Church & Dwight Co. ( NYSE: CHD ) reported organic sales rose 0.4% in Q4 driven by 4.2% positive price and product mix offset by 3.8% lower volume. The organic sales tally was ahead of the company's guidance for a 1% decline for the quarter.
CHD said it saw U.S. portfolio consumption grow in 13 of 17 categories in Q4. Of note, the trade down to value laundry detergent continued as Arm & Hammer liquid detergent achieved an all-time high market share again for the quarter. Meanwhile, discretionary brands Waterpik, Flawless and the vitamin business continued to experience lower consumption resulting in a 4% headwind to organic sales in the quarter.
Gross margin fell back 50 basis points to 42.0% of sales due to the impact of higher manufacturing costs, net of pricing and productivity. Adjusted SG&A came in at 13.5% sales vs. 14.9% a year ago. Adjusted income from operations was $218.6M vs. $176.4M a year ago.
Looking ahead, CHD expects Q1 revenue and profits to continue to be negatively impacted by softness in discretionary brands and the timing of equity grants. Guidance was set for sales growth of approximately 4% in Q1, organic sales growth of approximately 1%, gross margin expansion and higher marketing and SG&A spending. Adjusted EPS of $0.75 is forecast. vs. $0.80 consensus.
Shares of Church & Dwight ( CHD ) fell 1.95% in postmarket trading to $78.25 following the earnings update.
For further details see:
Church & Dwight dips after setting profit guidance below expectations