Baking Soda Maker Church & Dwight Beats Q2 Consensus, Boasts Strong Consumer Demand

Church & Dwight Co Inc CHD reported second-quarter (Q2) 2023 sales growth of 9.7% year-on-year to $1.45 billion, beating the consensus of $1.42 billion.

The Victorville, California-based company continues to experience strong consumer demand and a favorable product mix. Organic sales grew 5.4%.

Adjusted EPS of $0.92 beat the analyst consensus of $0.79.

Segments: Net sales from Consumer Domestic increased 12.3% Y/Y to $1.12 billion, Consumer International rose 4.9% to $241.9 million, and Specialty Products slipped 6.5% to $84.1 million.

The gross margin increased 270 basis points to 43.9% due to improved pricing, productivity, and the impact of the HERO acquisition, net of higher manufacturing costs.

Adjusted Income from Operations was $300.9 million or 20.6% of net sales (margin up 80 basis points vs prior year).

The company exited the quarter with cash and equivalents worth $396.9 million. Long-Term Debt as of quarter-end was $2.4 billion.

Outlook: Church & Dwight raised FY23 adjusted EPS forecast To $3.15, representing 6% growth (Prior View: 2%-4%). The consensus stands at $3.11.

The company increased its FY23 net sales growth outlook from 6%-7% to ~8%. 

CHD boosted FY23 organic sales growth guidance from 3%-4% to ~5%.

The company projects the full-year gross margin to expand by approximately 200 basis points (prior view: 120 bps).

CHD predicts a double-digit percentage increase in gross profit in FY23.

Price Action: CHD shares are trading higher by 1.79% at $97.67 on the last check Friday.

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