Church & Dwight (NYSE: CHD) reported Q3 EPS of $0.70, $0.03 better than the analyst estimate of $0.67. Revenue for the quarter came in at $1.24 billion versus the consensus estimate of $1.19 billion.

GUIDANCE:

Church & Dwight sees FY2020 EPS of $2.79-$2.81, versus the consensus of $2.82.

• Mr. Farrell stated, “2020 is shaping up to be another outstanding year for Church & Dwight. The Company is well positioned in the current economic environment and the future, due to a combination of being in the right categories and having a balance of value and premium brands and the ability to make investments.
• “Given our strong year to date performance, we have raised our full year outlook for sales, EPS, and cash flow. We now expect approximately 11% full year 2020 sales growth (previously 9-10%) and approximately 9% organic sales growth (previously 7-8%). Our cash from operations is now expected to be $975 million or a 13% increase versus prior year.
• “We will continue to make incremental investments in Q4 as a result of our strong results. As in years past, these actions help the Company enter the coming year with momentum. Specifically, we expect significantly higher marketing spending, investments for surge capacity in manufacturing, R&D, new product development, consumer research, digital advertising, and predictive analytics. These investments have historically proven to position the Company for future growth.
• “We expect gross margin to contract 20 basis points for the full year due to tariffs on WATERPIK products, COVID-19 related costs, new product support, the impact of acquisition accounting, and incremental manufacturing and distribution capacity investments. Due to non-recurring Q4 supply chain costs, we now expect second half gross margin to be down 190 basis points (previously down 150 basis points). Our marketing as a percentage of sales is now expected to be flat for the full year given significant increases in the back half. Accordingly, we now expect adjusted EPS growth to be $2.79 to $2.81 or up 13%-14%.1
• “In Q4, we expect reported sales growth of approximately 9%, organic sales growth of approximately 8%, gross margin contraction, significantly higher marketing expense, and a lower tax rate. As a result, we expect Q4 EPS to be $0.50-$0.52 per share excluding the acquisition earn-out adjustment.”1

For earnings history and earnings-related data on Church & Dwight (CHD) click here.