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Church & Dwight Facilities Operational Even Amid Coronavirus

Zacks Equity Research
·3 min read

As per the requirements and guidance of the government, Church & Dwight CHD announced that all its products have been categorized as essential commodities. Hence, the company informed that all its production facilities and distribution centers are operational even amid the coronavirus outbreak.

In fact, for March, Church & Dwight has been witnessing a significant increase in demand for its products, including Vitafusion gummy vitamins, Simply Saline and Sterimar nasal hygiene, among others. The company expects this trend to continue in the second quarter of 2020.

Moreover, management has undertaken steps to increase short-term production capacity for its cleaning and healthcare products. Apart from this, Church & Dwight is making efforts to ensure undisrupted supply of its products to support the increased demand.

We note that the coronavirus pandemic has put major cities under lockdown and infected more than 375,000 people across the globe. The resultant panic is driving people to stockpile essential goods like bathroom tissue, canned foods, bottled drinking water, soap and cleaning supplies, hand sanitizers and many more staple items. With community transmission gaining scale, people are hoarding essentials so that they do not have to venture out for daily supplies.


 

Certainly, the stockpiling works well for consumer staple players like Church & Dwight. Also, this is leading to heavy demand at departmental store retailers, discount store retail chains and supermarkets. In fact, many retailers like Dollar Tree, Inc. DLTR, Dollar General Corporation DG and Walmart Inc. WMT are hiring associates to efficiently cater to customers’ burgeoning demand for essential goods and delivery needs.

Meanwhile, Church & Dwight has enhanced the sanitization process and implemented work from home for several workers as precautionary measures. Also, the company has been undertaking various practices like social distancing and restrictions on business travel for its employees, among other moves, in an attempt to contain the spread of the deadly coronavirus.   

Also, in order to enhance its financial flexibility amid the coronavirus outbreak, the company announced that it has drawn down $825 million out of its $1-billion revolving credit facility. Consequently, Church & Dwight’s cash in hand is likely to be nearly $1 billion as of Mar 31.



We note that shares of this Zacks Rank #3 (Hold) company have dropped 10.8% in the past three months compared with the industry’s decline of 19.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

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Walmart Inc. (WMT) : Free Stock Analysis Report
 
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