Church & Dwight Co. Inc.'s
) fourth-quarter 2013 earnings per share of 65 cents fell short
of the Zacks Consensus Estimate by a couple of cents. However,
the reported figure was 14.0% higher than 57 cents earned in the
Not much movement was seen in the stock price of Church &
Dwight following its fourth-quarter 2013 results. The stock rose
2.7% during the trading session and fell by almost equivalent
percentage in the aftermarket trading hours.
For the full year, earnings came in at $2.79 per share, a penny
short of the Zacks Consensus Estimate. However, it rose 13.9%
year over year.
The top line for Church & Dwight improved 1.6% to $822.6
million and marginally beat the Zacks Consensus Estimate of $822
million. Organic sales increased 2.3% (above management's
forecasted range of 1.5%-2%), driven by 5.2% growth in volume,
partially offset by an adverse impact of 2.9% due to pricing.
For 2013, the top line came in at $3,194.3 million, up 9.3% year
over year but marginally missed the Zacks Consensus Estimate of
Gross profit increased 3.7% year over year to $371.7
million. Moreover, gross margin expanded 90 basis points
(bps) to 45.2%, attributed to productivity programs undertaken by
management, partly offset by adverse price/mix. Notably, this was
the sixth successive quarter of gross margin expansion.
Operating income rose 7.4% year over year to $144.6 million in
the quarter. Moreover, operating margin expanded approximately
100 bps to 17.6%.
net sales rose 2.2% year over year to $622.7 million, driven by a
6.4% increase in personal care products revenues to $268.4
million, partly offset by a 0.8% decline in household products
revenues to $354.3 million.
Organic sales nudged up 2.9% in the quarter, due to a rise in
sales of VITAFUSION, ARM & HAMMER liquid laundry detergents,
L'IL CRITTER vitamins, TROJAN lubricants and OXICLEAN laundry
additives. This was, however, partially offset by sluggish sales
of XTRA liquid laundry detergent, ARM & HAMMER cat litter,
ARM & HAMMER powdered laundry detergent and SPINBRUSH
Increase in sales marked a 6.6% improvement in volume, while
product mix and pricing unfavorably impacted sales by 3.7%.
sales remained flat year over year at $136.3 million. Organic
sales increased 0.3%, attributable to healthy sales in Canada
Mexico, and Brazil. Volume fell marginally by 0.7% whereas
favorable product mix and pricing impacted sales by 1.0%.
sales decreased 0.6% to $63.6 million, while organic sales grew
0.7% in the said quarter. Volume growth of 4.5%, attributable to
the animal nutrition business, was partly offset by unfavorable
product pricing that adversely impacted sales by 3.8%.
Other Financial Details
Church & Dwight, which competes with
The Clorox Company
Procter & Gamble Company's
ended the quarter with cash and cash equivalents of $496.9
million, long-term debt of $649.5 million and shareholders'
equity of $2,300.0 million. Moreover, for 2013, it generated cash
from operations of $499.6 million and incurred $67.1 million in
On Jan 29, 2013, the company announced an 11% hike in its
quarterly dividend to 31 cents, payable on Mar 3, 2014 to
stockholders of record at the close of business on Feb 18, 2014.
This is the 18th year of a successive dividend hike. Over the
last five years, company has increased its dividend by nearly
Also, the board of directors approved a new share repurchase
program worth $500 million. The existing authorization was
Management expects innovative product launches and cost-cutting
endeavors to boost bottom-line results further. The company
anticipates earnings per share to be $2.96 to $3.07 for 2014, up
6-10% year over year. The Zacks Consensus Estimate for first
quarter and full year 2014 is pegged at 81 cents and $3.09,
Church & Dwight forecasts organic sales to rise approximately
3.0% to 4.0% in 2014, Further, it expects gross margin to remain
flat year over year in 2014 as productivity gains are neutralized
by considerable investments made for new products and intense
price war in the laundry category.
The company noted that most of the earnings growth will be
achieved in the second half of the year as the first half is
likely to see a plethora of expenses related to product
launches. Therefore, for the first quarter, the company
expects organic sales of 1%, a decline of 100 bps in gross margin
and earnings per share of 72 cents after factoring in a 50% hike
in slotting and doubling of the couponing investment.
At present, Church & Dwight holds a Zacks Rank #4 (Sell).
CHURCH & DWIGHT (CHD): Free Stock Analysis
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