Church & Dwight Reports Q3 Results

Church & Dwight’s third quarter 2015 reported net sales increased $20.0 million or 2.4% to $861.8 million. Organic sales growth for the third quarter 2015 was 3.2%, driven by volume growth of 2.2% and 1.0% favorable product mix and pricing.
 
 “We are extremely pleased with the sales and earnings growth in the third quarter. Our strong organic growth was driven by innovative new products launched in all of our major categories as we believe that innovation is the key to increasing our market share and reviving category growth in this challenging economy,” noted James Craigie, chairman and CEO.
 
Consumer domestic net sales were $656.4 million, a 4.7% increase. Third quarter organic sales increased by 2.8%, primarily due to the firm’s cat litter franchise, but also by a higher sales of Arm & Hammer liquid laundry detergents and Batiste dry shampoo. Volume growth contributed 1.6% to organic sales, while favorable pricing contributed 1.2%.
 
Consumer international net sales were $124.7 million, an 8.4% decrease primarily due to negative foreign exchange effects. Organic sales increased 7.9%, driven largely by higher sales in Australia, Canada, Europe and Mexico. Volume increased 6.9%, while favorable product mix and pricing contributed 1.0%.
 
Church & Dwight’s specialty products net sales were $80.7 million, a 2.9% increase driven by the recent acquisition of the Vi-COR business. Third quarter organic sales decreased by 2.2% with volume declining 1.4% and unfavorable product mix and pricing of 0.8%.
 
Marketing expense was $92.8 million, a 3.9% decrease. Church & Dwight’s marketing expense as a percentage of net sales was 10.8%, a 70 basis point decrease, which is largely driven by shifting marketing funds to trade and couponing to continue to support proven consumer trial generating activities for the Oxiclean megabrand. Selling, general, and administrative expense (SG&A) was $102.4 million. SG&A as a percentage of net sales was 11.9%, an 80 basis point increase. This was primarily due to incremental amortization from acquisitions, higher incentive compensation and research and development spending.
 
Income from operations was $190.6 million, a 7.6% increase (+11.8% on a currency neutral basis). Operating income as a percentage of net sales was 22.1%, a 100 basis point increase.
 
 “2015 has been another excellent year so far in terms of overall business results,” noted Craigie. “We believe that we are positioned to continue to deliver strong sales and earnings growth with our balanced portfolio of value and premium products, the launch of innovative new products, aggressive productivity programs and tight management of overhead costs.”