Church & Dwight sees FY24 reported EPS down about 23%

FY24 EPS consensus $3.43. CEO Farrell stated, “In an uncertain consumer environment, we completed an exceptional nine months delivering strong sales and volume growth, gross margin expansion, and earnings growth. We remain focused on execution and offering products to consumers that provide high performance at a great value. We are thrilled with the success of our new product launches. Our full year outlook continues to reflect strong growth across all key measures, including reported and organic sales, volume, gross margin expansion, operating income and cash flow. While US consumption in our categories improved slightly in September and October, we remain cautious regarding the US consumer and category growth rates for Q4. We continue to expect full year reported sales to be approximately 3.5% and organic sales growth to be approximately 4%. We are raising our outlook for full year adjusted gross margin expansion to approximately 110 basis points versus 2023 (previously 100-110 basis points). We continue to expect carryover pricing, improved mix, higher volume and productivity to offset higher manufacturing costs. We will continue to invest behind our brands in support of our innovations to drive consumption and share gains leading into 2025 and now expect marketing as a percentage of sales to be above 11% (previously ~11%). As in past years, when we have strong business performance, we invest for the future. Our Q4 investments will focus on driving future growth with higher marketing and SG&A investments. This incremental investment spending will enable us to enter 2025 with momentum. We now expect full year reported EPS to decline approximately 23% due to the asset impairment charge. We continue to expect full year adjusted EPS growth to be approximately 8%1. We now expect our tax rate to be approximately 22.5%. Cash flow from operations is now expected to be approximately $1.1 billion (previously $1.08 billion). We expect 2024 capital expenditures of approximately $180 million in support of our growing brands. We expect capital spending to return to historical levels (approximately 2% of sales) in 2025. Our capital allocation priorities remain unchanged, and we expect to 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).”