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Household products company Church & Dwight (NYSE:CHD) reported results in line with analysts' expectations in Q2 CY2024, with revenue up 3.9% year on year to $1.51 billion. It made a non-GAAP profit of $0.93 per share, improving from its profit of $0.92 per share in the same quarter last year.
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Church & Dwight (CHD) Q2 CY2024 Highlights:
- Revenue: $1.51 billion vs analyst estimates of $1.51 billion (small miss)
- EPS (non-GAAP): $0.93 vs analyst estimates of $0.84 (10.1% beat)
- EPS (non-GAAP) Guidance for Q3 CY2024 is $0.67 at the midpoint, below analyst estimates of $0.85
- EPS (non-GAAP) Guidance for the full year is $3.44 at the midpoint, roughly in line with what analysts were expecting
- Gross Margin (GAAP): 47.1%, up from 43.9% in the same quarter last year
- Free Cash Flow of $283.2 million, up 30.7% from the previous quarter
- Organic Revenue rose 4.7% year on year, in line with the same quarter last year
- Sales Volumes were up 3.5% year on year
- Market Capitalization: $24.45 billion
Best known for its Arm & Hammer baking soda, Church & Dwight (NYSE:CHD) is a household and personal care products company with a vast portfolio that spans laundry detergent to toothbrushes to hair removal creams.
Household ProductsHousehold products stocks are generally stable investments, as many of the industry's products are essential for a comfortable and functional living space. Recently, there's been a growing emphasis on eco-friendly and sustainable offerings, reflecting the evolving consumer preferences for environmentally conscious options. These trends can be double-edged swords that benefit companies who innovate quickly to take advantage of them and hurt companies that don't invest enough to meet consumers where they want to be with regards to trends.
Sales GrowthChurch & Dwight is larger than most consumer staples companies and benefits from economies of scale, giving it an edge over its smaller competitors.
As you can see below, the company's annualized revenue growth rate of 5.9% over the last three years was mediocre, but to its credit, consumers bought more of its products.
This quarter, Church & Dwight's revenue grew 3.9% year on year to $1.51 billion, falling short of Wall Street's estimates. Looking ahead, Wall Street expects sales to grow 4.2% over the next 12 months, an acceleration from this quarter.
Organic Revenue GrowthWhen analyzing revenue growth, we care most about organic revenue growth. This metric captures a business's performance excluding the impacts of foreign currency fluctuations and one-time events such as mergers, acquisitions, and divestitures.
The demand for Church & Dwight's products has generally risen over the last two years but lagged behind the broader sector. On average, the company's organic sales have grown by 3.9% year on year.
In the latest quarter, Church & Dwight's organic sales rose 4.7% year on year. This growth was a deceleration from the 5.4% year-on-year increase it posted 12 months ago, showing the business is still performing well but lost a bit of steam.
Key Takeaways from Church & Dwight's Q2 Results We were impressed by how significantly Church & Dwight blew past analysts' organic revenue growth expectations this quarter. We were also excited its gross margin outperformed Wall Street's estimates. On the other hand, its earnings forecast for next quarter missed analysts' expectations. This is weighing on shares, and the stock traded down 2.4% to $97.60 immediately following the results.
