Church & Dwight., Inc. CHD gears up to report its second-quarter fiscal 2024 earnings on Aug 2, before market open. The company is likely to register top-line growth while the bottom line is expected to decrease year over year.
The Zacks Consensus Estimate for second-quarter revenues stands at $1,509 million, which indicates an increase of 3.8% from the year-ago quarter’s reported figure.
Over the past 30 days, the Zacks Consensus Estimate for earnings has remained steady at 84 cents per share. However, this estimate suggests a year-over-year decline of 8.7%.
CHD boasts a strong earnings surprise record, having surpassed the consensus estimate in each of the last four quarters, the average surprise being 9.6%. In the most recent quarter, CHD exceeded the consensus estimate by 11.6%, further solidifying its track record.
Church & Dwight Co., Inc. Price, Consensus and EPS Surprise
Church & Dwight Co., Inc. price-consensus-eps-surprise-chart | Church & Dwight Co., Inc. Quote
Evaluating Potential and Pitfalls
Church & Dwight has showcased its resilience in the consumer goods market with high consumer demand across its diverse portfolio and growth in its divisions. The increase in volume for the first quarter was a major contributor to organic growth, pointing to promising prospects for sustained momentum in the upcoming quarter.
Favorable consumer demand has been working well for Church & Dwight, which has built a robust portfolio through innovation, new products and acquisitions. The company's brand strength, efficient pricing and productivity gains have been key factors in its success. Church & Dwight, initially known for its single brand, ARM & HAMMER, has expanded its portfolio through numerous acquisitions of high-margin brands. These strategic moves have greatly contributed to its top-line growth.
The company’s portfolio includes seven power brands, namely ARM & HAMMER, OXICLEAN, VITAFUSION, L’IL CRITTERS, BATISTE, WATERPIK and THERABREATH, which contribute to nearly 70% of its revenues and profits. These upsides are likely to have contributed to the upcoming results.
Our model suggests organic sales growth of 4.1% in the second quarter of 2024. Moreover, we expect revenues from the Consumer Domestic segment and Consumer International segment to increase 3.3% and 7.0%, respectively, from the year-ago period.
However, in its latestearnings call management indicated expectations for increased manufacturing costs due to capacity-related investments, higher third-party manufacturing expenses and moderate commodity inflation. This is likely to have affected its gross margin in the quarter under review.
Additionally, 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. Management foresees a rise in marketing expenditure and an increase in SG&A expenses for the second quarter.
Earnings Whispers
Our proven model predicts a likely 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.
Church & Dwight has an Earnings ESP of +2.60% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are three other companies worth considering, as our model shows that these, too, have the correct combination to beat on earnings this time:
Ollie's Bargain Outlet Holdings, Inc. OLLI currently has an Earnings ESP of +2.38% and sports a Zacks Rank of 1. The company is likely to register top and bottom-line increases when it reports second-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Ollie's Bargain’s quarterly revenues is pegged at $562.4 million, which indicates growth of 9.3% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Ollie's Bargain’s quarterly earnings of 78 cents suggests a rise of 16.4% from the year-ago quarter’s levels. OLLI has a trailing four-quarter earnings surprise of 10.4%, on average.
International Flavors & Fragrances Inc. IFF currently has an Earnings ESP of +21.04% and a Zacks Rank of 2. The company is likely to register a decline in the top line and an increase in the bottom line when it reports second-quarter 2024 numbers. The Zacks Consensus Estimate for International Flavors’ quarterly revenues is pegged at $2.8 billion, which indicates a decrease of 3.6% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for International Flavors’ quarterly earnings of 91 cents suggests an increase of 5.8% from the year-ago quarter’s levels. IFF has a trailing four-quarter earnings surprise of 6.45%, on average.
Coty COTY currently has an Earnings ESP of +22.73% and a Zacks Rank #3. The company is expected to register top-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COTY’s quarterly revenues is pegged at $1.38 billion, which suggests an increase of 1.8% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for Coty’s quarterly earnings of 5 cents suggests an increase of 400% from the year-ago quarter’s levels. COTY has a trailing four-quarter negative earnings surprise of 22.1%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
