On Monday, Piper Sandler released an assessment of the personal care sector, noting mixed spending trends for the 4 weeks ended December 1. The analysis indicated that while there were slight sequential improvements for some companies, overall Q4 levels showed a decline.
Despite this, Piper Sandler maintained its Overweight (OW) ratings for Church & Dwight (NYSE:CHD), Colgate-Palmolive (NYSE:NYSE:CL), Kimberly-Clark (NYSE:NYSE:KMB), and Perrigo (NYSE:PRGO), and Neutral ratings for KVUE and Procter & Gamble (NYSE:PG).
Church & Dwight saw a 1.9% year-over-year increase in sales for its top six brands during the 4-week period and a 3.0% year-over-year increase for Q4 to date. This is in line with Piper Sandler's projections of a 1.6% organic growth for the Consumer Domestic segment in Q4. The firm remains comfortable with its forecast, bolstered by a 3.1% volume growth in the past four weeks.
Colgate-Palmolive, on the other hand, experienced a 4.7% year-over-year sales decline in the recent four weeks and a 2.8% decline for Q4 to date, which is slightly worse than the projected 1.3% drop. Despite the negative trend, the analyst points out that the quarter is not yet over, and other segments not included in the data could still offset the decline.
For Kimberly-Clark, the top seven brands' sales dropped by 2.7% year-over-year in the last four weeks, while Q4 to date sales increased by 2.1%. The volume decrease of 4.4% year-over-year during the same period was anticipated due to challenges highlighted in the Q3 earnings call. The firm's projections remain conservative.
KVUE's Skin Health & Beauty distribution points decreased by 9.1% year-over-year, with sales and units for the top nine brands declining by 6.0% year-over-year in the recent four weeks. This trend puts Q4 to date sales at a 4.0% year-over-year decrease. Despite these figures, improvements in margins could help protect earnings.
Procter & Gamble posted a 0.8% year-over-year sales increase for the four weeks ended December 1 and a 4.8% increase for Q4 to date, which is above the estimated 2.8% organic sales growth. Unit growth was down 1.5% year-over-year in the last four weeks but up 1.3% for Q4 to date. The firm remains cautious due to potential disruptions highlighted by management.
Lastly, Perrigo's Private Label sales in OTC categories declined by 2.9% year-over-year for Q4 to date, outperforming the branded category's 5.0% decline. However, infant formula sales saw a significant decrease of 33.8% year-over-year. The firm is also monitoring the rise of competitor Kendamil as a potential challenge to Perrigo's market share.
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In other recent news, Church & Dwight Co. Inc. has been making headlines with its financial performance. The company reported a 3.8% increase in sales for the third quarter, beating the expected growth of 2.5%. Additionally, the adjusted earnings per share (EPS) for the quarter stood at $0.79, exceeding the forecast of $0.67. Despite a $357 million asset write-down in the gummy vitamins segment, Church & Dwight saw growth in international sales and specialty products.
In light of these results, TD Cowen has increased the company's stock price target from $114.00 to $117.00, while maintaining a Buy rating. The firm's analysis highlighted Church & Dwight's market share gains and suggested the potential for better-than-anticipated performance. Meanwhile, Jefferies has maintained a Hold rating on Church & Dwight with a price target of $108.00, expressing a cautious stance regarding the U.S. consumer market.
In response to these recent developments, Church & Dwight has maintained its guidance for the year and plans to increase its marketing expenditures. The company's strategic initiatives aim to solidify its market presence and build momentum for 2025.
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