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CHURCH & DWIGHT CO INC /DE/ (CHD)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 delivered clean beats: revenue $1.586B vs $1.536B consensus*, and adjusted EPS $0.81 vs $0.74 consensus*, with organic sales +3.4% and adjusted gross margin up 10 bps, both ahead of the company’s outlook .
  • FY25 outlook improved: reported sales growth raised to ~+1.5% (from ~+1.0%), adjusted gross margin contraction eased to ~40 bps (from ~60 bps), adjusted EPS nudged to ~$3.49, and cash from operations raised to ~$1.2B; marketing now expected to exceed 11% of sales .
  • Strategic portfolio actions continue: exit of FLAWLESS, SPINBRUSH and WATERPIK showerheads remains on track by early 2026; vitamin brands under strategic review; newly acquired Touchland exceeded initial expectations with double‑digit consumption growth .
  • Tariff headwind sharply reduced: FY25 tariff impact now ~+$25M (prior ~$30M); 12‑month tariff run‑rate down to ~$25M (from ~$60M), aided by supply chain moves and targeted pricing .
  • Watch Q4 setup: company guides adjusted EPS ~$0.83 vs Street ~$0.84*, and organic growth ~+1.5% given prior‑year port‑strike pantry load comps and ongoing VMS weakness—likely a modest tempering point despite strong Q3 execution .

What Went Well and What Went Wrong

What Went Well

  • Broad-based organic growth and share gains: Organic +3.4% with Domestic +2.3%, International +7.7%, and Specialty +4.2%; management emphasized innovation and balanced value/premium portfolio driving share wins .
  • Premium personal care momentum: THERABREATH consumption +17% with 21.8% share; HERO remains #1 in acne at 23.6% share; Touchland delivered double‑digit consumption growth and outperformed early expectations .
  • Margins and cash flow ahead duplication: Adjusted gross margin 45.1% (+10 bps YoY) and ~110 bps ahead of outlook; Q3 cash from operations $435.5M (+19.6% YoY) supporting $300M in repurchases in Q3 ($600M YTD) .
    • “Adjusted EPS was $0.81… $0.09 higher than our $0.72 outlook” — CFO .

What Went Wrong

  • Price/mix pressure: Companywide volume +4.0% but price/mix −0.6%, driven by VMS pricing/promotional actions and value resets in BATISTE, and consumer trade to larger pack sizes; CFO cited inflation and tariffs as headwinds offset by productivity .
  • VMS remains a drag: continued negative consumption trends, seasonal weighting in Q4 amplifies impact; strategic alternatives under review with a decision targeted by year‑end 2025 .
  • Category and competitive dynamics: one litter competitor ran heavier discounts; management noted port‑strike‑inflated comps in October will pressure Q4 category prints despite underlying brand strength .

Financial Results

Headline Metrics (GAAP unless noted)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($B)$1.5106 $1.4671 $1.5063 $1.5856
Organic Sales Growth (%)—−1.2% +0.1% +3.4%
Adjusted EPS ($)$0.79 $0.91 $0.94 $0.81
Reported EPS ($)$(0.31) $0.89 $0.78 $0.75
Adjusted Gross Margin (%)45.0% 45.1% 45.0% 45.1%
Adjusted Operating Margin (%)17.7% 20.6% 21.0% 17.1%

Actual vs S&P Global Consensus

MetricQ2 2025Q3 2025Q4 2025 (Guide vs Street)
Revenue ($B)$1.5063 vs $1.4885* $1.5856 vs $1.5358* — (Street $1.6427B*)
Adjusted/Primary EPS ($)$0.94 vs $0.858* $0.81 vs $0.737* Guide ~$0.83 vs $0.838*
EBITDA ($M)$361.1 vs $349.8* $310.7* vs $312.2*—

*Values retrieved from S&P Global.

Segment and Product Line Breakdown (Q3 2025)

CategoryNet Sales ($M)YoY GrowthOrganic Growth
Consumer Domestic1,219.7 +4.2% +2.3%
Consumer International290.1 +8.4% +7.7%
Specialty Products Division75.8 +5.1% +4.2%
Household Products (Domestic)646.7 +1.5% —
Personal Care Products (Domestic)573.0 +7.4% —
Total1,585.6+5.0% +3.4%

KPIs and Operating Items

KPIQ3 2025Context
E-commerce as % of total consumer sales23% (vs 21% LY) Ongoing channel strength
Marketing as % of sales12.8% +50 bps YoY; investment to support innovation
Adjusted effective tax rate21.6% Down from 23.3% in Q3 2024
Cash from operations (quarter)$435.5M +19.6% YoY
Share repurchase$300M in Q3; $600M YTD ASR/open market
ARM & HAMMER Laundry~15% share; 30% HH penetration (all-time high) Value tier growth; lower promo depth
THERABREATH21.8% share; 11% penetration Category down; brand +17% consumption
HERO Acne23.6% share; 9% penetration Outpacing flat category
TouchlandDouble‑digit consumption growth; ~90%+ sales at Sephora/Ulta/Amazon Exceeded early expectations

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Reported Net Sales GrowthFY25~+1.0% midpoint ~+1.5% Raised
Organic Net Sales GrowthFY25~+1% midpoint ~+1% Maintained
Adjusted Gross Margin vs 2024FY25−60 bps −40 bps Raised (less contraction)
Adjusted EPSFY25~$3.47 midpoint ~$3.49 Raised
Cash from OperationsFY25~$1.05–$1.10B ~$1.2B Raised
Marketing as % SalesFY25~11% >11% Raised
Other Expense (Adj.)FY25~$65M ~$65M Maintained
Adjusted Tax RateFY25~23% ~22.5% Lowered
Tariff ImpactFY25~$30M ~$25M Lowered
12‑mo Tariff Run‑RateRolling~$60M ~$25M Lowered
Capital ExpendituresFY25~$130M ~$120M Lowered
Reported Sales GrowthQ4 2025—~+3.5% New
Organic Sales GrowthQ4 2025—~+1.5% New
Adjusted EPSQ4 2025—~$0.83 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q1 2025)Current Period (Q3 2025)Trend
Value vs PremiumSequential category growth improvements; value/premium balance emphasized . Q1 destocking pressured domestic volumes .Value tier strengthening in laundry; ARM & HAMMER share/penetration up with lower promo depth . Premium personal care (THERABREATH, HERO, Touchland) outpacing categories .Improving balance
Tariffs & Supply ChainFY25 tariff headwind ~$30M; 12‑mo run‑rate ~$60M; exits of lower‑margin businesses to mitigate . Q1: $190M gross exposure with actions to reduce ~80% .FY25 tariff headwind now ~$25M; 12‑mo run‑rate ~$25M after productivity, pricing, and rate changes .Favorable
Vitamin Business (VMS)Strategic review underway; pricing/promotional resets; innovation plans .Still a headwind; core SKUs declining less; some retailer wins; decision expected by YE25 .Stabilizing, not fixed
TouchlandClosed in July; initial growth ahead of category .Double‑digit consumption; exceeded expectations; focused on Sephora/Ulta/Amazon; cautious channel expansion .Positive momentum
Promotions/Price MixQ2: adjusted GM −40 bps with tariffs and mix; marketing up 30 bps .Price/mix −0.6% companywide; larger pack mix and VMS/BATISTE pricing actions; competitors more aggressive on promo in some categories .Mixed
InternationalQ2 organic +4.8% broad‑based .Q3 organic +7.7%; broad‑based growth; strong pipeline and partner enthusiasm .Improving
E‑commerceQ2 online 23% of consumer sales .Q3 online 23% (vs 21% LY) .Stable

Management Commentary

  • “We had a fantastic quarter in a tough environment. Organic sales grew 3.4%... Adjusted EPS was $0.81, which was $0.09 higher than our $0.72 outlook.” — CEO .
  • “Our third quarter adjusted gross margin was 45.1%… 110 basis points better than our outlook… offset 200 bps of inflation and tariff costs.” — CFO .
  • “Touchland… results exceeded our initial expectations… I’m even more optimistic about Touchland today than even a few months ago.” — CEO .
  • “We continue to remain on track… to exit the FLAWLESS, SPINBRUSH and WATERPIK showerhead businesses by early 2026… strategic review of our vitamin business… expect to reach a conclusion by the end of 2025.” — Company .
  • “We now expect higher 2025 reported sales growth of approximately 1.5%… adjusted gross margin to contract only 40 bps… adjusted EPS growth… approximately $3.49… cash flow from operations… approximately $1.2 billion.” — Company .

Q&A Highlights

  • Touchland trajectory and offsets: Mgmt expects Touchland’s strong baseline to help offset discontinued businesses and potential vitamin actions; notes lower interest income next year as cash was deployed .
  • Competitive intensity and value trend: In laundry, CHD reduced promotional depth while competitors increased; value tier growth supports ARM & HAMMER; larger pack sizes also affect price/mix .
  • International momentum and tariffs: International growth broad‑based; tariff mitigation reduced 12‑mo impact to ~$25M via productivity, pricing, and rate changes; commodities still “sticky” .
  • VMS green shoots and timing: Core SKUs declining at a lower rate; some distribution gains; decision on strategic alternatives targeted by YE25 .
  • Capital allocation: ~$600M YTD buybacks; M&A remains top cash priority with optionality to do both; balance sheet positioned for continued acquisitions .

Estimates Context

  • Q3 beats: Revenue $1.586B vs $1.536B consensus*; Primary EPS $0.81 vs $0.74 consensus*; EBITDA slightly below Street ($310.7M* vs $312.2M*) .
  • Q2 beats: Revenue $1.506B vs $1.489B*; EPS $0.94 vs $0.86* .
  • Q4 guide vs Street: Company guided adj EPS ~$0.83 vs $0.838* consensus; Street revenue sits at ~$1.643B*; near‑line guide may lead to modest estimate fine‑tuning .
  • FY25: Raised adjusted EPS to ~$3.49 with higher marketing (>11% of sales) and improved gross margin trajectory, suggesting upward bias to FY margin/FCF estimates despite Q4 conservatism .

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Quality quarter with clean beats and raised FY guide; the combination of share gains, productivity, and reduced tariff drag supports margin resilience into 2026 .
  • Near‑term narrative: slight Q4 EPS under consensus and lighter organic guide reflect tough comps (port‑strike pantry load) and VMS drag—expect some estimate trimming for Q4, but FY25 uplift offsets .
  • Structural positives: premium personal care flywheel (THERABREATH, HERO, Touchland) plus value leadership in laundry create a barbell that performed in a mixed macro and should continue to take share .
  • Tariff headwind materially de‑risked (~$25M FY25; 12‑mo run‑rate ~$25M) enhancing visibility to gross margin stabilization; productivity remains a key lever .
  • Capital deployment: robust FCF ($1.2B FY guide) funds buybacks and M&A; mgmt reiterates M&A priority with capacity to do both .
  • Watch items: VMS trajectory and strategic outcome; competitive promotions in litter; price/mix headwinds from larger pack shifts and select price resets .
  • Setup into 2026: elevated brand investment in H2’25 and strong Touchland momentum position CHD for sustained share gains and margin progress as tariff effects fade .
Sources: Q3 2025 press release and exhibits **[313927_5296eabb292943488357fb4fdbbf69d0_0]** **[313927_5296eabb292943488357fb4fdbbf69d0_1]** **[313927_5296eabb292943488357fb4fdbbf69d0_2]** **[313927_5296eabb292943488357fb4fdbbf69d0_3]** **[313927_5296eabb292943488357fb4fdbbf69d0_10]** **[313927_5296eabb292943488357fb4fdbbf69d0_12]** **[313927_5296eabb292943488357fb4fdbbf69d0_16]** **[313927_5296eabb292943488357fb4fdbbf69d0_18]** **[313927_5296eabb292943488357fb4fdbbf69d0_19]**; Q3 2025 earnings call transcript **[0000313927_2224112_1]** **[0000313927_2224112_2]** **[0000313927_2224112_4]** **[0000313927_2224112_6]** **[0000313927_2224112_7]** **[0000313927_2224112_8]** **[0000313927_2224112_10]** **[0000313927_2224112_12]** **[0000313927_2224112_14]**; Q2 2025 press release **[313927_0a22d89a02b04624b98762c6e04f16d5_0]** **[313927_0a22d89a02b04624b98762c6e04f16d5_1]** **[313927_0a22d89a02b04624b98762c6e04f16d5_3]** **[313927_0a22d89a02b04624b98762c6e04f16d5_14]**; Q1 2025 press release **[313927_4b744325bf4244ff8041a928ab1d20fd_0]** **[313927_4b744325bf4244ff8041a928ab1d20fd_1]** **[313927_4b744325bf4244ff8041a928ab1d20fd_13]**; Dividend press release **[313927_375b84d3a5c04e739498750efe0d4871_0]**.