Church & Dwight Co., Inc. (CHD) is a leading developer, manufacturer, and marketer of a diverse portfolio of consumer household and personal care products, as well as specialty products focused on animal and food production, chemicals, and cleaners. The company's well-recognized brands include ARM & HAMMER®, OXICLEAN®, VITAFUSION®, L'IL CRITTERS®, BATISTE®, WATERPIK®, THERABREATH®, and HERO®, among others.

Financials

In the fiscal year 2023, Church & Dwight reported annual net income of $755.6 million and annual revenue of $5,867.9 million. The company also generated annual operating cash flow of $1,030.6 million and annual free cash flow of $807.1 million, showcasing its strong financial performance and liquidity position.

Business Overview

The company operates in three principal segments: Consumer Domestic, Consumer International, and Specialty Products Division (SPD). The Consumer Domestic segment, which accounts for the majority of the company's revenue, includes household and personal care products. The Consumer International segment primarily focuses on personal care products, while the SPD segment specializes in chemicals and animal and food production products.

First Quarter 2024 Results

In the first quarter of 2024, Church & Dwight reported strong financial results, with net sales increasing by 5.1% to $1,503.3 million compared to the same period in the prior year. This growth was driven by a 5.2% increase in organic sales, with volume accounting for 70% of the growth. The company's gross margin expanded by 220 basis points to 45.7%, reflecting the benefits of productivity programs, favorable pricing and mix, and lower transportation costs, partially offset by higher manufacturing costs.

Segment Performance

The Consumer Domestic segment delivered 4.3% organic sales growth in the first quarter, with 3.3% coming from volume. The segment's income before income taxes increased by $10.5 million, driven by higher sales volumes, the impact of productivity programs, and favorable pricing and mix, partially offset by higher marketing and SG&A expenses.

The Consumer International segment reported 10.6% organic sales growth in the first quarter, with 5.4% from volume and 5.2% from pricing and mix. The segment's income before income taxes increased by $4.1 million, primarily due to favorable pricing and mix, higher sales volumes, and favorable foreign exchange rates, partially offset by higher SG&A and marketing expenses.

The Specialty Products Division (SPD) segment achieved 1.0% organic sales growth in the first quarter, with 3.0% from volume and 4.2% from pricing and mix, partially offset by the exit of a product line. The segment's income before income taxes increased by $4.0 million, driven by favorable pricing and mix and higher sales volumes, partially offset by unfavorable manufacturing costs.

Outlook

Looking ahead, Church & Dwight has provided guidance for the full year 2024. The company expects reported and organic sales growth to be approximately 4% to 5%. The company has also raised its full-year EPS growth outlook to 8% to 9%, up from the previous range of 7% to 9%, reflecting the strong first-quarter performance and expectations for continued growth.

Growth Strategy

The company's growth strategy is centered around its portfolio of well-recognized brands, with a focus on innovation, international expansion, and strategic acquisitions. Recent acquisitions, such as the 2022 acquisition of Hero Cosmetics, have strengthened the company's presence in the personal care and acne treatment categories.

Liquidity

Church & Dwight's financial position remains strong, with a healthy balance sheet and ample liquidity. As of March 31, 2024, the company had $349.7 million in cash and cash equivalents and approximately $1.5 billion available through its revolving credit facility and commercial paper program. The company's cash flow generation has enabled it to fund capital expenditures, pay dividends, and pursue strategic acquisitions.

Conclusion

Overall, Church & Dwight's diverse portfolio of leading consumer brands, focus on innovation, and strong financial performance make it a compelling investment opportunity in the consumer household and personal care products industry.