01—Abstract
Summary
Summary of the 10-Q filed May 1, 2025. Cited figures are marked; the original filing is the authoritative source.
Church & Dwight Co., Inc. (CHD) reported a decrease in net sales for the first quarter of 2025, down 2.4% to $1.47 billiona compared to the prior year.
This decline was primarily driven by lower product volumes, particularly in the Consumer Domestic segment, though partially offset by favorable pricing and mix in certain segments and growth in the Consumer International segment. Gross profit also decreased by 4.0%b, and gross margin contracted by 70 basis points due to higher manufacturing costs, despite productivity gains. Despite the top-line softness, the company maintained solid operating income and is actively managing its operations and strategic direction.
A significant development is the announced strategic actions for the Flawless, Spinbrush, and Waterpik showerhead businesses, which are expected to result in a charge between $60c-80 million in Q2 2025. This move signals a focus on streamlining operations and potentially divesting underperforming or non-core assets. The company also reported an increase in cash and cash equivalents, providing a strong liquidity position and flexibility for future capital allocation.
02—Key points
Key Highlights
- Net sales decreased by 2.4% to $1,467.1 million in Q1 2025 compared to Q1 2024, primarily due to lower product volumes.
- Gross profit decreased by 4.0% to $659.6 million, with gross margin declining by 70 basis points to 45.0% due to increased manufacturing costs.
- Income from operations decreased slightly by 3.2% to $295.3 million.
- Diluted EPS decreased by 4.3% to $0.89 per share.
- The company announced strategic actions for the Flawless, Spinbrush, and Waterpik showerhead businesses, expected to incur a $60-80 million charge in Q2 2025.
- Cash and cash equivalents increased to $1,074.5 million as of March 31, 2025, up from $964.1 million at the end of 2024.
- The company maintained its dividend, increasing the quarterly dividend to $0.295 per share in January 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Church & Dwight Co Inc kept $0.15.
- Revenue$1.47B100.0%
- Cost of revenue−$807.5M55.0%
- Gross profit$659.6M45.0%
- Operating costs−$364.3M24.8%
- Operating income$295.3M20.1%
- Interest, other & tax−$75.2M5.1%
- Net income$220.1M15.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed May 1, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $1.47B$1.50B | −2.4% |
| Cost of Revenue | $807.50M$816.30M | −1.1% |
| Gross Profit | $659.60M$687.00M | −4.0% |
| R&D Expenses | $32.80M$30.10M | +9.0% |
| SG&A Expenses | $227.70M$230.00M | −1.0% |
| Operating Income | $295.30M$305.00M | −3.2% |
| Interest Expense | $23.30M$25.00M | −6.8% |
| Net Income | $220.10M$227.70M | −3.3% |
| EPS (Basic) | $0.90$0.94 | −4.3% |
| EPS (Diluted) | $0.89$0.93 | −4.3% |
| Shares Outstanding (Basic) | 245.80M243.40M | +1.0% |
| Shares Outstanding (Diluted) | 248.00M246.10M | +0.8% |
05—Questions
Frequently Asked Questions
What drove the decrease in net sales?
Net sales decreased by 2.4% to $1,467.1 million in the first quarter of 2025 compared to the prior year. This was primarily due to a decrease in product volumes sold, especially in the Consumer Domestic segment, partially offset by favorable pricing/product mix and growth in the Consumer International segment. Foreign exchange rate fluctuations also contributed to the decrease.
What is the impact of the announced strategic actions on the Flawless, Spinbrush, and Waterpik showerhead businesses?
Church & Dwight announced strategic actions for these businesses, which generate approximately $150.0 million in annual net sales. The company expects to record a charge of $60.0 to $80.0 million in the second quarter of 2025. This charge will primarily consist of non-cash impairments of intangible and fixed assets, along with inventory reserves, indicating a streamlining of operations or potential divestitures.
How did the company's profitability fare in the quarter?
Gross profit decreased by 4.0% to $659.6 million, and gross margin compressed by 70 basis points to 45.0%. This compression was mainly due to higher manufacturing costs (labor and commodities), partially offset by productivity programs and favorable price/mix. Income from operations saw a slight decrease of 3.2% to $295.3 million, and diluted Earnings Per Share (EPS) decreased by 4.3% to $0.89.
What is the company's liquidity position?
Church & Dwight maintains a strong liquidity position. As of March 31, 2025, cash and cash equivalents stood at $1,074.5 million, an increase from the previous quarter. The company also has substantial availability through its revolving credit facility and commercial paper program, indicating financial flexibility.
06—Continue