Church & Dwight., Inc. CHD gears up to unveil its third-quarter fiscal 2024 earnings on Nov. 1. The company is likely to register top-line growth while the bottom line is expected to have decreased year over year.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $1,494 million, which indicates an increase of 2.6% from the year-ago quarter’s reported figure.
In the past 30 days, the Zacks Consensus Estimate for earnings has remained unchanged at 68 cents per share. However, this estimate indicates a year-over-year decline of 8.1%.
CHD has a strong history of earnings surprises, having exceeded the consensus estimate in each of the trailing four quarters, delivering an average surprise of 8.2%. In the most recent quarter, CHD surpassed the consensus estimate by 10.7%, further reinforcing its impressive track record.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Church & Dwight Co., Inc. Price, Consensus and EPS Surprise
Church & Dwight Co., Inc. price-consensus-eps-surprise-chart | Church & Dwight Co., Inc. Quote
Factors Likely to Influence CHD’s Q3 Earnings
Church & Dwight's diverse product portfolio including essential household items and personal care products positions it well to capture demand from consumers prioritizing value and quality. Continued investment in marketing, innovative product launches and strong brand performance are poised to have driven revenue growth. With a focus on international expansion, Church & Dwight is well-positioned to report increased revenues in the third quarter.
For the third quarter of 2024, CHD anticipates a net sales and organic sales growth of approximately 2.5% and 3%, respectively. Our model closely aligns with these estimates, projecting organic sales growth of 2.9%. We expect organic sales growth of 2% in the Consumer Domestic segment, 6.8% in the Consumer International segment and 4.2% in the Specialty Products division.
Church & Dwight's portfolio includes seven key brands, ARM & HAMMER, OXICLEAN, VITAFUSION and L’IL CRITTERS, BATISTE, WATERPIK, THERABREATH and HERO. These brands account for nearly 70% of the company’s revenues. The steady introduction of new products under these brands have been resonating well with consumers, strengthening the company’s portfolio through ongoing innovation and acquisitions.
Trusted consumer brands like Arm & Hammer, OxiClean and Trojan are expected to have continued to be significant revenue drivers across Church & Dwight’s segments. The company has consistently shown an ability to innovate within premium and niche product categories, particularly with brands like Flawless Beauty and Waterpik. These higher-margin, faster-growing categories have helped diversify the company's product offering and enhance earnings. We expect revenues from the Consumer Domestic segment to have increased 2% from the year-ago period.
Church & Dwight continues to strengthen its international presence. CHD is poised to have capitalized on growing demand in these markets. The company reported a robust 9.3% organic growth in its international segment in the second quarter, particularly in Canada, Mexico and Germany. We foresee a revenue increase of 8.3% in the Consumer International segment.
However, Church & Dwight has been grappling with challenges stemming from the current consumer spending environment. Consumption growth has slowed as consumers have been squeezing household budgets.
Church & Dwight's gummy vitamins segment has been an underperformer within its product portfolio, facing consistent declines in consumer consumption. Although the company has been implementing new packaging and formulas to stabilize the segment, recovery has been slower than anticipated. This is likely to have affected the segment’s performance.
The company has been witnessing increasing marketing expenses for the past few quarters. It has been undertaking increased marketing to fuel brand awareness, especially for new products and acquired brands. While necessary to maintain a competitive edge, CHD might see a hit to its profit margins if sales do not sufficiently offset these costs. Our model suggests marketing expenses and SG&A expenses, as a percentage of sales to increase 160 bps to 13.1% and 140 bps to 16.2%, respectively, in the third quarter.
What the Zacks Model Predicts for CHD
Our proven model does not conclusively predict an earnings beat for Church & Dwight this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Church & Dwight currently has a Zacks Rank #3 and an Earnings ESP of -1.24%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering, as our model shows that these have the correct combination to beat on earnings this season:
The Clorox Company CLX has an Earnings ESP of +2.60% and sports a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CLX is likely to register top-line growth when it reports first-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.63 billion, which indicates 17.6% growth from the year-ago quarter’s reported figure.
The consensus estimate for Clorox’s first-quarter earnings is pegged at $1.36 per share, which implies 177.6% growth from the year-ago quarter’s reported figure. CLX delivered an earnings beat of 122.9%, on average, in the trailing four quarters.
e.l.f. Beauty, Inc. ELF has an Earnings ESP of +17.74% and currently carries a Zacks Rank of 3. ELF's top line is anticipated to advance year over year when it reports second-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $291 million, which indicates a 35% increase from the year-ago quarter’s reported figure.
The company is expected to register a decline in the bottom line. The consensus estimate for e.l.f. Beauty’s second-quarter earnings is pegged at 44 cents per share, down 46.3% from the year-ago quarter. ELF has a trailing four-quarter earnings surprise of 40.3%, on average.
Ollie's Bargain Outlet Holdings, Inc. OLLI currently has an Earnings ESP of +1.50% and a Zacks Rank of 3. OLLI's top line is anticipated to increase year over year when it reports third-quarter 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $519 million, which implies 8.1% growth from the year-ago quarter’s reported figure.
The company is expected to register an increase in the bottom line. The consensus estimate for Ollie's Bargain’s third-quarter earnings is pegged at 57 cents per share, up 11.8% from the year-ago quarter. OLLI has a trailing four-quarter earnings surprise of 7.9%, on average.
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The Clorox Company (CLX) : Free Stock Analysis Report
Church & Dwight Co., Inc. (CHD) : Free Stock Analysis Report
Ollie's Bargain Outlet Holdings, Inc. (OLLI) : Free Stock Analysis Report
e.l.f. Beauty (ELF) : Free Stock Analysis Report
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