Church & Dwight Q3: ‘Stronger than Expected’ Sales Growth

Church & Dwight Co., Inc. exceeded its outlook with “stronger than expected” sales growth and gross margin expansion in Q3.

In the third quarter, net sales grew 3.8% to $1.51 billion. Organic sales grew 4.3% driven by volume of 3.1% and positive product mix and pricing of 1.2%, according to the maker of Arm & Hammer products.

 “We are pleased to deliver another quarter of strong results. Our outstanding Q3 results reflect the strength of our brands, the success of our new products, and our continued focus on execution,” said Matthew Farrell, CEO.  Volume was the primary driver of organic growth, which we expect to continue in Q4.”

According to Farrell, global online sales grew to 20.7% of total consumer sales in Q3.

All three of Church & Dwight’s businesses delivered strong organic growth in the quarter.

Consumer Domestic 

Consumer Domestic net sales were $1.17 billion, a $37.7 million or 3.3% increase driven primarily by personal care sales growth. Organic sales increased 3.3% due to volume (+2.6%) and price and product mix (+0.7%). Growth was led by Hero acne products, Therabreath mouthwash, Zicam supplements, Spinbrush toothbrushes, and Arm & Hammer Scent Boosters, partially offset by declines in the vitamin business and Flawless, said officials.

Consumer International 

Consumer International net sales were $267.7 million, a $23.3 million or 9.5% increase. Organic sales increased 8.1% due to a combination of higher volume (+5.3%) and price and product mix (+2.8%). Growth was led by Hero, Therabreath and Oxiclean.

Specialty Products 

Specialty Product unit net sales were $72.1 million, a $6.3 million or an 8.0% decrease reflecting the exit of the Megalac business in Q1 and the food safety business in Q2. Organic sales increased 7.5% due to higher price and product mix (+3.9%) and volume (+3.6%). Organic sales growth came “while continuing the strategy of right sizing this business to focus on more profitable growth,” noted Farrell.

CEO Lauds NPD

“Product innovation continues to be a big driver of our success and we are excited about our new product launches,” Farrell continued.

Specifically, he cited the following products: Arm & Hammer Deep Clean Liquid and Deep Clean Unit Dose detergents, Arm & Hammer Laundry Power Sheets, Therabreath Deep Clean Oral Rinse, Batiste Sweat Activated and Touch Activated dry shampoos, and Hero Dissolve Away Daily Cleansing Balm.

 “In an uncertain consumer environment, we completed an exceptional nine months delivering strong sales and volume growth, gross margin expansion, and earnings growth. We remain focused on execution and offering products to consumers that provide high performance at a great value. We are thrilled with the success of our new product launches. Our full year outlook continues to reflect strong growth across all key measures, including reported and organic sales, volume, gross margin expansion, operating income and cash flow.”

Q4 Outlook

Farrell continued, “While US consumption in our categories improved slightly in September and October, we remain cautious regarding the US consumer and category growth rates for Q4.”

The Happi Top 50 Company expects full year reported sales to be approximately 3.5% and organic sales growth to be approximately 4%.