CHD Q2 Earnings Match Estimates, Sales Beat on Strong Organic Growth

CHD Benefits From Broad-Based Brand Strength

Organic sales growth exceeded management’s 3% expectation for the quarter. Performance was supported by THERABREATH mouthwash and toothpaste, HERO, ARM & HAMMER cat litter and ZICAM.

Global e-commerce sales advanced 22.7% and represented 25.5% of total consumer sales. Management also cited encouraging initial sales from MISS MOUTH’S MESSY EATER following the brand’s acquisition in June.

Church & Dwight’s Adjusted Gross Margin Expands

Adjusted gross margin increased 40 basis points year over year to 45.4%. The improvement reflected higher volumes, productivity and favorable mix from acquisitions and portfolio actions.

These benefits were partly offset by inflation and higher transportation costs. Marketing expenses rose $8.2 million to $165.3 million and represented 10.8% of net sales, up 40 basis points from the prior-year quarter.

CHD Sees Pressure From Higher Operating Costs

Adjusted selling, general and administrative expenses were $241.4 million, or 15.8% of net sales. The expense ratio increased 220 basis points year over year, reflecting TOUCHLAND-related amortization and operating costs.

Adjusted income from operations declined $28.7 million to $287.2 million. Adjusted operating margin contracted 220 basis points to 18.8%, as gross margin expansion and organic growth were more than offset by higher marketing and administrative spending.

Church & Dwight Posts Growth Across Divisions

Consumer Domestic net sales increased 0.1% to $1,155.8 million. Organic sales rose 5.1%, supported by 3.6% volume growth and a 1.5% contribution from pricing and product mix.

Consumer International net sales increased 7.2% to $297.5 million. Organic sales climbed 9.1%, driven by a 7.3% jump in volume and a 1.8% benefit from price and mix. THERABREATH, HERO and BATISTE were the main growth contributors.

Specialty Products net sales advanced 2.8% to $76.7 million. Organic sales also increased 2.8%, reflecting a 1.3% rise in volume and a 1.5% contribution from pricing and product mix.

CHD Maintains Strong Cash Generation

Cash from operations totaled $461.6 million in the first six months of 2026, up 10.8% year over year. Capital expenditures increased $22.8 million to $61.8 million as the company continued to invest in capacity and sales growth initiatives.

Church & Dwight ended June with $254.8 million in cash and approximately $2,300 million in total debt. Full-year capital expenditures are still expected to be approximately $130 million, or about 2% of sales.

Church & Dwight Raises Its Full-Year Outlook

Management now expects organic sales growth of 4% to 5% in 2026, up from its prior forecast of 3% to 4%. Reported sales are projected to range from flat to growth of 1% compared with the earlier expectation for a decline of 1.5% to 0.5%.

Adjusted earnings are now expected to increase 6% to 8% compared with the previous forecast of 5% to 8% growth. Adjusted gross margin is projected to expand 100 to 120 basis points, while cash from operations is expected to reach approximately $1,175 million.

CHD Sets Q3 Targets

For the third quarter of 2026, the company expects organic sales growth of approximately 3%. Reported sales are projected to decline about 1%, reflecting strategic portfolio actions completed in 2025.

Adjusted earnings are expected to be approximately 89 cents per share, up 10% year over year. The outlook also assumes continued gross margin expansion, marketing expenses of roughly 12% of sales, higher SG&A expenses and an adjusted tax rate of approximately 21.5%.

This Zacks Rank #3 (Hold) stock has risen 1.7% over the past three months compared with the industry’s 2.6% growth.

Better-Ranked Stocks to Consider

United Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here

The consensus estimate for United Natural’s current fiscal-year earnings per share (EPS) stands at $2.52, which implies substantial growth from the year-ago period earnings of 71 cents. UNFI delivered a trailing four-quarter earnings surprise of 29.9%, on average.

US Foods Holding Corp. USFD engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2 (Buy). US Foods Holding delivered a trailing four-quarter earnings surprise of 1.4%, on average.

The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.1% and 16.3%, respectively, from the year-ago figures.

The Vita Coco Company, Inc. COCO, a leading beverage company that develops, markets and distributes coconut water and other plant-based beverages, currently sports a Zacks Rank #1. COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average.

The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and earnings calls for growth of 31.6% and 64.7%, respectively, from the year-ago figures.

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