Church & Dwight Reports Q4 Numbers

Church & Dwight Co., Inc.’s organic sales growth for 2015 was 3.6%, driven by volume growth of 3.1% and 0.5% price and product mix.
 
“We are very pleased with the superior business results we delivered in 2015,” said Matthew Farrell, CEO.  “We delivered top tier results within the consumer packaged goods industry including full year organic sales of 3.6%, expanded gross margin by 40 basis points and delivered adjusted earnings growth of 8.0%. We increased our marketing spend in 2015 in support of our brands.”
 
According to Farrell, for the full year, three out of C&D’s mega brands and seven out of 10 power brands grew share including Arm & Hammer and Batiste our newest power brand.
 
For the fourth quarter, organic sales increased 2.6% driven by strong results in both the domestic and International segments. This organic growth was on top of 5.2% organic growth in prior year fourth quarter of 2014, the largest quarter of organic growth in 2014, according to the company
 
Consumer domestic net sales were $672.3 million, a $20.1 million or 3.1% increase over the prior year fourth quarter. Fourth quarter organic sales increased by 2.8%, primarily due to continued success of the Arm & Hammer Clump & Seal cat litter franchise, including the new lightweight variant and higher sales of Arm & Hammer liquid laundry detergent, Batiste dry shampoo and Trojan condoms.

According to Church & Dwight, Batiste has more than doubled its share in 2015 and has become the No. 1 dry shampoo in the US.
 
Consumer international net sales were $125.0 million, down 9.8% primarily due to negative foreign exchange effects, the company said. Organic sales increased 5.4%, driven largely by higher sales in Australia, Europe and Mexico. Volume increased 2.7%, while favorable product mix and pricing also contributed 2.7%.
 
C&D’s specialty productsnet sales were $76.3 million, a $1.6 million or 2.1% increase driven by the acquisition of the Vi-COR business. Organic sales decreased by 4.2% with volume declining 3.6% and unfavorable product mix and pricing of 0.6%. The lower organic sales were driven by the impact of lower milk pricing and the strong year ago results (+20% organic sales in Q4 2014).
 
C&D’s marketing expensewas $120.1 million, the highest of any quarter of 2015, representing an increase of $1.0 million or 0.8% in comparison to the prior year fourth quarter. Marketing expense as a percentage of net sales was 13.7%, a 10 basis point decrease.
 
Earlier this year, Church & Dwight acquired Spencer Forrest, Inc., the maker of Toppik hair building fibers, for $175 million. The business has annual sales of approximately $30 million and is expected to be slightly EPS accretive in 2016.
 
According to Farrell, the company will roll out dual chamber unit dose technology within the Arm & Hammer and Oxiclean laundry franchises, and will also introducing new products that fall outside Happi’s scope, such as  entirely new beauty line of adult vitamins, new condoms and a pregnancy test kit with bluetooth technology.
 
“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. The 2016 business environment will be extremely challenging with continued competitive pressure and foreign currency headwinds,” said Farrell.
 
 “We believe that 2016 will be an exciting year for Church & Dwight based on our current growth momentum and category strength, continued focus on innovation, and confidence in gross margin expansion.