

$243.50M

16.1% Net Margin

EPS (Diluted)

$0.99

Total Assets

$8.76B

Cash & Equivalents

$491.70M

Free Cash Flow

$206.60M

Financial Statements
Beta
Revenue$1.51B
Cost of Revenue$799.10M
Gross Profit$712.10M
R&D Expenses$33.00M
SG&A Expenses$222.80M
Operating Income$336.90M
Interest Expense$23.20M
Net Income$243.50M
EPS (Basic)$1.00
EPS (Diluted)$0.99
Shares Outstanding (Basic)244.30M
Shares Outstanding (Diluted)247.00M

Key Highlights

  • 1Net sales increased by 3.9% to $1.51 billion in Q2 2024 and 4.5% to $3.01 billion in H1 2024 compared to the prior year periods.
  • 2Gross profit increased by 11.5% to $712.1 million in Q2 2024 and 11.0% to $1.399 billion in H1 2024.
  • 3Gross margin expanded by 320 basis points to 47.1% in Q2 2024, driven by a favorable tariff ruling, productivity programs, and improved price/mix.
  • 4Income from operations rose by 14.7% to $336.9 million in Q2 2024 and 9.6% to $641.9 million in H1 2024.
  • 5Diluted Earnings Per Share (EPS) increased to $0.99 in Q2 2024 from $0.89 in Q2 2023.
  • 6The company acquired Graphico, Inc. for $19.9 million to expand its presence in the Asia-Pacific region.
  • 7Cash and cash equivalents increased to $491.7 million as of June 30, 2024, with approximately $1.495 billion available through credit facilities.

Frequently Asked Questions

The increase in net sales of 3.9% to $1.51 billion in the second quarter of 2024 was primarily driven by increased product volumes sold across all three segments (Consumer Domestic, Consumer International, and Specialty Products Division) and favorable pricing/product mix. This growth was partially offset by the exit of certain product lines and minimal impact from foreign exchange fluctuations.

The company's gross margin improved by 320 basis points to 47.1% in the second quarter of 2024 compared to the prior year. This improvement was mainly due to a favorable tariff ruling, the impact of productivity programs, and favorable price/mix/volume. These benefits were partially offset by higher manufacturing costs, including labor and commodities, and unfavorable foreign exchange rates.

Church & Dwight acquired Graphico, Inc. for $19.9 million to enhance its presence in the Asia-Pacific market. The acquisition is managed within the Consumer International segment. While the preliminary fair value of net assets acquired has been recorded, the impact was not material enough to present pro forma results. The acquisition is expected to contribute to future expansion in the region.

The company maintains strong liquidity with $491.7 million in cash and cash equivalents as of June 30, 2024, and approximately $1.495 billion in available credit facilities. They anticipate that cash from operations, combined with borrowing capacity, will be sufficient to fund operations, debt obligations, dividends, and capital expenditures. The company also has $658.9 million remaining under its share repurchase program authorization.