2023 Fourth Quarter Results
- Net Sales growth +6.4%: Domestic +6.4%, Int’l +11.9%, SPD -9.2
%
- Organic sales +5.3%: Domestic +5.7%, Int’l +9.0%, SPD
-9.2%1
- Gross Margin +260 bps
- Reported EPS $0.62, Adjusted EPS $0.65, +4.8%1
2023 Full Year Results
- Net Sales growth +9.2%; Organic Sales +5.3%1
- Gross Margin +220 bps
- Reported EPS $3.05, Adjusted EPS $3.17, +6.7%1
- Cash from operations $1.03 billion
Church & Dwight Co., Inc. (NYSE: CHD) today announced full
year net sales increased 9.2% to $5,867.9 million, ahead of the
Company’s outlook of 9%. Organic sales increased 5.3% due to
positive pricing of 4.4% and higher volume of 0.9%.1 Organic sales
of consumer products increased 6.2%.
Full year EPS was $3.05, an increase of 81.5% compared to 2022
reported EPS. Full year 2023 Adjusted EPS was $3.17, an increase of
6.7% compared to 2022 Adjusted EPS.1 Full year Adjusted EPS
exceeded the Company’s outlook of $3.15, driven by higher sales,
higher gross margin and a lower tax rate, partially offset by
higher SG&A.
Q4 net sales were $1,528.0 million, a $92.0 million or 6.4%
increase compared to net sales in Q4 2022. This exceeded the
Company’s outlook of 5% growth. Organic sales increased 5.3%1,
exceeding the Company’s outlook of 4%, driven by 4.0% positive
price and product mix and 1.3% higher volume. Reported EPS for Q4
was $0.62. Adjusted EPS in Q4 was $0.65 compared to $0.62 Adjusted
EPS in Q4 2022.
Matthew Farrell, Chief Executive Officer, commented, “Our full
year 2023 results illustrate the strength of our brands, innovative
new products, and our focus on execution. We are exiting the year
with strong momentum after posting two consecutive quarters of
year-over-year volume growth. We expect volume to continue to drive
growth into 2024. Our domestic brands grew consumption in 10 of 17
categories in 2023. We grew share on brands representing 60% of our
sales. Global online sales accounted for 20% of total consumer
sales in 2023, an increase of 26% compared to 2022.
“Our recent acquisitions, THERABREATH™ mouthwash and HERO™, the
maker of MIGHTY PATCH™ acne care products, both experienced high
consumption growth and grew market share throughout 2023. We expect
these brands to deliver strong growth in 2024.
“Organic revenue growth for the Domestic Division grew 5.7% in
2023 driven by growth across much of the portfolio. Organic revenue
growth for the International Division grew 8.5% in 2023, driven by
broad-based growth in our country subsidiaries and our Global
Markets Group. The International Division will continue to be a
growth engine for the Company in 2024. Our Specialty Products
Division declined 7.9% in 2023, largely due to declining sales of
our MEGALAC dairy supplement within our Animal Nutrition business.
We will be exiting this part of the Animal Nutrition business
during Q1 2024.
“We were especially pleased by the strong gross margin expansion
that we saw in 2023 with productivity, pricing, volume, and strong
contributions from higher margin acquisitions more than offsetting
inflation.
“Finally, strong sales and margin expansion along with efficient
working capital management were all key drivers of our strong cash
flow generation in 2023, achieving over $1 billion in cash from
operations for the first time.
Fourth Quarter Review
Consumer Domestic net sales were $1,193.0 million, a
$72.2 million or 6.4% increase driven by both household and
personal care sales growth. Organic sales increased 5.7% due to
price and product mix (+4.2%) and volume (+1.5%). This is the
second consecutive quarter of volume growth, despite the impact of
ceasing sub-optimal laundry promotions. Growth was led by HERO acne
treatments, THERABREATH mouthwash, ARM & HAMMER™ Cat Litter,
ARM & HAMMER™ baking soda and ARM & HAMMER™ unit dose
laundry detergent.
Consumer International net sales were $258.8 million, a
$27.5 million or 11.9% increase. Foreign currency exchange rates
impacted sales favorably by (+2.7%). Organic sales increased 9.0%
due to a combination of higher price and product mix (+5.1%) and
higher volume (+3.9%). This is the fourth consecutive quarter of
volume growth. Q4 organic sales were primarily driven by STERIMAR™,
THERABREATH, ARM & HAMMER baking soda and HERO.
Specialty Products net sales were $76.2 million, a $7.7
million or a 9.2% decrease. Organic sales decreased 9.2% primarily
due to lower volume (9.0%) driven by the dairy business,
particularly MEGALAC which continues to be impacted by low-priced
imports.
Gross margin increased 260 basis points to 44.6% due to
improved pricing, volume, productivity, and the impact of the HERO
acquisition, partially offset by higher manufacturing costs.
Marketing expense was $219.0 million, which was $29.3
million higher than prior year. Marketing expense as a percentage
of net sales increased 110 basis points to 14.3%.
Selling, general, and administrative expense (SG&A)
was $246.2 million, including $7.3 million of charges related to
restricted stock that was issued for the HERO acquisition. Adjusted
SG&A was $238.9 million or 15.6% of net sales, a 210 basis
points increase, primarily due to higher incentive compensation
from improved business performance, investment spending for future
growth and minor asset write-offs related to our Specialty Products
division.
Income from Operations was $216.1 million. Adjusted
Income from Operations was $223.4 million, an increase of 2.2%
inclusive of higher marketing and SG&A.
Other Expense was $20.9 million, a decrease of $4.6
million primarily due to higher interest income.
The effective tax rate decreased to 21.3% compared to
26.4% in Q4 2022. On an adjusted basis the tax rate was 20.5%
compared to a rate of 21.3% in Q4 2022. The reported tax rate of
26.4% in Q4 2022 was unusually high due to the impact of the
FLAWLESS™ intangible asset impairment charge.
Operating Cash Flow
For the full year 2023, cash from operations was $1,030.6
million, an increase of $145.4 million due to higher cash earnings
and improvements in working capital. Capital expenditures for the
full year were $223.5 million, a $44.7 million increase from the
prior year as we invested in capacity expansion projects.
At December 31, 2023, cash on hand was $344.5 million, while
total debt was $2.4 billion.
4% Dividend Increase and Share
Repurchase
Consistent with the Company’s capital allocation strategy, the
Company’s Board of Directors declared a 4% increase in the
quarterly dividend from $0.2725 to $0.28375 per share, equivalent
to an annual dividend of $1.135 per share. This raises the annual
dividend payout from $267 million to approximately $276 million.
The quarterly dividend will be payable March 1st, 2024, to
stockholders of record at the close of business on February 15th,
2024. This is the 28th consecutive year in which the Company has
increased the dividend. The Company has paid a consecutive
quarterly dividend for 123 years.
In Q4, the Company spent $300 million to repurchase 3.3 million
shares of common stock. Currently, the Company has approximately
246 million weighted average shares outstanding.
Mr. Farrell commented, “Our dividend increase and share
repurchases reflect the Company’s desire for stockholders to
benefit from our strong cash generation and reflects our confidence
in continuing our strong performance. 2024 should be another year
of strong cash flow. Our robust cash flow enables us to return cash
to our stockholders while maintaining significant financial
flexibility to aggressively pursue acquisitions and invest in our
business.”
2024 New Products
Mr. Farrell commented, “Product innovation continues to be a big
driver of our success and we are excited about our new product
launches. In 2024, we expect new product launches to drive a
significant increase in net sales as we lead with innovation in a
number of key categories.”
ARM & HAMMER™ Laundry is launching Deep Clean™ Liquid and
Deep Clean Unit Dose Laundry Detergent. Arm & Hammer Deep Clean
will be our most premium Arm & Hammer laundry detergent,
entering the mid-tier of the category using pH Power Technology to
penetrate deep into fibers where dirt, odor, and stains linger,
delivering a superior clean at a price consumers can afford.
ARM & HAMMER™ launched Power Sheets™ Laundry Detergent
online in August 2023. This innovative laundry solution is
effective, convenient, and eliminates plastic bottle waste. ARM
& HAMMER™ is the first major brand to offer a detergent sheet
in the U.S. and became the #2 detergent sheet on Amazon within 4
weeks of launch. It was the #1 top seller in the laundry category
on Amazon Prime Day. Due to its online success, Power Sheets ™ will
be available in select brick & mortar retailers in early
2024.
ARM & HAMMER™ Hardball™ Clumping Litter is being expanded
nationally in early 2024, after successful in-market testing in
2023. This transformational plant-based substrate is lightweight
and creates virtually indestructible clumps for no-mess scooping.
We expect this new litter to help ARM & HAMMER capture a
greater share of the lightweight litter category.
THERABREATH™, the #1 alcohol-free mouthwash brand, is entering
the antiseptic segment of the category with the launch of
TheraBreath™ Deep Clean Oral Rinse. Antiseptic mouthwashes account
for 30% of the category. This product is formulated to kill 99.9%
of germs that cause bad breath, plaque & gingivitis without the
burn.
BATISTE™, the leader in dry shampoo, is meeting consumers’
desire for longer-lasting results with new BATISTE Sweat Activated
and BATISTE Touch Activated dry shampoos. These breakthrough
products are formulated with advanced technology and release a
burst of fragrance whenever you sweat or touch your hair. Both new
products deliver up to 24 hours of freshness.
HERO™ continues to drive the majority of growth in the acne
category as the #1 patch brand in the U.S. In 2024, Hero will
continue to launch innovative solutions in patches combined with
new launches, such as Dissolve Away Daily Cleansing Balm, that will
broaden our offerings of gentle and effective solutions for
acne-prone skin.
Outlook for 2024
Mr. Farrell stated, “We exited 2023 with strong consumption
growth across the majority of our categories. We are confident
about 2024 and remain focused on offering high quality products to
consumers at the right value.
“We are evolving our long-term Evergreen business model in 2024.
The last revision was in 2018. Our new annual Evergreen model
reflects our expectation of faster topline growth, greater margin
expansion, and a higher cadence of growth investment, specifically
in ecommerce and international. The revised evergreen model calls
for 4% organic net sales growth (previously 3%), 25 to 50 basis
points of gross margin expansion (previously 25 bps), marketing as
a percentage of sales continues to approximate 11% (no change), and
SG&A leverage of 0-25 bps (previously 25 bps) reflecting
investments which will help sustain accelerated growth for years to
come. We are maintaining our 8% industry leading annual EPS growth
target.
“In 2024 we expect full year reported and organic sales growth
to be approximately 4-5%.1 The organic sales outlook excludes
Megalac from both years and the impact from foreign currency. We
expect full year reported gross margin to expand approximately 50
to 75 basis points versus 2023. We expect an increase in
manufacturing costs primarily due to capacity related investments,
third party manufacturing cost increases, and moderate commodity
inflation. We expect to more than offset our cost increases through
carryover product pricing, mix, higher volume and productivity. We
expect marketing as a percentage of sales to be approximately 11%
and we expect to leverage SG&A while making investments in our
International and ecommerce infrastructure.
“Our Adjusted EPS expectation for 2024 is 7-9% growth (mid-point
$3.42 Adjusted EPS), inclusive of a 1% EPS drag related to exiting
the MEGALAC business. Excluding the MEGALAC impact, Adjusted EPS
growth expectation is 8-10%. Our tax rate is expected to increase
170 bps to approximately 23%. The higher tax rate represents a 2%
drag to Adjusted EPS. This outlook reflects strong operating
fundamentals including organic sales growth, volume growth, margin
expansion and operating income growth.
“Other expense for 2024 is expected to be approximately $85
million, compared to $90 million in 2023.
“Cash flow from operations is expected to be approximately $1.0
billion. We expect 2024 capital expenditures of approximately $180
million as we complete the major capacity investments that were
initiated in 2023. We expect capital spending to return to
historical levels (2% of sales) in 2025. We will pursue accretive
acquisitions that meet our strict criteria, with an emphasis on
fast-moving consumable products, similar to our last 3 acquisitions
(ZICAM, THERABREATH, and HERO).
“In past years, we have highlighted and discussed 14 power
brands within our portfolio. In the future, we will focus our
communication on seven brands that we expect to be the key drivers
of growth. These brands, which today represent 70% of our sales and
profits, primarily compete in larger categories and have the
potential for global expansion. The seven brands are ARM &
HAMMER™, OXICLEAN™, BATISTE™, VITAFUSION™, WATERPIK™, THERABREATH™
and HERO™.
“For Q1, we expect reported and organic sales growth of
approximately 4%1, gross margin expansion and higher marketing
spending (+100 basis points) to support our strong innovation
pipeline. As a result of the shift in marketing spend to Q1, we
expect Adjusted EPS of $0.85 per share, flat versus last year’s
adjusted Q1 EPS.”1
1 Organic Sales, Adjusted SG&A, Adjusted Income from
Operations, Adjusted Tax Rate and Adjusted EPS are non-GAAP
measures. See Non-GAAP reconciliations included at the end of this
release.
Church & Dwight Co., Inc. (NYSE: CHD) will host a webcast to
discuss fourth quarter and year end 2023 results on February 2,
2024, at 12:00 p.m. (ET). The presentation will broadcast online at
investor.churchdwight.com/investors/news-events. Click on Church
& Dwight Co., Inc. 2024 Analyst Day to register for the
webcast.
Church & Dwight Co., Inc. (NYSE: CHD) founded in 1846, is
the leading U.S. producer of sodium bicarbonate, popularly known as
baking soda. The Company manufactures and markets a wide range of
personal care, household, and specialty products under recognized
brand names such as ARM & HAMMER®, TROJAN®, OXICLEAN®,
SPINBRUSH®, FIRST RESPONSE®, NAIR®, ORAJEL®, XTRA®, L’IL CRITTERS®
and VITAFUSION®, BATISTE®, WATERPIK®, ZICAM®, THERABREATH® and
HERO®. For more information, visit the Company’s website.
Church & Dwight has a strong heritage of commitment to
people and the planet. In the early 1900’s, we began using recycled
paperboard for all packaging of household products. Today,
virtually all our paperboard packaging is from certified,
sustainable sources. In 1970, the ARM & HAMMER brand introduced
the first nationally distributed, phosphate-free detergent. That
same year, Church & Dwight was honored to be the sole corporate
sponsor of the first annual Earth Day. In 2023, our continued
progress earned continued public recognition, including the
Newsweek Magazine’s Americas Most Responsible and America’s
Greenest Companies lists, the EPA’s Green Power Partnership-Top 100
list, the 2023 Wall Street Journal Management Top 250 List, the
2022/2023 Forbes Magazine: Americas Best Midsize Employer Award and
the FTSE4Good Index Series, amongst others.
For more information, see the Church & Dwight 2022
Sustainability Report at:
https://churchdwight.com/responsibility/
This press release contains forward-looking statements,
including, among others, statements relating to net sales and
earnings growth; gross margin changes; trade, marketing, and
SG&A spending; recessionary conditions; interest rates;
inflation; sufficiency of cash flows from operations; earnings per
share; cost savings programs; consumer demand and spending; the
effects of competition; the effect of product mix; volume growth,
including the effects of new product launches into new and existing
categories; the impact of acquisitions (including earn-outs); and
capital expenditures. Other forward-looking statements in this
release may be identified by the use of such terms as “may,”
“could,” “expect,” “intend,” “believe,” “plan,” “estimate,”
“forecast,” “project,” “anticipate,” “to be,” “to make” or other
comparable terms. These statements represent the intentions, plans,
expectations and beliefs of the Company, and are based on
assumptions that the Company believes are reasonable but may prove
to be incorrect. In addition, these statements are subject to
risks, uncertainties and other factors, many of which are outside
the Company’s control and could cause actual results to differ
materially from such forward-looking statements. Factors that could
cause such differences include a decline in market growth, retailer
distribution and consumer demand (as a result of, among other
things, political, economic and marketplace conditions and events),
including those relating to the outbreak of contagious diseases;
other impacts of the COVID-19 pandemic and its impact on the
Company’s operations, customers, suppliers, employees, and other
constituents, and market volatility and impact on the economy
(including contributions to recessionary conditions), resulting
from global, nationwide or local or regional outbreaks or increases
in infections, new variants, and the risk that the Company will not
be able to successfully execute its response plans with respect to
the pandemic or localized outbreaks and the corresponding
uncertainty; the impact of new legislation such as the U.S. CARES
Act, the EU Medical Device Regulation, new cosmetic and device
regulations in Mexico, and the U.S. Modernization of Cosmetic
Regulation Act; the impact on the global economy of the
Russia/Ukraine war and increased conflict in the Middle East,
including the impact of export controls and other economic
sanctions; potential recessionary conditions or economic
uncertainty; the impact of continued shifts in consumer behavior,
including accelerating shifts to on-line shopping; unanticipated
increases in raw material and energy prices, including as a result
of the Russia/Ukraine war, increased conflict in the Middle East or
other inflationary pressures; delays and increased costs in
manufacturing and distribution; increases in transportation costs;
labor shortages; the impact of price increases for our products;
the impact of inflationary conditions; the impact of supply chain
and labor disruptions; the impact of severe or inclement weather on
raw material and transportation costs; adverse developments
affecting the financial condition of major customers and suppliers;
competition; changes in marketing and promotional spending; growth
or declines in various product categories and the impact of
customer actions in response to changes in consumer demand and the
economy, including increasing shelf space or on-line share of
private label and retailer-branded products or other changes in the
retail environment; consumer and competitor reaction to, and
customer acceptance of, new product introductions and features; the
Company’s ability to maintain product quality and characteristics
at a level acceptable to our customers and consumers; disruptions
in the banking system and financial markets; the Company’s
borrowing capacity and ability to finance its operations and
potential acquisitions; higher interest rates; foreign currency
exchange rate fluctuations; transition to, and shifting economic
policies in the United States; potential changes in export/import
and trade laws, regulations and policies of the United States and
other countries, including any increased trade restrictions or
tariffs; increased or changing regulation regarding the Company’s
products and its suppliers in the United States and other countries
where it or its suppliers operate; market volatility; issues
relating to the Company’s information technology and controls; the
impact of natural disasters, including those related to climate
change, on the Company and its customers and suppliers, including
third party information technology service providers; integrations
of acquisitions or divestiture of assets; the outcome of
contingencies, including litigation, pending regulatory proceedings
and environmental matters; and changes in the regulatory
environment in the countries where we do business.
For a description of additional factors that could cause
actual results to differ materially from the forward-looking
statements, please see Item 1A, “Risk Factors” in the Company’s
annual report on Form 10-K and quarterly reports on Form 10-Q. The
Company undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by the U.S. federal
securities laws. You are advised, however, to consult any further
disclosures the Company makes on related subjects in its filings
with the United States Securities and Exchange Commission.
This press release also contains non-GAAP financial
information. Management uses this information in its internal
analysis of results and believes that this information may be
informative to investors in gauging the quality of the Company’s
financial performance, identifying trends in its results and
providing meaningful period-to-period comparisons. The Company has
included reconciliations of these non-GAAP financial measures to
the most directly comparable financial measure calculated in
accordance with GAAP. See the end of this press release for these
reconciliations. These non-GAAP financial measures should not be
considered in isolation or as a substitute for the comparable GAAP
measures. In addition, these non-GAAP financial measures may not be
the same as similar measures provided by other companies due to
potential differences in methods of calculation and items being
excluded. They should be read in connection with the Company’s
financial statements presented in accordance with GAAP.
CHURCH & DWIGHT CO., INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of
Income (Unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
December 31,
December 31,
(In millions, except per share data)
2023
2022
2023
2022
Net Sales
$
1,528.0
$
1,436.0
$
5,867.9
$
5,375.6
Cost of sales
846.7
833.5
3,279.4
3,125.6
Gross Profit
681.3
602.5
2,588.5
2,250.0
Marketing expenses
219.0
189.7
641.3
535.2
Selling, general and administrative
expenses
246.2
611.2
889.8
1,117.0
Income from Operations
216.1
(198.4
)
1,057.4
597.8
Equity in earnings of affiliates
0.6
2.3
8.7
12.3
Other income (expense), net
(21.5
)
(27.8
)
(98.7
)
(86.8
)
Income before Income Taxes
195.2
(223.9
)
967.4
523.3
Income taxes
41.5
(59.2
)
211.8
109.4
Net Income
$
153.7
$
(164.7
)
$
755.6
$
413.9
Net Income per share - Basic
$
0.63
$
(0.68
)
$
3.09
$
1.70
Net Income per share - Diluted
$
0.62
$
(0.67
)
$
3.05
$
1.68
Dividends per share
$
0.27
$
0.26
$
1.09
$
1.05
Weighted average shares outstanding -
Basic
244.6
243.6
244.9
242.9
Weighted average shares outstanding -
Diluted
247.0
246.1
247.6
246.3
CHURCH & DWIGHT CO., INC. AND
SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(Dollars in millions)
Dec. 31, 2023
Dec. 31, 2022
Assets
Current Assets
Cash and Cash Equivalents
$
344.5
$
270.3
Accounts Receivable
526.9
422.0
Inventories
613.3
646.6
Other Current Assets
45.0
57.0
Total Current Assets
1,529.7
1,395.9
Property, Plant and Equipment (Net)
927.7
761.1
Equity Investment in Affiliates
12.0
12.7
Trade Names and Other Intangibles
3,302.3
3,431.6
Goodwill
2,431.5
2,426.8
Other Long-Term Assets
366.0
317.5
Total Assets
$
8,569.2
$
8,345.6
Liabilities and Stockholders’
Equity
Short-Term Debt
$
3.9
$
74.0
Current portion of Long-Term debt
199.9
0.0
Other Current Liabilities
1,218.2
1,109.8
Total Current Liabilities
1,422.0
1,183.8
Long-Term Debt
2,202.2
2,599.5
Other Long-Term Liabilities
1,089.6
1,072.4
Stockholders’ Equity
3,855.4
3,489.9
Total Liabilities and Stockholders’
Equity
$
8,569.2
$
8,345.6
CHURCH & DWIGHT CO., INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of Cash
Flow (Unaudited)
Twelve Months Ended
December 31,
December 31,
(Dollars in millions)
2023
2022
Net Income
$
755.6
$
413.9
Depreciation and amortization
225.2
219.0
Deferred income taxes
(13.8
)
(117.7
)
Flawless impairment
0.0
411.0
Non-cash compensation
63.6
32.3
Other
9.3
(4.4
)
Subtotal
1,039.9
954.1
Changes in assets and liabilities:
Accounts receivable
(97.4
)
(5.3
)
Inventories
38.5
(92.8
)
Other current assets
10.4
2.5
Accounts payable and accrued expenses
55.2
39.9
Income taxes payable
(1.8
)
14.4
Other
(14.2
)
(27.6
)
Net cash from operating
activities
1,030.6
885.2
Capital expenditures
(223.5
)
(178.8
)
Acquisition
0.0
(546.8
)
Other
(10.8
)
(3.0
)
Net cash (used in) investing
activities
(234.3
)
(728.6
)
Net change in long-term debt
(200.0
)
298.8
Net change in short-term debt
(70.6
)
(178.9
)
Payment of cash dividends
(266.5
)
(255.0
)
Proceeds from stock option exercises
111.7
26.2
Purchase of treasury stock
(300.1
)
0.0
Deferred financing and other
(0.1
)
(12.0
)
Net cash (used in) financing
activities
(725.6
)
(120.9
)
F/X impact on cash
3.5
(6.0
)
Net change in cash and cash
equivalents
$
74.2
$
29.7
2023 and
2022 Product Line Net Sales
Three Months Ended
Percent
12/31/2023
12/31/2022
Change
Household Products
$
627.1
$
586.4
6.9
%
Personal Care Products
565.9
534.4
5.9
%
Consumer Domestic
$
1,193.0
$
1,120.8
6.4
%
Consumer International
258.8
231.3
11.9
%
Total Consumer Net Sales
$
1,451.8
$
1,352.1
7.4
%
Specialty Products Division
76.2
83.9
-9.2
%
Total Net Sales
$
1,528.0
$
1,436.0
6.4
%
Twelve Months Ended
Percent
12/31/2023
12/31/2022
Change
Household Products
$
2,484.1
$
2,272.0
9.3
%
Personal Care Products
2,087.1
1,859.0
12.3
%
Consumer Domestic
$
4,571.2
$
4,131.0
10.7
%
Consumer International
975.7
896.1
8.9
%
Total Consumer Net Sales
$
5,546.9
$
5,027.1
10.3
%
Specialty Products Division
321.0
348.5
-7.9
%
Total Net Sales
$
5,867.9
$
5,375.6
9.2
%
Non-GAAP Measures:
The following discussion addresses the non-GAAP measures used in
this press release and reconciliations of these non-GAAP measures
to the most directly comparable GAAP measures. These non-GAAP
financial measures should not be considered in isolation from or as
a substitute for the comparable GAAP measures. The following
non-GAAP measures may not be the same as similar measures provided
by other companies due to differences in methods of calculation and
items and events being excluded.
Organic Sales Growth:
This press release provides information regarding organic sales
growth, namely net sales growth excluding the effect of
acquisitions, divestitures and foreign exchange rate changes.
Management believes that the presentation of organic sales growth
is useful to investors because it enables them to assess, on a
consistent basis, sales trends related to products that were
marketed by the Company during the entirety of relevant periods,
excluding the impact of acquisitions, divestitures, and foreign
exchange rate changes that are out of the control of, and do not
reflect the performance of the Company and management.
Adjusted Selling, General, and Administrative Expense
(SG&A):
This press release also presents adjusted SG&A, namely,
SG&A calculated in accordance with GAAP, as adjusted to exclude
significant one-time items that are not indicative of the Company’s
period-to-period performance. We believe that this metric provides
investors a useful perspective of underlying business trends and
results and provides useful supplemental information regarding our
year over year SG&A expense.
Adjusted Income from Operations:
This press release also presents adjusted income from
operations, namely income from operations calculated in accordance
with GAAP, as adjusted to exclude significant one-time items that
are not indicative of the Company’s period-to-period performance.
We believe that this metric provides investors a useful perspective
of underlying business trends and results and provides useful
supplemental information regarding our year over year income from
operations.
Adjusted EPS:
This press release also presents adjusted earnings per share,
namely, EPS calculated in accordance with GAAP, as adjusted to
exclude significant one-time items that are not indicative of the
Company’s period-to-period performance. We believe that this metric
provides investors a useful perspective of underlying business
trends and results and provides useful supplemental information
regarding our year over year EPS growth.
Adjusted Effective Tax Rate:
This press release also presents an adjusted effective tax rate,
namely, the effective tax rate calculated in accordance with GAAP,
as adjusted to exclude significant one-time items that are not
indicative of the Company’s period-to-period performance. We
believe that this metric provides investors a useful perspective of
underlying business trends and results and provides useful
supplemental information regarding our effective tax rate.
CHURCH & DWIGHT CO.,
INC.
Organic Sales
Three Months Ended
12/31/2023
Total
Worldwide
Consumer
Consumer
Specialty
Company
Consumer
Domestic
International
Products
Reported Sales Growth
6.4%
7.4%
6.4%
11.9%
-9.2%
Less:
Acquisitions
0.7%
0.7%
0.7%
0.2%
0.0%
Add:
FX / Other
-0.4%
-0.5%
0.0%
-2.7%
0.0%
Divestitures
0.0%
0.0%
0.0%
0.0%
0.0%
Organic Sales Growth
5.3%
6.2%
5.7%
9.0%
-9.2%
Twelve Months Ended
12/31/2023
Total
Worldwide
Consumer
Consumer
Specialty
Company
Consumer
Domestic
International
Products
Reported Sales Growth
9.2%
10.3%
10.7%
8.9%
-7.9%
Less:
Acquisitions
3.9%
4.1%
5.0%
0.3%
0.0%
Add:
FX / Other
0.0%
0.0%
0.0%
-0.1%
0.0%
Divestitures
0.0%
0.0%
0.0%
0.0%
0.0%
Organic Sales Growth
5.3%
6.2%
5.7%
8.5%
-7.9%
CHURCH & DWIGHT CO.,
INC.
Reconciliation of GAAP
Measures to Non-GAAP Measures (Unaudited)
(Dollars in millions, except per share
data)
For the quarter ended December
31, 2023
For the quarter ended December
31, 2022
Change
% of NS
% of NS
Adjusted SG&A
Reconciliation
SG&A - Reported
$
246.2
16.1
%
$
611.2
42.6
%
-2650
bps
Flawless Impairment
$
-
0.0
%
(411.0
)
-28.6
%
2860
bps
Hero Restricted Stock
$
(7.3
)
-0.5
%
(6.0
)
-0.5
%
0
bps
SG&A - Adjusted (non-GAAP)
$
238.9
15.6
%
$
194.2
13.5
%
210
bps
For the quarter ended December
31, 2023
For the quarter ended December
31, 2022
Change
Adjusted Income From Operations
% of NS
% of NS
Income From Operations -
Reported
$
216.1
14.2
%
$
(198.4
)
-13.8
%
-208.9
%
Flawless Impairment
$
-
0.0
%
411.0
28.6
%
Hero Restricted Stock
$
7.3
0.5
%
6.0
0.5
%
Income From Operations - Adjusted
(non-GAAP)
$
223.4
14.7
%
$
218.6
15.3
%
2.2
%
For the quarter ended December
31, 2023
For the quarter ended December
31, 2022
Change
Adjusted Diluted Earnings Per Share
Reconciliation
Diluted Earnings Per Share -
Reported
$
0.62
$
(0.67
)
-192.5
%
Flawless Impairment
$
-
1.26
Hero Restricted Stock
$
0.03
0.03
Diluted Earnings Per Share - Adjusted
(non-GAAP)
$
0.65
$
0.62
4.8
%
For the year ended December
31, 2023
For the year ended December
31, 2022
Change
Adjusted Diluted Earnings Per Share
Reconciliation
Diluted Earnings Per Share -
Reported
$
3.05
$
1.68
81.5
%
Flawless Impairment
$
-
$
1.26
Hero Restricted Stock
$
0.12
$
0.03
Diluted Earnings Per Share - Adjusted
(non-GAAP)
$
3.17
$
2.97
6.7
%
Reported and Organic Forecasted Sales
Reconciliation
For the Quarter
For the Year
Ended
Ended
March 31, 2024
December 31, 2024
Reported Sales Growth
4.0%
4.5%
Megalac / Exit of Business
0.5%
0.5%
FX / Other
-0.5%
-0.5%
Organic Sales Growth
4.0%
4.5%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240202916999/en/
Rick Dierker Chief Financial Officer 609-806-1200
Church and Dwight (NYSE:CHD)
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