New Jersey-based consumer products manufacturer, Church & Dwight, known for its Arm & Hammer brand, saw its shares fall by 6.4% to $86.08 on Friday, following the announcement of a lower Q4 earnings guidance. This drop marks the largest percentage decrease in approximately 15 months, positioning the company as the second worst performer on the S&P 500 this year, despite an overall 6.6% rise in the index.
CEO Matthew Farrell attributes the expected dip in earnings to increased marketing costs, higher incentive pay, and elevated taxes. The company has set a target profit of 60 cents per share (or 63 cents when adjusted), which falls below the 72 cents estimate by FactSet analysts.
While Church & Dwight forecasts a Q4 sales growth of 5%, this is slightly below FactSet's prediction of $1.52 billion or a 5.6% increase. However, the company has revised its annual sales growth forecast upwards from 8% to 9%, while maintaining a projected organic sales growth of 5%.
Despite these challenges, Church & Dwight remains optimistic about its performance and continues to focus on driving growth through its strategic initiatives and strong product portfolio.
InvestingPro Insights
Drawing on real-time data from InvestingPro, Church & Dwight (CHD) presents a compelling investment scenario. The company's market capitalization stands at a robust $21.12 billion, with a P/E ratio of 46.87, indicating high investor expectations. Over the last twelve months as of Q2 2023, the company has seen a revenue growth of 6.32%, contributing to a total revenue of $5637.3 million.
InvestingPro Tips also reveal a strong financial position for CHD. The company has demonstrated high earnings quality, with free cash flow exceeding net income, and an impressive track record of raising its dividend for 19 consecutive years. Moreover, the company's liquid assets exceed its short-term obligations, indicating a healthy financial buffer.
These metrics and insights are just a taste of what InvestingPro offers. With over 14 additional tips available for CHD alone, InvestingPro provides comprehensive insights for informed investment decisions.
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