Church & Dwight Co Inc (CHD) Reports Strong 2023 Results with Notable Sales and EPS Growth
Net Sales Growth: Reported a 9.2% increase in full year net sales, reaching $5.867 billion.
Organic Sales Growth: Achieved a 5.3% rise in organic sales, driven by positive pricing and volume increases.
Gross Margin Expansion: Gross margin improved by 260 basis points in Q4 and 220 basis points for the full year.
Earnings Per Share (EPS): Full year reported EPS surged by 81.5% to $3.05, with adjusted EPS up by 6.7% to $3.17.
Cash Flow Strength: Cash from operations exceeded $1 billion for the first time, totaling $1.03 billion.
Dividend Growth: Announced a 4% increase in quarterly dividend, marking the 28th consecutive year of dividend growth.
Share Repurchase: Spent $300 million to repurchase 3.3 million shares in Q4.
On February 2, 2024, Church & Dwight Co Inc (NYSE:CHD) released its 8-K filing, detailing a year of robust financial performance. The company, known for its leading global production of baking soda and a diverse portfolio of household and personal care products, has reported a significant uptick in sales and earnings for the fourth quarter and full year of 2023.
Financial Highlights and Company Performance
Church & Dwight's full year net sales increased by 9.2% to $5.867 billion, surpassing the company's outlook. This growth was propelled by a 5.3% increase in organic sales, attributed to a 4.4% rise in pricing and a 0.9% increase in volume. The company's consumer products segment saw a 6.2% organic sales increase.
The company's earnings per share (EPS) also saw a remarkable rise. The reported EPS for the full year was $3.05, marking an 81.5% increase compared to the previous year. The adjusted EPS, which reached $3.17, grew by 6.7% year-over-year, exceeding the company's outlook. This growth was driven by higher sales, an improved gross margin, and a lower tax rate, although partially offset by increased SG&A expenses.
For the fourth quarter, Church & Dwight reported net sales of $1.528 billion, a 6.4% increase from the previous year, with organic sales up by 5.3%. The adjusted EPS for Q4 was $0.65, compared to $0.62 in the same quarter of the previous year.
Strategic Acquisitions and Product Innovations
CEO Matthew Farrell highlighted the strength of the company's brands and the successful integration of recent acquisitions, including THERABREATH mouthwash and HERO, the maker of MIGHTY PATCH acne care products. Both brands have shown high consumption growth and increased market share throughout 2023.
Church & Dwight's focus on innovation is evident in its product launches, which are expected to significantly contribute to net sales in 2024. Notable introductions include ARM & HAMMER Deep Clean Liquid and Unit Dose Laundry Detergent, Power Sheets Laundry Detergent, and Hardball Clumping Litter.
Looking Ahead to 2024
The company's outlook for 2024 is optimistic, with expectations of 4 to 5% net sales growth and 7 to 9% EPS growth. The company has revised its long-term Evergreen business model to reflect expectations of faster topline growth, greater margin expansion, and increased investment in e-commerce and international markets.
Church & Dwight anticipates a full year reported and organic sales growth of approximately 4-5%, with gross margin expected to expand by 50 to 75 basis points versus 2023. Adjusted EPS growth is projected at 7-9%, inclusive of a 1% EPS drag related to exiting the MEGALAC business.
The company's robust cash flow is set to continue, enabling it to return cash to stockholders while maintaining financial flexibility for acquisitions and business investments. Church & Dwight remains committed to driving growth through its seven key brands, which represent 70% of its sales and profits.
For more detailed financial information and to view the full earnings release, please visit the 8-K filing.
Church & Dwight Co Inc (NYSE:CHD) will host a webcast to discuss the fourth quarter and year-end 2023 results on February 2, 2024, at 12:00 p.m. (ET). Interested parties can access the webcast at investor.churchdwight.com/investors/news-events.
Explore the complete 8-K earnings release (here) from Church & Dwight Co Inc for further details.
This article first appeared on GuruFocus.
