Church & Dwight (NYSE: CHD) reported Q1 EPS of $0.83, $0.06 better than the analyst estimate of $0.77. Revenue for the quarter came in at $1.17 billion versus the consensus estimate of $1.14 billion.

GUIDANCE:

Withdrawn due to uncertainty of duration & extent of COVID-19

Matthew Farrell, Chief Executive Officer, commented, “The global impact of COVID-19 continues to evolve daily. Our focus is on the safety of our employees, meeting the needs of our customers and consumers, and ensuring our brands are even stronger moving forward.

“We have taken decisive actions to promote the safety of employees by enhancing operating protocols at all of our global locations in compliance with public health requirements, recommendations and guidelines. These precautions include working from home where practical, temperature checking employees upon arriving at work locations, social distancing, restricting access to sites, flexible sick pay practices, and frequent sanitization of work areas. A global response team, including members of senior management, is in constant contact with local site leaders, so the Company can react quickly and appropriately.

“We have expanded our short-term manufacturing capacity for our cleaning products (including laundry detergent, baking soda, and cleaners) and health care products (including vitamins and nasal hygiene) and are working closely with our suppliers and retail partners to ensure sustained supply to keep pace with increased demand. It is essential during a crisis that consumers have access to the brands they trust, and to that end, Church & Dwight is committed to ensuring their availability.

“This crisis emphasizes the ongoing responsibility and commitment of Church & Dwight to our local and global communities. More now than ever, we continue to support those in need through donations. For example, we are providing surgical masks, product donations, hand sanitizer, and monetary donations through the Church & Dwight Employee Giving Fund. We thank all those who are working to keep people safe throughout this crisis.

“Revenue growth, gross margin, earnings, and cash generation exceeded our expectations. Our results were influenced, in part, by pantry loading in the month of March. In March, there was a 30% increase in domestic consumption across many of our brands due to unprecedented consumer demand. This created out-of-stocks on shelf and depleted retailer inventories. In April, retailer orders and shipments are high as we work to replenish inventories and store shelves. At the same time, consumption across our combined brands is slightly positive in April despite domestic pantry de-loading.

“In summary, Q1 was a strong quarter for Church & Dwight. Our categories saw outsized growth in the quarter, and our market shares are healthy. Both our household and personal care businesses delivered strong growth as consumers and retailers focused on core essentials. Of the 15 domestic categories which Church & Dwight competes, 10 grew consumption this quarter, and 7 of those 10 had double digit growth from unprecedented shifts in consumer spending due to the COVID-19 pandemic. The International business grew 7% organically and also benefited from pantry loading. SPD recorded its second consecutive quarter of organic growth as the dairy industry continued to improve. This quarter was not the one we expected, and I am proud of how Church & Dwight came together and reacted to the needs of our customers and consumers.”

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