Church & Dwight Co. ( NYSE: CHD ) bested consensus estimates with its Q3 earnings report amid a noted shift in consumer behavior.
Organic sales declined 0.7% during the quarter due to a volume decline of 8.5%, partially offset by positive pricing of 7.8%. Total sales were dragged down a full percentage point due to the impact of FX.
The household products giant said the U.S. portfolio grew consumption in 11 of 17 categories, while also seeing a trade-down effect in some categories.
"We gained share on 7 of our 14 power brands and expect market share gains to continue in Q4 as we invest behind our brands and maintain high case fill levels. The strong performance of these businesses is offsetting the impact of the discretionary businesses on reported sales," noted CEO Matthew Farrell.
CHD's gross margin rate fell back 250 bps to 41.7% of sales reflecting higher commodities and third-party manufacturing costs as well as higher promotional spending. Looking forward, the company will continue to pursue additional measures to offset these higher costs including pricing, productivity and pack size changes. The gross margin rate was in line with the expectation of analysts.
For the full year, Church & Dwight ( CHD ) expects sales growth of +3%, organic Sales growth of +1%, EPS to fall -13% to -11% and adjusted EPS of $2.93 to 2.97 vs. the consensus mark of $2.97.
Shares of CHD were inactive in the premarket session on Friday.
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Church & Dwight tops estimates, points to strong consumption trends