Church & Dwight Co., Inc.
CHD is consistently benefiting from strength in the Consumer
International unit, which in turn has been boosting overall sales
trend. Notably, the companyâs solid acquisitions and focus on
product innovations are key drivers behind its growth story.
We expect these factors to continue driving this Zacks Rank #2
(Buy) stock that has rallied nearly 16% in the past three months,
outpacing the industryâs growth of 9%. To top it, the Zacks
Consensus Estimate for 2019 has gone up from $2.46 to $2.48 over
the past 60 days.
Church & Dwightâs Key Drivers
The companyâs top line has been impressive for a while. With
first-quarter 2019 results, Church & Dwight marked its seventh
consecutive quarter of sales surprise. Sales in the quarter gained
from continued category growth and healthy market share gains.
Also, the company has been witnessing organic sales growth for
quite some time now, backed by solid focus on product innovations.
The company now anticipates sales growth of 5-6% in 2019, owing to
the acquisition of FLAWLESS. Organic sales are expected to rise
3.5%, driven by effective product launches across most
Church & Dwight has acquired a number of premium high-margin
brands, which have been contributing significantly to top-line
growth. To this end, the company recently concluded the buyout of
FLAWLESS and FINISHING TOUCH (âFLAWLESSâ), which is a significant
inclusion to the specialty haircare category. This is expected to
contribute to the companyâs top line in 2019. Some of its previous
noteworthy acquisitions are Waterpik (in August 2017), Agro
BioSciences (in May 2017) and VIVISCAL business (in January
Further, the Consumer International business has been a significant
sales driver for the company. In first-quarter 2019, organic sales
in this segment increased 8.5% on volume growth of 10.2%. Impetus
was mainly provided by FEMFRESH, BATISTE, STERIMAR, and ARM &
HAMMER liquid laundry detergent in the Global Markets Group
business, ARM & HAMMER clumping cat litter and liquid laundry
detergent in Canada, BATISTE in Germany, and WATERPIK in several
countries. In fact, ARM & HAMMER is the companyâs biggest
international brand, which is well positioned to grow further in
Overall Consumer International sales also remained strong, rising
3.3%, backed by broad-based sales growth for household and personal
care products, and improvement in Global Markets Group business. As
international arena is a bright spot for the company, it continues
to invest in this segment to sustain strong sales growth.
Clearly, Church & Dwight is set to sustain its momentum on the
back of its sales drivers and focus on boosting margins.
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