Church & Dwight Co., Inc. Exceeds Expectations with Strong Sales Growth in 2024
Church & Dwight Co., today announced it surpassed its sales outlook with stronger-than-expected growth in 2024. The Company’s net sales for the full year increased by 4.1%, reaching $6,107.1 million, ahead of the anticipated 3.5% growth. Strong consumer demand across its portfolio and geographies contributed to this performance. Organic sales grew by 4.6%, driven by a 3.3% volume increase and a 1.3% boost from positive pricing and product mix.
Matthew Farrell, Chief Executive Officer, expressed his satisfaction with the Company’s results, stating, “We are thrilled to deliver another year of exceptional performance. Our results for 2024 highlight the strength of our brands, successful product innovations, and our consistent focus on execution. Volume was the primary driver of organic growth, and we expect this momentum to continue into 2025.”
The Company also saw an increase in marketing spend, which as a percentage of sales, rose by 50 basis points, helping to drive consumption and gain market share. Church & Dwight Global online sales rose to 21.4% of total consumer sales in 2024, further showcasing the Company’s growing digital presence. Thanks to strong sales, margin expansion, and efficient working capital management, Church & Dwight generated over $1.1 billion in cash from operations in 2024, enabling continued investments in its brands.
Business Segment Performance
All three of Church & Dwight’s business divisions showed solid growth in 2024. The Domestic Division posted a 3.5% organic sales increase, with five out of seven of the Company’s power brands gaining market share. The International Division grew by 9.0%, driven by strong performance in both its subsidiaries and the Global Markets Group. The Specialty Products Division reported a 7.1% increase in organic sales, underscoring its ability to drive growth even in a challenging environment.
The Company’s gross margin expanded by 160 basis points, while its adjusted gross margin grew by 110 basis points, benefiting from productivity gains, pricing actions, higher volumes, and strong contributions from higher-margin acquisitions, which more than offset inflationary pressures. This resulted in a 10.1% increase in adjusted pretax income.
Earnings Overview
Despite the robust performance, the Company’s full-year earnings per share (EPS) was $2.37, down 22.3% compared to 2023. This decrease was largely due to non-cash asset impairment charges related to the vitamin business. However, Church & Dwight’s adjusted EPS increased by 8.5% year-over-year to $3.44, surpassing the Company’s initial outlook of 8% growth, driven by the higher-than-expected sales.
In the fourth quarter, Church & Dwight achieved net sales of $1,582.0 million, representing a 3.5% increase over Q4 2023 and surpassing the expected growth of 1.5% to 2.5%. Organic sales in Q4 increased by 4.2%, exceeding the Church & Dwight Company’s outlook of 2% to 3%. The growth was driven by a 3.0% increase in volume and a 1.2% improvement from pricing and product mix. Reported EPS for the fourth quarter was $0.76, a 22.6% year-over-year increase, while adjusted EPS grew 18.5% to $0.77.
Segment Details for Q4
In the fourth quarter, the Domestic Consumer segment reported net sales of $1,225.7 million, marking a 2.7% increase, driven by strong performance in household and personal care categories. Organic sales rose by 2.7%, with volume growth of 2.0% and positive price and product mix contributing 0.7%. Key drivers included ARM & HAMMER™ liquid laundry detergent, HERO™ acne products, and THERABREATH™ mouthwash, although sales in the vitamin business and SPINBRUSH™ declined.
The International Consumer segment saw a 10.2% increase in net sales, reaching $285.1 million. Organic sales growth was 9.6%, driven by both volume (7.1%) and pricing/product mix (2.5%). HERO™, OXICLEAN™, and THERABREATH™ were the standout brands in this region.
Specialty Products net sales totaled $71.2 million, a decrease of 6.6% due to the exit of the Megalac and food safety businesses in early 2024. However, Church & Dwight organic sales grew 10.3%, benefiting from higher volume (5.3%) and a favorable product mix (5.0%). Growth was partially driven by a rebound in the bulk sodium bicarbonate business, which had been weak in Q4 2023.
Cost Management and Cash Flow
Gross margin for Q4 improved by 10 basis points to 44.7%, with adjusted gross margin remaining flat at 44.6%, as higher volumes and acquisitions offset the impact of rising manufacturing costs.
Marketing expenses were reduced by $11.1 million, primarily due to quarterly phasing in 2023, while selling, general, and administrative (SG&A) expenses were $243.3 million, including charges for restricted stock tied to the 2022 HERO acquisition. Adjusted SG&A came in at $240.2 million, representing 15.2% of net sales, a slight improvement from the prior year.
Income from operations rose by 18.8%, reflecting higher sales and gross margin growth. Other expenses decreased by $17.3 million, driven by lower interest expenses and increased interest income.
The effective tax rate for Q4 rose to 25.2% compared to 21.3% in Q4 2023, primarily due to non-recurring tax items.
Cash Flow and Capital Allocation
Cash from operations for 2024 reached $1.16 billion, an increase of $125.6 million, primarily driven by higher cash earnings and improvements in working capital. Church & Dwight Capital expenditures for the year were $179.8 million, down $43.7 million from the previous year, following the completion of major capacity expansion projects.
At year-end, the Company’s total debt was $2.2 billion, with $964.1 million in cash on hand, ensuring ample liquidity and flexibility for future acquisitions.
Dividend Increase
The Company’s Board of Directors declared a 4% increase in its quarterly dividend, raising it from $0.28375 to $0.295 per share, which translates to an annual dividend of $1.18 per share. This marks the 29th consecutive year of dividend increases, bringing the total payout to approximately $287 million. The quarterly dividend will be paid on March 3, 2025, to stockholders of record as of February 14, 2025.
Matthew Farrell commented, “This dividend increase reflects our strong cash generation and our confidence in continuing our solid performance. We expect another year of strong cash flow in 2025, which allows us to return value to our shareholders while maintaining the flexibility to invest in our business and pursue acquisitions.”
2025 Outlook and New Product Innovations
Looking ahead, Farrell expressed optimism for continued growth in 2025, driven by product innovation. The Company plans to launch several new products, Church & Dwight including ARM & HAMMER™ POWER SHEETS™ Laundry Detergent, a dermatologist-tested, fragrance-free variant; ARM & HAMMER™ Deep Clean™ Laundry Detergent; BATISTE™ Light, a lightweight dry shampoo; HERO™ Mighty Patch Body for acne treatment; and new offerings from VITAFUSION™, including Power Plus multivitamins.
For 2025, Church & Dwight expects reported sales growth of 2.5% to 3.5% and volume-driven organic sales growth of 3% to 4%. Gross margin is expected to expand by 25 basis points, and marketing as a percentage of sales is anticipated to exceed 11%. SG&A expenses are expected to be lower as a percentage of sales, with continued investments in e-commerce and international markets.
For the first quarter, the Company expects reported sales growth of approximately 1% and organic sales growth of 2%, with a higher quarterly tax rate. Adjusted EPS for Q1 is projected to be $0.90, representing a 6% decrease compared to the previous year’s adjusted Q1 EPS.
Church & Dwight Co., Inc. continues to demonstrate strong performance, supported by robust organic growth, effective marketing, and a commitment to innovation. The Company’s diverse product portfolio, including iconic brands like ARM & HAMMER™, HERO™, and VITAFUSION™, positions it for sustained success as it enters 2025, with a focus on expanding its market share and delivering value to shareholders.
