Church Dwight 2025 Q1 Earnings Misses Targets as Net Income Declines 3.3%

Church & Dwight reported its fiscal 2025 Q1 earnings on May 01st, 2025. The company's earnings per share (EPS) fell short of expectations, landing at $0.90 compared to analysts' anticipated $0.89. Additionally, Church & Dwight adjusted its fiscal year 2025 guidance, projecting organic sales growth between 0% and 2%, a reduction from the previous estimate of 3% to 4%. This cautious outlook reflects ongoing market challenges, including significant tariff exposure and strategic portfolio adjustments aimed at mitigating these risks.

Revenue
Church & Dwight experienced a decline in total revenue, reporting $1.47 billion for Q1 2025, a 2.4% drop from $1.50 billion in the same quarter of the previous year. The Consumer Domestic segment generated $1.13 billion, while the Household Products division contributed $614.90 million. Personal Care Products added $514.90 million, and the Consumer International segment reported $261.90 million. The Specialty Products Division accounted for $75.40 million, culminating in total consolidated net sales of $1.47 billion.

Earnings/Net Income
Church & Dwight's EPS decreased by 4.3% to $0.90 in Q1 2025, down from $0.94 in Q1 2024. The company's net income also declined, registering at $220.10 million, a decrease of 3.3% from the previous year's $227.70 million. Despite the drop in earnings, the company maintains a strong history of profitability over the past two decades, demonstrating operational resilience. The EPS performance indicates a challenging quarter for the company.

Price Action
The stock price of Church & Dwight edged down 0.65% during the latest trading day, dropped 7.81% during the most recent full trading week, and plummeted 16.09% month-to-date.

Post-Earnings Price Action Review
The backtest results for Church & Dwight (CHD) reveal that earnings report metrics such as revenue, net income, and EPS have varying impacts on stock price. Historically, following earnings release, the stock has shown a short-term performance with a 45% win rate over 3 and 10 days, indicating that the stock price increases nearly half the time during these periods. Long-term performance remains stable with a 45% win rate over 30 days. Average returns in the immediate aftermath of earnings release are slightly negative at -0.11% for 3 days, modestly positive at 0.35% for 10 days, and minimal at 0.01% for 30 days. The maximum return observed was 2.06% on day 56 post-release, suggesting potential gains while overall performance remains muted. In conclusion, Church & Dwight’s earnings reports tend to have a neutral to slightly positive impact on stock price, with the most significant return observed in the longer term.

CEO Commentary
Rick Dierker, Chief Executive Officer, emphasized the company's strong brand performance despite a slowing consumption environment. He noted gains in dollar and volume share across most brands, highlighting a 3.0% organic decline in the Domestic Division due to retailer inventory reductions. The International Division reported 5.8% organic growth, and the Specialty Products Division saw a 3.2% increase. Dierker stressed strategic portfolio decisions focused on core brands to reduce tariff exposure.

Guidance
Church & Dwight projects organic sales growth of 0% to 2% and adjusted EPS growth of 0% to 2% for 2025. The company anticipates reducing its gross tariff exposure of approximately $190 million by around 80% through strategic actions. An expected Q2 charge of $60 to $80 million for non-cash impairments and inventory charges is aimed at strengthening future positioning. The guidance reflects cautious optimism in navigating current market challenges.

Additional News
Within recent weeks, Church & Dwight has announced strategic measures to mitigate tariff exposure, including transitioning the sourcing of Waterpik flossers for the U.S. market away from China. The company also revised its fiscal year 2025 organic sales growth target to 0%-2%, down from the previous 3%-4%. Additionally, Church & Dwight recently increased its quarterly dividend by 4%, reflecting confidence in cash generation and financial flexibility to pursue acquisitions and invest in business growth. These steps are part of broader efforts to enhance operational efficiency and market competitiveness amidst global challenges.