On Tuesday, Shares of Church & Dwight Co., Inc. (NYSE: CHD) declined -1.79% to $54.89. The stock opened its trade at $55.92 and after floating in a price range of $54.81 to $55.92; the stock grabbed the investor’s attention and traded 1.38M shares as compared to its average daily volume of 2.50M shares. The stock’s institutional ownership stands at 83.60%.
Church & Dwight Co., Inc. (CHD) recently declared first quarter 2018 stated EPS of $0.63, a 24% increase, surpassing the Company’s outlook. First quarter prior year included a $0.01 charge related to the sale of the Brazilian Specialty Products business.
First quarter net sales grew 14.7% to $1,006.00M. Organic sales grew 3.8% driven by global consumer products growth of 4.2%. Global consumer organic sales were driven by volume growth of 4.7%, partially offset by 0.5% from unfavorable product mix and pricing, which continues to improve.
First Quarter Review:
Consumer Domestic net sales were $751.40M, a $91.70M or 13.9% increase driven by recent acquisitions and household and personal care sales growth. Organic sales increased 3.6% because of higher volume (+5.3%) offset by price and product mix (-1.7%). Growth was led by ARM & HAMMER liquid and unit dose laundry detergent, ARM & HAMMER cat litter, OXICLEAN stain fighters, BATISTE dry shampoo, VITAFUSION and L’IL CRITTERS gummy vitamins and TOPPIK and VIVISCAL hair care businesses.
Consumer International net sales were $180.70M, a $37.60M or 26.3% increase driven by recent acquisitions, expansion of our export business, and broad-based household and personal care growth. Organic sales increased 6.8% because of higher volume (+1.6%) and price and product mix (+5.2%). Organic sales were driven mainly by OXICLEAN in the export business, STERIMAR, ARM & HAMMER toothpaste and OXICLEAN in Mexico and FEMFRESH and BATISTE in Australia.
Specialty Products net sales were $73.90M, a -$0.50M or -0.7% decrease. Organic sales reduced -1.0% because of lower volume (-3.8%) offset by commodity pass-through pricing (+2.8%) mainly in the animal productivity business. Demand in the dairy industry is significantly reduced because of low milk prices. Poultry industry demand continues to grow, reducing our dependence on the dairy industry.
Marketing expense was $99.90M, a boost of $9.10M or 10.0%. Marketing expense as a percentage of net sales reduced 40 basis points to 9.9% reflecting 2017 acquisitions which have a lower spend rate. Excluding acquisitions, marketing as a percentage of net sales increased 20 basis points to 10.5%.
Selling, general, and administrative expense (SG&A) was $131.30M or 13.1% of net sales, a 30 basis point increase, mainly because of acquisitions, counting intangible amortization costs.
Income from Operations was $220.30M or 21.9% of net sales.
Other Expense was $21.70M, mainly driven by incremental interest expense on higher debt levels related to recent acquisitions.
The effective tax rate was 21.4% contrast to 30.9% in 2017. This change was mainly because of the impact of the Tax Cuts and Jobs Act (“TCJA”) enacted in the U.S. in December 2017.
Operating Cash Flow:
For the first three months of 2018, net cash from operating activities was $155.50M, a $24.00M increase from the prior year because of higher cash earnings and a smaller increase in working capital. Capital expenditures for the first three months were $9.90M, a $7.10M increase from the prior year.
At March 31, 2018, cash on hand was $119.80M, while total debt was $2,354.80M.
CHD has a market value of $13.69B while its EPS was booked as $1.96 in the last 12 months. The stock has 244.90M shares outstanding. In the profitability analysis, the company has gross profit margin of 45.60% while net profit margin was 19.70%. Beta value of the company was 0.41; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 2.80.