Church & Dwight Co Inc (CHD) Q3 2023 Earnings: Net Sales Rise by 10. ...
Church & Dwight Co Inc (NYSE:CHD) reported a 10.5% increase in net sales for Q3 2023, reaching $1,455.9 million.
Gross margin expanded by 270 basis points, driven by strong consumer demand across the company's portfolio.
Reported EPS was $0.71, a decrease of 6.6% compared to 2022, due to higher marketing investments and higher incentive compensation.
Full-year net sales outlook raised to 9%, with cash from operations expected to be around $1.0 billion, a 13% increase.
Church & Dwight Co Inc (NYSE:CHD) announced on November 3, 2023, that the company exceeded its outlook with stronger than expected sales growth and gross margin expansion for Q3 2023. Net sales grew by 10.5% to $1,455.9 million, and gross margin expanded by 270 basis points. The company continues to experience strong consumer demand across its portfolio, with organic sales growing by 4.8% driven by a volume of 2.7% and positive product mix and pricing of 2.1%.
Financial Performance
Reported EPS for Q3 2023 was $0.71, a decrease of 6.6% compared to 2022. This decrease was attributed to higher marketing investments and higher incentive compensation in the current quarter. However, the Q3 Adjusted EPS of $0.71 exceeded the company's outlook of $0.66, driven by higher-than-expected sales growth and gross margin expansion.
Key Financial Details
Consumer Domestic net sales were $1,133.1 million, a 12.1% increase versus the prior year, driven by both household and personal care sales growth. Consumer International net sales were $244.4 million, an 11.2% increase versus the prior year. However, Specialty Products net sales decreased by 10.1% to $78.4 million.
Gross margin increased 270 basis points to 44.4% due to improved pricing, volume, productivity, and the impact of the HERO acquisition, net of the impact of higher manufacturing costs. Marketing expense was $167.8 million, which was $27.1 million higher than the prior year.
Outlook for 2023
CEO Matthew Farrell stated that the company expects to continue the trend of strong sales growth and gross margin expansion in the fourth quarter. Full-year adjusted operating profit is expected to increase approximately 8%. The company now expects full-year 2023 reported sales growth to be approximately 9% and continues to expect organic sales growth to be approximately 5%.
Financial Tables
The company's net income for Q3 2023 was $177.5 million, a decrease from $187.1 million in the same period in 2022. The diluted net income per share was $0.71, down from $0.76 in Q3 2022. As of September 30, 2023, the company had cash on hand of $573.3 million and total debt of $2.4 billion.
Company's Performance Analysis
Despite the decrease in EPS, Church & Dwight Co Inc (NYSE:CHD) demonstrated strong performance in Q3 2023, with significant growth in net sales and gross margin expansion. The company's outlook for the full year 2023 remains positive, with expectations of continued sales growth and gross margin expansion.
Explore the complete 8-K earnings release (here) from Church & Dwight Co Inc for further details.
This article first appeared on GuruFocus.
