Church & Dwight Co., Inc. (CHD) Earnings & Analysis

Latest quarter

Church & Dwight reported Q2 FY2026 revenue above the consensus by 1.79%, although both reported revenue and the estimate rounded to $1.5 billion. Adjusted earnings per share of $0.89 matched the consensus.

Revenue rose 1.57% from a year earlier. CEO Rick Dierker said organic sales grew 5.8%, led by 4.3% volume growth and 1.5% favorable price and mix. He reported organic growth in both the domestic and international businesses, while the specialty products division also grew sales.

The company reported gross margin of 45.4%, compared with 43.0% a year earlier, and operating margin of 18.1%, compared with 17.4%. Free cash flow rose to $256.9 million from $208.3 million.

Against the company’s own outlook, Dierker said organic sales growth exceeded its 3% forecast, while adjusted EPS exceeded its 88-cent forecast. CFO Lee McChesney said productivity, acquisitions and portfolio actions helped offset inflation, tariffs and transportation costs.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

On the Q2 call, CEO Rick Dierker said the company’s categories were growing ahead of its original expectations and that consumer spending remained resilient. He attributed organic growth across all three divisions primarily to volume, with positive pricing and product mix also contributing.

Dierker said domestic growth included contributions from TheraBreath, Hero, Arm & Hammer Cat Litter and Zicam. He said Arm & Hammer laundry maintained its share even as promotions increased across the category. In response to questions about competition, he said the company intended over time to return to historical promotional levels and pointed to innovation across its laundry offerings.

On pricing, Dierker said consumers were financially pressured and responded more than usual to promotions. He said Church & Dwight was addressing inflation through productivity and promotional optimization, but would consider pricing if inflation stayed elevated for longer and those measures were insufficient. As he put it, “We’re fighting it with productivity.”

CFO Lee McChesney said adjusted gross margin benefited from productivity programs, acquisitions, portfolio actions and volume, price and mix, offsetting inflation, tariffs and transportation costs. He said the company used results above its expectations to increase brand investment. Asked about spending, Dierker said the company also planned to bring some AI initiatives forward so it could scale them faster.

Dierker said Church & Dwight completed its Miss Mouth acquisition in June and was encouraged by initial sales. He expected Touchland sales growth in the second half, supported by innovation and collaborations, and said international expansion would begin contributing in 2027.

For the third quarter, McChesney said on the call that Church & Dwight expected approximately 3% organic sales growth and adjusted EPS of approximately 89 cents. The company subsequently reported adjusted EPS of $0.92 for that quarter.

Guidance

In its October update, Church & Dwight projected approximately 5% organic sales growth for FY2026, at the high end of its earlier 4% to 5% range. It revised reported sales growth to approximately 0.5%, from its previous range of flat to 1%.

The company expects adjusted EPS growth of 7%, compared with its earlier 6% to 8% range, and adjusted gross margin expansion of approximately 100 basis points, compared with the call’s 100 to 120 basis points. It also expects capital expenditures of approximately $125 million, versus the earlier approximately $130 million.