Net Sales Decline 2.4% for Church & Dwight in Q1 2025

Net sales declined 2.4% for Church & Dwight Co., Inc. in Q1 2025 to $1.467 billion.

While the company’s brands grew consumption and share, it experienced slowing category growth in the US market and retailers reduced inventory levels, officials said. Organic sales decreased 1.2% due to 1.4% lower volume partially offset by positive pricing and mix of 0.2%. Reported EPS was $0.89 and Adjusted EPS was $0.91, a decrease of 5.2%. Adjusted EPS exceeded the company’s outlook of $0.90.

“In an environment of slowing consumption, our brands are performing well,” said CEO Rick Dierker. “We continue to drive both dollar and volume share gains across most of our brands. Our balanced portfolio of value and premium products keep us well positioned to navigate this environment.”

In the first quarter, the Domestic Division declined 3.0% organically, as retailers reduced inventory levels (about 300 basis point impact) and consumption slowed. However, the majority of our brands once again outperformed the category with four of our seven power brands growing share. The International Division organic growth was 5.8%, driven by growth in our subsidiaries. Our Specialty Products Division grew organic sales 3.2%. Further, our momentum with e-commerce growth continued with global online sales representing 22.9% of total consumer sales in Q1.

To Sell or Not to Sell?

The company says it’s moving on portfolio decisions and will be taking strategic actions for the Flawless, Spinbrush and Waterpik showerhead businesses, which includes shutting down or selling these businesses. Officials say these businesses generate approximately $150 million of net sales with below-average profitability. This decision will strengthen the company, sharpen our focus on core brands, and mitigate a significant portion of our tariff exposure. The company said it expects to record a Q2 charge of approximately $60 to 80 million, primarily compromised of non-cash impairments of intangibles and fixed assets, as well as inventory charges depending on sell through.

Tariff Management

While the tariff situation remains fluid, the company is currently projecting a 12-month run-rate gross tariff exposure of approximately $190 million. The impact of the portfolio decisions and a series of supply chain actions is expected to reduce its tariff exposure by approximately 80%. The supply chain actions include no longer sourcing Waterpik flossers from China for the US market. The impact of inventory builds and other quick supply chain actions enable us to effectively manage the tariff exposure and the net impact is included in the Company’s outlook. Over the next 12 months, officials said they believe the impact of the remaining tariffs can be mitigated via supply chain efforts and surgical pricing.

First Quarter Review

Consumer Domestic net sales were $1.1 billion, a $35.4 million or 3.0% decrease driven by lower household and personal care sales. Organic sales decreased 3.0% due to volume (-3.1%) partially offset by price and product mix (+0.1%). Growth was led by Therabreath mouthwash and Zicam, offset by declines in the vitamin business, Oxiclean stain fighters. Broadly, this segment was impacted by retailer inventory actions.

Consumer International net sales were $261.9 million, a $6.9 million or 2.7% increase. Organic sales increased 5.8% due to higher volume (+5.9%) partially offset by lower price and product mix (-0.1%). Growth was led by Hero, Therabreath and Waterpik and was broad based with all subsidiary markets delivering growth.

Specialty products net sales were $75.4 million, a $7.7 million or 9.3% decrease reflecting the exit of the Megalac and the food safety business in 2024. Organic sales increased 3.2% due to a combination of higher price and product mix (+2.9%) and higher volume (+0.3%).

Gross margin decreased 70 basis points to 45.0%. Adjusted gross margin was 45.1%1, down 60 basis points with the impact of higher manufacturing costs and lower volume being partially offset by improved productivity, positive mix and revenue from higher margin acquisitions.

2025 Outlook

The company expects organic sales growth of approximately 0% to 2% (previously 3% to 4%). The sales outlook now reflects no recovery in retailer destocking from Q1 and slower category growth due to macroeconomic uncertainty.

“Despite these uncertain markets, we remain focused on growing our market shares across our portfolio,” said Dierker. “We will continue to invest in marketing to support our brands and we believe consumption of our brands will continue to outpace category growth fueled by innovation. We will continue to offer high quality products to consumers at the right value. This outlook reflects strong underlying operating fundamentals.”