Earnings call transcript: Church & Dwight Q2 2025 beats expectations

Church & Dwight Company Inc. (CHD) announced its second-quarter 2025 earnings, reporting an adjusted earnings per share (EPS) of $0.94, surpassing the forecast of $0.86. The company’s revenue reached $1.51 billion, exceeding expectations of $1.48 billion. Despite these positive results, the stock saw a pre-market decline of 1.9%, trading at $91.99, possibly due to broader market factors or investor caution.

Key Takeaways

• Church & Dwight’s Q2 EPS of $0.94 exceeded forecasts by 9.3%.
• Revenue of $1.51 billion surpassed expectations, showing a 2.03% surprise.
• Stock price fell 1.9% pre-market despite strong earnings results.
• The company expects 0% to 2% organic sales growth for the full year.
• Strategic focus includes innovation and potential divestiture of vitamin business.

Company Performance

Church & Dwight’s performance in Q2 2025 demonstrated resilience in a challenging market, with organic sales growth of 0.1%, exceeding the anticipated range of -2% to flat. The company’s strategic moves, including acquisitions and product innovations, have bolstered its market position, particularly in categories like dry shampoo and acne care. The company also noted strong international performance, contributing to its overall growth.

Financial Highlights

• Revenue: $1.51 billion, up from the forecasted $1.48 billion
• Earnings per share: $0.94, up 1% year-over-year
• Adjusted gross margin: 45%, down 40 basis points from the previous year

Earnings vs. Forecast

Church & Dwight reported an EPS of $0.94, beating the forecast of $0.86 by 9.3%. This marks a positive surprise compared to previous quarters, indicating effective cost management and successful product launches. Revenue of $1.51 billion surpassed expectations by 2.03%, reflecting strong sales performance.

Market Reaction

Despite the earnings beat, Church & Dwight’s stock fell 1.9% in pre-market trading, reaching $91.99. This movement contrasts with the company’s 52-week high of $116.46, suggesting potential investor concerns or broader market influences. The decline may also reflect caution amid volatile macroeconomic conditions.

Outlook & Guidance

The company maintains its full-year outlook of 0% to 2% organic sales growth and a similar range for adjusted EPS growth. Church & Dwight plans to continue investing in innovation and marketing, with a focus on expanding its product portfolio and exploring strategic alternatives for its vitamin business.

Executive Commentary

CEO Rick Dirker highlighted the company’s adaptability, stating, "Our brands continue to perform well in this dynamic environment." He emphasized a long-term perspective, "We’re running this business like we’re gonna own it forever." These comments underscore the company’s commitment to sustained growth and market leadership.

Risks and Challenges

• Supply chain disruptions could impact product availability.
• Market saturation in key categories may limit growth potential.
• Macroeconomic volatility could affect consumer spending.
• Potential tariff changes may influence cost structures.
• Strategic divestitures, like the vitamin business, could pose integration challenges.

Q&A

Analysts inquired about the potential divestiture of the vitamin business, with management noting ongoing evaluations and strategic reviews. Questions also addressed the stable promotional environment and international growth strategies, highlighting the company’s focus on mitigating tariff impacts and enhancing global reach.

Full transcript - Church & Dwight (CHD) Q2 2025:

Conference Call Operator: Good morning, ladies and gentlemen, and welcome to Church and Dwight’s Second Quarter twenty twenty five Earnings Conference Call. Before we begin, I’ve been asked to remind you that on this call, the company’s management may make forward looking statements regarding, among other things, the company’s financial objectives and forecasts. These statements are subject to risks and uncertainties and other factors that are described in detail in the company’s SEC filings. I would now like to introduce your host for today’s call, Mr. Rick Dirker, President and Chief Executive Officer of Church and Dwight.

Please go ahead, sir.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: All right. Thank you. Good morning, everyone. Thanks for joining the call. I’ll begin with a review of q two results, speak to the touch on closing, strategic actions, and some thoughts on the macro environment.

Then I’ll turn the call over to Lee McChesney, our CFO. When Lee is done, we’ll open the call up for questions. First, I’ll begin with Q2 results. Organic sales grew 0.1% exceeding our outlook of minus 2% to flat. Adjusted gross margin was down 40 basis points, also exceeding our outlook range.

Adjusted EPS was $0.94 which was $09 higher than our $0.85 outlook. Lee will take you through the rest of the numbers shortly, but first some highlights from the quarter. When we gave our outlook back in May, we were seeing category consumption data that was showing a deceleration from strong growth early in the year to turning negative in early April. The good news is that since then, things have begun to improve with categories finishing positive in April and Q2 category consumption for our largest categories finishing around 2.5%. The macro environment has been volatile and uncertain with tariff policies changing frequently.

The consumer uncertainty showed up in early Q2 when consumer confidence hit a twelve year low. Since then, confidence levels have started to recover as tariff policy appeared to stabilize. Not surprisingly, given that backdrop, our second quarter sales finished slightly ahead of our outlook, which gives us confidence in achieving our full year organic outlook of 0% to 2%. Our brands continue to perform well in this dynamic environment. We continue to drive both dollar and volume share gains across most of our brands.

Our balanced portfolio of value and premium products and our relentless focus on innovation continues to position us well for the future. International continues to take share across the globe. Further, we continue to grow the online class of trade with online sales as a percentage of global sales now reaching 23%. In July, we closed our most recent acquisition, Touchland. Touchland is the fastest growing brand in the hand sanitizer category in The US and is the number two hand sanitizer in the category.

Touchlin experienced strong growth in q two outpacing the category and gaining share. We’re excited to add Touchlin as our eighth power brand and even more so excited to officially welcome the Touchlin team to Church and Dwight. Now let’s discuss the strategic actions we outlined last quarter. To drive shareholder value, management team assessed each of our brands on a regular basis. As a result of these reviews, we often accelerate and increase investments in our strongest brands and move with speed to address opportunities for value creation.

That review is what led to the strategic decision to exit FLAWLESS, Spin Brush and WATERPIK showerhead business. Today, we’ll provide an update on our vitamin business. We remain focused on our revitalization efforts with multiple innovation and branding programs underway in 2025. While it’s still too early to fully evaluate results, we can share at this time that we’re seeing mixed results. There are some green shoots.

We see our multivitamin business improving week over week and our innovation is seeing strong consumer reviews. And of course, we remain focused on executing our improvement actions. In addition, we are undertaking a strategic review of the business, including streamlining our supply chain to strengthen our core business, potential JV and partnership opportunities and divestiture options. The gummy vitamin business continues to be a drag on the company’s organic growth. The good news is the gummy vitamin category grew almost 4%, which is the third consecutive quarter of growth.

The bad news is our consumption was down around 25% as our TDPs declined. Now I’m going to turn my comments to each of the three businesses and the improved results from our teams in the second quarter. First up is The U. S. Consumer business.

Organic sales declined 1% with volume growth being offset by negative price mix. Volume growth was muted by continued retail destocking in Q2. We continue to expect slight impacts moving forward. Consumption was positive in the quarter for The U. S.

Business with momentum improving and we grew share in five of our seven power brands. Let me provide a bit of color for a few of our important categories. First, with laundry detergent. ARM and HAMMER liquid laundry detergent consumption grew 3.2% in contrast to 1.3% category growth. ARM and HAMMER share in the quarter reached 15%.

Moving to Litter. ARM and HAMMER Litter consumption grew 3.4% while the category was up 4.1 as we saw heightened competitive promotions. Next is Batiste. Batiste continues to be the global leader in dry shampoo. And while consumption was down almost 7% in the quarter, we’re confident in Batiste returning to consumption growth in the future.

There are a couple of factors contributing to consumption decline such as competitive price increases, economic pressure driving trade down, and we had some supply issues that are now resolved. This year, we’re launching Batiste Lite. As a leading brand, our innovations continue to attract new users to the category and increase household penetration. Over mouthwash, TheraBreath continues to perform extremely well. While the mouthwash category was down in q two, TheraBreath consumption grew 22.5% and continues to be the number two mouthwash with a 21% share.

Remember, we believe there’s a lot of runway here. Our household penetration for TheraBreath currently sits around 11% versus the category of 65%. HERO once again outpaced the category with consumption growth of 11.4% compared to the acne category growth of 1.5% and remains the number one brand in acne care with a 22 share. Equally important is HERO continues to gain share in acne patches. And similar to the Therabreath story, we believe household penetration growth is key for this brand.

It sits at 9% versus the category of 28%. Hero continues to launch innovative solutions and patches and is entering the growing body care segment in 2025 with the Mighty Patch Body. Looking ahead, we’re excited about our pipeline of new products, which remain a key driver of our success. In 2025, we expect continued innovation to power our growth and build on momentum, especially in several core categories where we’re leading the way. Now turning to International SPD.

Our International business delivered sales growth of 5.3% in the quarter. Organic increased 4.8% due to a combination of higher volume, price and mix. Growth was led by HERO, TheraBreath and ThinFresh and was broad based with all of our subs delivering growth. We were able to grow share in all of our power brands in the quarter, which is a great achievement. Finally, SPD organic sales increased 0.1% due to a combination of higher price and product mix offset by volume.

We continue to be excited about the growth opportunities in this business. Looking ahead, our full year organic growth outlook continues to be 0% to 2%, while category consumption has improved. There remains uncertainty around The U. S. Consumer and global economy.

We expect our Q2 brand share momentum to continue, supported by our new product launches, our distribution gains and sustained full year investment in marketing. Adjusted EPS, we continue to expect 0% to 2% growth, which includes the TouchLawn acquisition, the cost of the product recall and the wind down of the three exited businesses. I’ll close by saying that category consumption is looking a bit better than three months ago, and our brands are strong. They’re doing well. We’re gaining both dollar and volume share across much of the portfolio.

We have a healthy mix of value and premium offerings. We’re well equipped to navigate the current environment. The strategic actions we’re taking will position the company well for the future, and we continue to be on the hunt for the right acquisitions. I’d like to thank all the Church and Dwight employees for executing well in a volatile environment. And now I’ll hand it over to Lee for more detail on the quarter.

Lee McChesney, Chief Financial Officer, Church and Dwight: Thank you, Rick, and good day to everyone. Well, as Rick just mentioned, we’ve just concluded a very productive quarter from our teams across the globe. As we shared during our first quarter call, we remain focused on what we control in the second quarter and this positions us well as we look forward to the 2025. Let’s dive into the second quarter and our outlook. We’ll start with EPS.

Second quarter adjusted EPS was zero nine four dollars up 1% from the prior year. The $0.94 was better than our $0.85 outlook driven by a stronger sales performance and some good resiliency with gross margin. Reported revenue was down 0.3% and organic sales were up 0.1%. The organic sales were on the high side of our May 1 outlook and it reflects the improvements we saw in category growth and the strength of our brands. Our second quarter adjusted gross margin was 45%, a 40 basis point decrease from a year ago.

Productivity and higher margin acquisition business mix drove 170 basis points of margin growth and offset a negative 140 basis points from inflation and tariffs, 40 basis points from the combination of volume price and mix, and 30 basis points from the ZicamORA gel swab recall. I’d also note that a portion of our original tariff estimate, about 20 to 30 basis points we expected in the second quarter, shifted to the third quarter as the tariff rates and the shipment timing evolved. Moving to marketing. Our marketing expense as a percentage of sales was 10.4% or 30 basis points higher than 2Q of last year. And for the year, we continue to target 11% of net sales in line with our evergreen model.

We are encouraged with our share results in the first half of the year. For SG and A, Q2 adjusted SG and A decreased 80 basis points year over year and other expense decreased by $5,200,000 due to higher interest income. And we now expect other expense for the full year to be approximately $65,000,000 on an adjusted basis, reflecting a lower investment income following the TouchLand acquisition. In 2Q, our effective tax rate was 23.8% compared to 24% in of 2024, a 20 basis point year over year decrease. The expected adjusted effective tax rate for the full year continues to be 23%.

And now to cash. For the first six months of 2025, cash from operating activities was 4 and $16,500,000 a decrease of $83,000,000 versus last year due to working capital timing and lower cash earnings. The capital expenditures for the first six months were $39,000,000 a $37,600,000 decrease from the prior year, and we continue to expect CapEx of approximately $130,000,000 as we return to historical levels of two percent of sales in 2025. And in the second quarter, the company executed a $300,000,000 share repurchase via open market transactions through an accelerated share repurchase program. Okay.

Let’s now turn spend a few minutes on our outlook. For the full year, we expect reported sales growth of approximately 0% to 2%, which includes the addition of the Touchstone acquisition and the impact of lower sales from the businesses we are exiting. And to quantify that for you, that’s about 70,000,000 to $80,000,000 for Touchstone coming in and 70 to $80,000,000 going out for the businesses being exited. We continue to expect organic revenue growth of approximately 0% to 2%. The sales outlook reflects our brand and category growth momentum and reflects a balanced macro view around the uncertainty in The U.

S. And global economies. We continue to expect full year gross margin to contract 60 basis points versus 2024 from elevated input costs and tariffs, the recall expense, unfavorable price and mix to outpace incremental productivity and higher margin acquisition impacts. And looking forward, Touchstone is margin rate positive, but for this year the business exits mitigate that benefit. And we’re maintaining our adjusted EPS outlook for 2025.

We expect full year adjusted EPS to be 0% to 2%, which includes the key elements we highlighted after the first quarter, but also includes the touchstone, which is neutral EPS for 2025, the wind down of the three business exits and the cost of the product recall. And for 3Q, we expect reported organic sales growth of approximately 1% to 2%, adjusted gross margin contraction of approximately 100 basis points, primarily from inflation and tariff costs and the lower margins of the exited businesses. Marketing will be higher sequentially compared to last year. And as a result, we expect adjusted EPS of $0.72 per share, which is a decrease of 9% versus last year adjusted EPS. Cash flow from operations for the full year remains $1,050,000,000 In July, we also expanded our revolver facility from $1,500,000,000 to $2,000,000,000 And the combination of this cash flow and the expanded credit facilities provides us excellent flexibility.

Our m and a team accordingly continues to pursue accretive acquisitions that meet our strict criteria with an emphasis on fast moving consumer products similar to our recent acquisitions. To conclude, back on May 1, we communicated our proactive set of actions to navigate 2025. And as Rick and I just highlighted, we’ve made great progress and we’re focused on sustained execution for the remainder of the year. So with that, we’re happy to take your questions. So Eric, we’ll turn it to you.

Conference Call Operator: Your first question comes from the line of Chris Carey with Wells Fargo. Please go ahead.

Lee McChesney, Chief Financial Officer, Church and Dwight: Hey. Good morning, guys.

Steve Powers, Analyst, Deutsche Bank: Good morning.

Chris Carey, Analyst, Wells Fargo: Good morning. Can I start on vitamins and and the the strategic review you’re undergoing? Can you just give a bit of context on what might push you one way versus the other that could be feasibility of of outcomes? Obviously, you need a partner on the other side of the equation, but that could also be the potential dilution of a of an outright divestiture and and perhaps how you think about touch land given the fast growth and margin accretion as a potential offset to to such a, you know, an outright dilutive divestiture. So can you

Lee McChesney, Chief Financial Officer, Church and Dwight: just give us a little

Chris Carey, Analyst, Wells Fargo: bit more insight on, you know, where you how those different decisions could come out and and kind of the netting out impact if we were to look out twelve to eighteen months? And have a follow-up.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yeah. Sure, Chris. Look. We we’re pretty clear in the in the release that we’ve put three different options out there and and there’s some, you know, option no particular order would be a divestiture. That’s probably the cleanest option.

The second one would be joint venture partnership with a a partner. We’ve seen that happen in the industry a few times as well. And the third one is, to radically shrink that business and make it, even more profitable. And that would have, you know, supply chain reorganization that would have, kind of the way we manage that business implications, to to enable speed and even faster decision making. Because I think everyone sees it, but it’s not just Church and Dwight.

It’s the vitamin businesses that were put into all these CPG companies. These businesses need to be run and managed a little bit differently. And I think, you know, we have the ability to do that. It just has to change the organization around it and the structure we would have. So, we need a few months to go through that.

I think, the the the good news is some of the activity sets that we’re have started on are working. I was kinda clear about that in the green shoot comment. You know, for example, we’ve been putting a lot of focus on multi bites, on innovation. And, you know, we’ve been stair stepping up in improvement. We were probably on average down 24, 25% for April and and May.

And as we look at June, we’re we’re down, you know, in the teens. And then the last couple weeks, we’re down single digits. And for the first time ever, our units were actually positive. So there are things that are working. It’s just a speed and, you know, urgency type of of mindset.

Chris Carey, Analyst, Wells Fargo: Okay. Fair enough. And then just from a category perspective, we’ve seen good consumption trends in your laundry business. Can you just expand on what’s going right and then some of the strategies that you’re implementing to put up some nice market share performance? Thanks so much.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: No. Thanks. There’s there’s great market share performance. You know, five of seven of our our brands power brands gained share in in the quarter. We continue to do well.

July also looks good. I would say a lot of confidence in our in our growth in the back half. I’m incrementally even more positive today than I talked ninety days ago. Category growth’s improving. Our share gains are working.

A lot of confidence in the two and a half percent back half number. And even, you know, July, I would say, came in above that number. So a lot of lot of good work and efforts across many of our brands with with laundry. It’s you know, you wanna have the right sizing strategy. Right?

A lot of consumers are are trading up into larger sizes. Make sure the price points on those sizes are correct so you can promote them correctly at times. And and then, you know, laundry and litter are very similar. They’re, it’s a pricing, sizing, value equation that we’re really good at and we can move quickly on. So that’s we’ve been successful across many of our brands for that reason.

Chris Carey, Analyst, Wells Fargo: Okay. Thanks, Rick.

Conference Call Operator: Your next question comes from the line of Rupesh Parikh with Oppenheimer. Please go ahead.

Rupesh Parikh, Analyst, Oppenheimer: Good morning, and thanks for taking my question. I guess just going back to retailer destocking comment, is there a way to quantify the magnitude of that headwind and then whether it was broad based across retailers and categories? And then I have one follow-up question.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yeah. Rupesh, it’s Rick. You know, we we we talked in q one that it was around a 300 basis point drag to to our net sales versus the the consumption numbers. I think we would ballpark it to be around 100 basis points in Q2. And in my comments, said maybe it’s slightly there in Q3 and Q4 as we go forward.

But inventory levels are pretty good. The only impact, and you’ve heard this from other competitors, is as sales grow faster at club or online or at mass, it does have a little bit of a mix component to it that, there’s just not as much inventory needed in the system. And as you would expect, when category growth is a little bit lower than historical averages, you don’t need as much inventory either. And so I think it’s just a it’s a it’s kind of a a slight impact, but I I wouldn’t call it a material impact going forward.

Rupesh Parikh, Analyst, Oppenheimer: Great. And then my follow-up question, just on Touchland, now that the acquisition is closed, would be just curious on what you see as, I guess, the bigger priorities for the balance of year for that business.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yes, yes. We’re super excited about Touchland. I think, again, like, you can’t track that business as well because it’s sold largely at Sephora and Ulta and Amazon. But when we look at our kind of numerator data or even the Amazon data, you know, it’s driving category growth. Like, half of all category growth’s coming from touchland.

New users, household penetration is still a great story. A lot of runway there. You know, 6% household penetration for touchland versus the category at 37%. They they have, incremental kind of near term innovation on, different fragrances and whatnot for hand sanitizer. The body mist is still off to a good start.

Going international is off to a good start. More more to come later on on in other categories of innovation, but it is it is just a a pleasant surprise is what I would say. And the and the the team’s energized. The connections that we’re making within Church and Dwight and Touchland are helping enable them move with speed as they go after new opportunities, whether it’s a different class of trade or a different distributor or or whatnot. So really happy with that growth rate.

Rupesh Parikh, Analyst, Oppenheimer: Great. Thank you. I’ll pass it along.

Conference Call Operator: The next question comes from the line of Peter Grom with UBS. Please go ahead.

Peter Grom, Analyst, UBS: Thanks, operator, and good morning, guys. I I kinda wanted to to follow-up on the organic sales outlook, but just in the context of what you’re seeing from a category standpoint, you you touched on it to to Chris’ question, The consumption has improved, and we can see that in the data. But I I guess the commentary seems to be at odds with a lot of what your h p HPC peers are kinda discussing here in the last twelve hours or so. So I I know everyone is different subcategories and regions, but can you just talk about what you’re seeing and and maybe why it could be different and and how you see that evolving through the balance of the year?

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yeah. And you gotta remember, I think we were kinda early like we normally are about calling what was happening last quarter. And I think some of our peers called that kinda this quarter. You know, back when I talked in May, I was I was a little bit more cautious and because we were seeing negative category growth for those first few weeks of April. And and so we were calling category growth at, like, one or one and a half percent was our kind of our outlook embedded when we were discussing it.

And then as we time goes by, the the category growth for our largest categories not all of our categories, but the largest categories was closer to two and a half percent, for the third quarter. And and we’ve talked about this before as well, just the the odds that was happening, you know, the the University of Michigan consumer confidence, all the the turmoil in the world on tariffs, and that bread uncertainty. Well, some of that some of that has been mitigated, there’s been a little bit more confidence, I think. And category growth has we think is gonna be closer to one and a half to 2% as we move forward for for the year. It matters what categories you’re in.

I think that’s the the the most concrete answer I can give you. You know, some some of our competitors are in different categories than we are. They have other risks to private label. They have other pricing risks. But for us, we see that more often than not, our categories are growing 3% over a long period of time.

They’re growing slower than that this year, but better than what we expected maybe ninety days ago. And meanwhile, our our our tactics and strategies on innovation and and pricing and promotion and, all those things are helping, and our marketing spend is helping to gain share.

Lee McChesney, Chief Financial Officer, Church and Dwight: Hey, Peter. All all I would is, to your point to Rick’s point, we tried to lay out for the rest of the year back in a back in May 1 and here here today, there were steps to our improvement. And, you know, the second quarter, you know, really hit those marks actually a bit higher. And then, obviously, for the back half, we got two and a half percent organic implied, and, you know, we have steps to that in March and April. We feel very comfortable for the back half just based on everything we see today.

Peter Grom, Analyst, UBS: Makes sense. And I guess just a point of clarification, Rick. I mean, on that 2.5%, I think you mentioned before that it’s running ahead of that in July. So I just wanted to clarify that that’s a total company organic comment. And I guess if that’s the case, is there any sort of reason why you would anticipate organic growth kind of decelerating to the 1% to 2% guidance that you frame for the quarter?

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Well, there’s always a comp, you know. And I would I would just say that our month of July was the is the easiest comp that we had if you look at the the quarter. But it just gives us confidence because you have one month behind us and and it and it and it had a a great had a great month. So, you know, maybe it’s conservative, but it’s what we think the environment is right now, it’s so volatile that there’s no reason to to take take the full year up after another three months. So, we’ll see how the next, many days go, and I’m just trying to convey that we’re off to a strong start.

Peter Grom, Analyst, UBS: Makes a lot of sense. Thank you so much. I’ll pass it on.

Conference Call Operator: The next question comes from the line of Anna Lizzo with Bank of America. Please go ahead.

Anna Lizzo, Analyst, Bank of America: Hi. Good morning. Thank you so much for the question. I was wondering if I could follow-up on Peter’s question here. Just we’re hearing from peers in this space who expect an acceleration in the second half.

And while you don’t have meaningfully different comps in the back half, was wondering how you’re looking at the consumer environment and your expectation for improvement or maybe lack thereof here. And we’re also seeing a variety of strategic actions from peers as well, including increased promotional spend and marketing support. Was wondering if you can further comment on your initiatives there. Thank you.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Sure. So, you know, on the consumer, my answer is pretty much what I what I gave Peter. You know, just want a lot of confidence in in our growth. And it’s not just a category story for us. It’s also a share story.

Right? And we’re we’re driving, growth in mouthwash even when the category is, growing slower than that. We’re we’re taking share. Same thing with acne and acne patches. Same thing with touchland.

Many of our our brands, not just one or two of them, are are gaining share over time. So that’s why, again, we have we if you look back at our long track record, ten years plus, we tend to gain share in about two thirds of the the time periods we’re looking at. So that’s on the consumer. In terms of I think your other question was just what initiatives we have and and strategic initiatives. Look, we are crystal clear that we’re gonna be spending, the marketing that we kind of, always spend with our evergreen model.

We think this is the right time. That’s the right amount, 11% or so, and we’re protecting that. And that’s part of the reason that even when we came out in the first quarter and lowered our earnings for the year pretty early, we said that we are gonna protect that marketing spend. And then q three is actually the highest, quarter of the year between 12 and a half and 13%. So that’s a we’re investing behind the business.

We’re investing behind the brands. We’re investing behind innovation. There’s some innovations launching in the back half that we’re really proud of as well that that will be supported. We’ll talk more about that next quarter. So that’s kinda where we’re at.

We’re investing behind marketing. We’re investing behind, you know, price pack architecture where we need to. And and we feel like we’re in a good spot to continue to gain share over time.

Anna Lizzo, Analyst, Bank of America: Okay. Great. Thanks so much.

Conference Call Operator: Your next question comes from the line of Dara Mohsenian with Morgan Stanley. Please go ahead.

Dara Mohsenian, Analyst, Morgan Stanley: Hey, thanks. Maybe extending the last couple of questions a bit as we look beyond ’25. Just any thoughts, Rick, on your ability to return to the evergreen OSG targets after this year? Are you looking at this year as more of an aberration, understanding a lot of weakness earlier in the year, things getting better sequentially, but not being all the way back to Evergreen yet? So just I know there’s a lot of volatility, there’s a lot going on, but how do you think about organic sales growth as you look beyond this year, particularly with an easy comp in theory with the inventory cuts this year?

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yes. Thanks for the question, Dara. Look, it’s called an evergreen model for a reason. Our our goal is to to hit our evergreen model each and every year, year after year, and we’ve got a model of consistency in doing that. I think this year is an aberration.

When you have categories, like we said before, that that all of a sudden for the last ten years have grown around 3%, it started out growing in q one, one and a half percent, and in the first couple weeks of April negative, that gave us pause. I think with the volatility in the world today and and the pressure on the consumer and the agenda around the tariff situation, that just moved categories in a bigger way. So I do think it’s a bit of an aberration. I I have a lot of confidence in the evergreen model for not just one year or two years, but that is what we are supposed to do each and every year. And we have some brands that are growing faster than the evergreen model, and we have made some portfolio decisions on other brands that we’re growing at a lower rate than the evergreen model.

So I think that does nothing but strengthen the portfolio and the company, over the long term.

Dara Mohsenian, Analyst, Morgan Stanley: Great. That’s helpful. And then just on Batiste, it’s been a great growth brand in recent years, slowdown in Q2, you sound more optimistic in the back half. You touched on it a bit, but can you just give us a bit more detail on what what’s happened here in the last few months and sort of the plans for the back half and the optimism you have there? Thanks.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yep. Sure. Well, it’s it’s one thing. It’s always multiple things. That’s what how life and how business is.

So part partly, we had some supply chain challenges that were back, and recovered on. So that’s a piece of it. We are introducing, some innovation. Right? And we have to make sure the advertising and the and the trial generation activities for that, line up appropriately, and so that’s that’s still early days.

We also had a competitor take a massive price increase and introduce different sizes as well. And so when you when you have that, it kinda changes and disrupts the category from a pricing size and perspective. So we’re taking a look at that. But meanwhile, you know, we have to make sure we’re really clear. Piece is the leader in the category.

It’s brought innovation not for one year, but for for decades. And, consumers delight in in the piece. We have led that category with innovation. We’ve led it with with, you know, kind of a value as we traded people up to larger sizes. But we’re in a in a difficult economic environment right now.

So we have to make sure we have sizes that appeal to all all price points. And so that’s what the team’s working on, and some of those things will be dealt with immediately and some them are kind of medium term. But I have a lot of confidence we’re gonna get back, to share gains in Batiste, in the in the in the medium term future.

Filippo Folorni, Analyst, Citi: Thank you.

Conference Call Operator: Your next question comes from the line of Bonnie Herzog with Goldman Sachs. Please go ahead.

Rick Dirker, President and Chief Executive Officer, Church and Dwight0: All right. Thank you. Good morning. Actually, I wanted to circle back with a question on the promotional environment. We’ve seen increased couponing activity across broader HPC and then scanner suggesting that sales on promotions have been rising.

So just curious to hear what you’ve been seeing in your categories and if you expect the promotional landscape to get even more aggressive in the back half of the year. And I guess in that vein, Rick, how should we think about net price realization going forward, especially within your consumer domestic segment?

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yes. Hey, Bonnie, good question. I think, look, whenever we talk about promotion, where we focus is really our household business, laundry and litter. That’s the predominant amount of of promotion. I would say it’s kind of a a divergent story.

Litter, actually, that category has spiked up, above historical averages. If you look back at a long time, many, many quarters, it could go anywhere between fifteen and eighteen over years. It spiked up to 21 in in the quarter. We were actually down a little bit. Nestle was up dramatically as they are promoting their their lightweight litter in a big way.

So that was litter. Laundry actually is very consistent with the previous few quarters. Laundry detergent is typically in the low thirties, and, for the last twelve months, it continues to be in the low thirties. So, we were we were up a little bit, but we’re still in the low thirties. I think, in general, laundry has been pretty rational.

Litter has been elevated. And then and then vitamins, to some degree, is always a promotional category, but that’s, again, a little bit of smaller business than the other two for us.

Rick Dirker, President and Chief Executive Officer, Church and Dwight0: Okay. Helpful. And then maybe just a quick question about your gross margin guidance for the year. With end market trends sequentially getting better and your guidance suggesting top line is going to accelerate in the back half, Could you just maybe touch on the puts and takes, including tariffs on the expected declines on gross margins, especially in Q3? Thanks.

Lee McChesney, Chief Financial Officer, Church and Dwight: Yes. Good morning, Bonnie. Yes. So as we talked about, we say, number one here, gross margin is still in the 60 basis point zone. But obviously, there’s some moving pieces that have happened.

As we noted, tariffs have not materially changed for the year, though the twelve month number has gone up a bit. But there has been a bit of a timing piece. So there’s a bit more in the back half than we initially estimated. That certainly shows up in 3Q in particular. Still driving productivity And overall, it still keeps us in that same zone.

As Rick just talked about, we did have a little bit of a negative price in the second quarter. Now the majority of that was tied to our recall. There certainly is a little bit of discounting going on like a more normal environment. You have that in there. But that’s the balance.

Again, biggest piece is just the tariffs inflation. Inflation is still staying sticky. We keep driving productivity. And I think probably a good time to reiterate, we’ve done a really nice job to manage the tariff topic. Really that number is just a timing change for us.

The absolute value for the year hasn’t changed. We’ve been very proactive at managing it. The twelve month number has gone up. But again, if we hadn’t done all the actions we had taken, we’d have a much bigger headwind and we’re just focused on driving up through productivity and probably some strategic pricing as we look forward.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yeah. I’m I’m actually really pleased with, we we kept 60 basis points of the decline as our as our outlook, and we absorbed, a lower gross margin number from these discontinued businesses as they ramp down. Right? As you take inventory reserves for them, as you as you do the proper run out of those businesses. And we had a recall that happened for us.

I came in order to help business that impacted us. And, despite all that, we were able to maintain margin.

Anna Lizzo, Analyst, Bank of America: Alright. Thank you.

Conference Call Operator: Your next question comes from the line of Steve Powers with Deutsche Bank. Please go ahead.

Steve Powers, Analyst, Deutsche Bank: Great. Thank you. First, just real quick, circling back on, on VMS and and, thinking about different strategic options. Just if if you were to separate that business, can you talk a little bit about, just how compartmentalized that that business is and how easily, you know, separatable, you know, it is relative to any kind of stranded overhead considerations that you’d have to work through and then we should be thinking about?

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Sure. So that business, you know, we is has separate manufacturing facilities in Vancouver, Washington. It’s embedded in our also in our York, Pennsylvania manufacturing facility, but it’s within its own four walls. It’s like a plant within a plant within that facility. And then as you would think, you know, r and d and and supply chain and marketing, all those functional functional supports are tend to be a little bit separate because it’s a it’s its own largely SBU.

There are support structures within the corporation, and so there are some allocated costs. And if we did go down the route of selling, we’d have to go address this strain of costs. And, that’s normal with any business. We just did that with the the Spin Brush, FLAWLESS, and and, WaterFix showerhead, you know, rundowns. I think the the big thing for us is, you know, at the same time, we’re also adding growth.

Right? We’re also adding, Touchlin, and so that helps offset some of those leverage fixed cost as well.

Steve Powers, Analyst, Deutsche Bank: Yeah. Okay. Perfect. Thank you.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: And then, Rick, you know,

Steve Powers, Analyst, Deutsche Bank: setting aside the work that’s being done in HPC, you know, on on on a portfolio rethinking, you know, across a lot of companies. We’re also seeing, you know, companies, you know, kind of double down on productivity, announce new new restructuring. And on the back end of that, you know, theoretically, size will be stepping up investments in technology and innovation, go to market capabilities, etcetera. So as you think about your business, you know, again, notwithstanding the the portfolio work you’ve done, just how do you think about, your spending levels and your capabilities? How do you benchmark them against peers both today and and where you think kind of the puck may be going?

And is there any, you know, you know, contemplation of having to, do something similar from a restructuring and and, accelerated reinvestment program? Thank you.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yeah. Steve, you’ve been following this company for so long as well. We’ve never really done a restructuring program. We’re more of a pay as you go type mentality. I mean, I think the only time we’ve ever called out anything was when we did a reimplementation of SAP, and that was kind of a one off.

But what we what we tend to do is in any one year, we could extremely we could we could go past our outlook on earnings growth, for example. But we tend not to do that. We tend to to make investments for the long term, and though and we’ve been doing that for years. And so we make investments in some of the analytics. We put a center of excellence in place.

You know, we would have we put a pricing group in place. We we we’re looking at we’ve added infrastructure to our international team in a in a big way. We have centers centers of excellence over in Europe for the for the, really, the export business. We’re looking at, you know, more local innovation, more local manufacturing. But all those things we tend to embed in our evergreen model and that we kind of pay as you go.

Lee McChesney, Chief Financial Officer, Church and Dwight: Very clear. Thank you very much.

Conference Call Operator: Your next question comes from the line of Andrea Teixeira with JPMorgan. Please go ahead.

Rick Dirker, President and Chief Executive Officer, Church and Dwight1: Thank you. I wanna go back, Rick, to your comment about how to how to think about these categories as you’re divesting. And also, in general, as you step back in terms of acquisitions, like keeping innovation for be it Baptiste or be it Now Hero, you have the Body Patch. How are you going to be able to continue to innovate and how you’re seeing percentage of sales coming from that innovation accelerating the second half? I know you might be comping some of the laundry innovation that you had as you enter twenty twenty six.

So how we should be thinking of that? And then conversely, I think you always have said about 20% of your revenues come from value. Are you gaining share in that segment of your portfolio or you’re seeing that stable? Thank you.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yeah. I think I got two of the three, but I’ll I’ll you can remind me what the third one was. So on innovation, you’re right. Like, innovation for us has has been kind of a bedrock. When when Carlos came in, our Lanera, who’s our head of r and d, he really changed the way we we innovate.

And we went through this at Analyst Day a little bit, but we have so many different vectors now of innovation. And so for the last few years, about half of our organic growth is coming from innovation, which is just, I think, industry leading and it’s and it’s fantastic. So if if, if innovation last year was, closer to two, it’s probably closer to, our outlook was probably closer to one and a half as we started the year. It’s probably around 1.2, 1.3 just as still phenomenal. But, in type in in times like this, when the consumer is pressed, sometimes they don’t reach for the innovative new product initially.

So, we’re still really happy with a lot of innovation. We’re putting our, you know, programs in place for sampling and for trial. But across the board, like, if you think take a step back, you know, deep clean innovation on laundry has been driving category growth and and category expansion and and share gains for us. Lightweight Litter has been growing category growth, our brand to grow and share gains for us. BATISTE, LIGHT, HERO, Therabreath, incremental sizes and and and flavors.

So innovation is alive and well and really a growth driver. On value share, I think you’re right. I know part of our portfolio is premium, part of it is value. More recently, as Hero and TheraBreath have outsized growth, the premium kind of mix of our business has grown faster. But the value portfolio continues to do really well, even if you look at Orange Box and Litter.

I mean, Box and Litter is is growing around 4%. There’s not this massive trade down or trade up happening, but Orange Box and Litter is doing well. I’d say Arm and Hammer, the brand in laundry is doing fantastically well. We have a good, better, best strategy there. It’s it’s probably the the better and the best tiers are growing faster than the good tiers in in Arm and Hammer laundry.

But those good I mean, better and best tiers are still a great value to the higher end premium laundry detergents. So that’s two of your questions. What was the third? First question.

Steve Powers, Analyst, Deutsche Bank: Kind of like categories. Right? Yeah.

Rick Dirker, President and Chief Executive Officer, Church and Dwight1: No. The the category yeah. Thank you, Lee. The categories, as you as you think about the exits exits that you’re making, right? And I think now you correct me if I’m wrong, it seems like you’re saying, well, perhaps we are going to do JVs and think about being creative on how we’re going to look at these divestitures.

So just to think perhaps if it’s gonna be just an exit or, or perhaps you can still be hopeful to to sell them.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Oh, well, yeah. On the vitamin business, right, it’s the the cleanest scenario is there’s a a sale. If you do a JV, it’s because either your partner doesn’t have all the capabilities that they would need to run it. And so there’s there’s a transition period over time most likely, and we we’ve seen that in other other categories, other industries. And then the third one is how do you right size it and grow more profitable and kinda take it out of its of of the CPG framework of operating in a little bit more of the vitamin paradigm and operating the business.

So those are the three scenarios. And like I said, we need a few months to to work through the the optimal path, and we’ll report back by the end of the year.

Rick Dirker, President and Chief Executive Officer, Church and Dwight1: And if I can squeeze one one on the margin, are you implying and and sorry if I missed that, that you’re gonna be taking pricing because a lot of your competitors are saying we’re taking pricing even in The US. Can you comment on any pricing that is not list pricing that is not coming from innovation?

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yeah. I think we we kinda mentioned it in the in the release or in in the transcript. But, really, look. We’re gonna do our best to offset the tariffs as needed. And, where we can’t do that and where we believe it’s needed, we’ll take some targeted pricing.

So that’s that’s the plan. And, it’s not gonna be across the portfolio, but it will be targeted and specific where where, we get hit the hardest with tariffs that we can and we can’t after we’ve done all we can do to offset, that’s what that’s what the next path forward would be.

Anna Lizzo, Analyst, Bank of America: Okay. Thank you.

Conference Call Operator: Your next question comes from the line of Lauren Lieberman with Barclays. Please go ahead.

Rick Dirker, President and Chief Executive Officer, Church and Dwight2: Great. Thanks. I know you touched on promotion a little bit earlier, but I wanted to just kind of revisit that a bit. I know on laundry, you know, you said the hovers the around this kind of 30% rate, generally speaking, over time. We’ve seen some kind of more elevated activity from Church and Wife, from Arm and Hammer in certain retailers more recently, and I know there’s like it just happens, you know, what day you’re in, what store, so it’s a matter of luck of the drop.

But just wanted to get your perspective on, you know, further leveraging promotion in liquid laundry, particularly, we’ve got this time with the consumer under more pressure, a way to kind of bring forward the message on the, you know, the value of the of the brand, etcetera, and just kind of thoughts on promotion from here. Thanks.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yeah. I would just reemphasize my comments. Like, if you if you look back a couple of years with history, and I have it right in front of me, like, we’ve averaged anywhere between, you know, 31, 33 amount sold on deal for Arm and Hammer laundry detergent. This is an IRI or Nielsen. And in q one, we were 31.

In q two, we were 33. So I think we’re right where is considered historical. We didn’t take remember I said last quarter, a couple other competitors, had compacted. A couple other competitors had taken price. We we didn’t do that.

I mean, we had done the compaction maybe eighteen months ago. So they were they were kinda catching up. So I feel like we’re right in the realm of normality, and I think the category is too.

Rick Dirker, President and Chief Executive Officer, Church and Dwight2: Okay. And just as a follow-up, just the depth, so not just the frequency, but just anything on depth of promotion.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yeah. I mean, depth of promotion, it’s a good question. I would say our depth of promotion has not changed at all. Like

Filippo Folorni, Analyst, Citi: Okay.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: We sometimes we we’ve we’ve line price certain SKUs in order to make sure that they can all hit the promotion. Price and sizing matters a lot, in this type of environment. I know what your your opening price points are and what your your kinda your pricing curves up to the large sizes, but I would say depth hasn’t changed either.

Lee McChesney, Chief Financial Officer, Church and Dwight: And, Lauren, if you look at the second quarter, yes, you see a little bit of negative price. But, again, you know, majority of that was related to our recall. So to your point, it’s nominal amount so far, just right in line with Rick’s comments.

Anna Lizzo, Analyst, Bank of America: Okay. Perfect. Thanks so much.

Conference Call Operator: Your next question comes from the line of Olivia Tong with Raymond James. Please go ahead.

Rick Dirker, President and Chief Executive Officer, Church and Dwight3: Great. Thanks. Good morning. I’m gonna start with a bit of a short term question question, but you had mentioned that July, you had a particularly easy comp and, saw a good growth off of that. Can you talk about the comps for August and September, if there

Rick Dirker, President and Chief Executive Officer, Church and Dwight1: are any callouts there?

Rick Dirker, President and Chief Executive Officer, Church and Dwight3: And then across your categories, peers have obviously talked about trade down both within their portfolio and then out of their portfolio. So to what extent is trade down a factor for you both in terms of, you know, the negative of trade down from black to orange and litter versus factors that are a tailwind to you like laundry? Thanks.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yep. I’ll take the second one first, Olivia. I think trade down overall is a benefit for us. And I and I think we’ve said this a few times, but there needs to be, I think, more recessionary type behavior and discussion before trade down really happens. I mean, the consumer still is resilient even though they faced all this inflation and and whatnot over these past few years.

But typically, when recessionary behavior and and economics are happening, that’s when extra starts to grow by leaps and bounds. That’s when orange box outpaces black box a lot. So right now, we’re doing well in my mind. I mean, you see that with all of our share scorecards. We are our value brands are growing share as as consumers are tight, But our premium brands that are problem solution brands continue continue to gain share as well.

And that’s the TheraBreath. That’s the hero. Nair is doing really well. So, you know, absent the recall stuff, Aurigil’s doing well. So, again, it’s it’s a cross section.

And then your first question Just the months. You know? Oh, the months. I I we’re not gonna make a new practice of talking about months. I’m sorry.

Like, I just wanted to give give a sense that there’s a high degree of confidence two and a half percent in the back half. That’s that’s my point.

Lee McChesney, Chief Financial Officer, Church and Dwight: And and all I would add is to your point, got that confidence in two and a half, and we obviously talked about the category growth and The US performance and probably, you know, should be noted also just the international team consistently performing again despite some of their macro challenge as well. So, I mean, that’s all embedded into that outlook for the back half.

Rick Dirker, President and Chief Executive Officer, Church and Dwight3: Alright. Got it. And then, just thinking about the portfolio overall, you know, vitamin, a strategic alternative, what have you, what’s your view on some of the other underperformance, particularly in personal care, as you think about positioning the company for faster growth and freeing up some resources to drive that?

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yeah. I feel like, look. Portfolio decisions aren’t done lightly. And and I feel like we’ve been very agnostic on where to go and, kinda where to play and and how to win. Like, it’s we’re we’re taking a white piece of paper and going through that with the board on here are the brands that we think, have a reason for being for decades.

And you saw kind of the output as we fast forwarded those decisions once tariff implications happened. Those were already underway and under discussion. And so that was really portfolio, you know, part one. Vitamins, that discussion, I know we’ve we’ve done our best to turn that around, some green shoots, but that’s why we’re talking about strategic alternatives today about vitamins. There are no further plans in the short or medium term to go through any other portfolio.

These brands are great brands. They have roles. Some of them might be cash cows versus, the primary growth drivers of of of the company, but they all have a role to play. And, we’re happy with the brands we have.

Anna Lizzo, Analyst, Bank of America: Alright. Thank you.

Conference Call Operator: Your next question comes from the line of Filippo Folorni with Citi. Please go ahead.

Filippo Folorni, Analyst, Citi: Hey, good morning, everyone. I wanted to ask on the tariff first. Within the $30,000,000 that you guided for the year, which is unchanged, what are really the countries that are getting impacted within the $30,000,000 I thought there was some China leftover impact there, so just curious there. And then outside of tariffs, in terms of commodities, what is your expectation in terms of your input cost basket? And maybe you can walk us through some of the major swings there.

Thank you.

Lee McChesney, Chief Financial Officer, Church and Dwight: Yeah. Good good question. So I’ll start off with the the just the broader inflation. It’s interesting. You know, it’s still still holding in there.

So you think about what we talked about for the, you know, normal amounts of inflation, we’re seeing that, you know, as we laid laid out for this year, it crept up a little bit earlier in the second quarter. It’s going to come back to still a slightly elevated level. The tariffs, I’ll state this. Number one, very, very proactive. So obviously, we’ve done all the things to manage through China.

So after that, you get into Korea, Thailand, Vietnam, Europe. Those are kind of our top. They make up about 73% of what’s left. Even the changes just overnight, actually, even, you know, net net makes that numbers, know, even a little bit little bit better. So, you know, the good thing is, you know, we’re down to know, whether we look at it by by country, look at it by product line, it’s kinda three or four, and we get to a large portion of, you know, what we’re facing here.

So, you know, again, this proactive nature says, hey. We’re not talking about a change this quarter. We’re just talking about how we’re gonna manage it, going forward here. And, again, majority will be through our productivity programs, And then we’ll, you know, we’ll look at some some pricing as well in some targeted areas.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yeah. And just to reemphasize, it changes all the time. Right? I mean, even in the release, we put we put $60,000,000 for our run rate for for twelve months. And even with the decisions overnight, now it’s closer to $50,000,000.

So it’s it’s gonna keep doing that. We have to the good thing about our company is we can move with speed and and and agility. And that’s what we have done. That’s what we’re gonna continue to do.

Filippo Folorni, Analyst, Citi: Great. Thank you, guys.

Conference Call Operator: Your next question comes from the line of Robert Moskow with TD Cowen. Please go ahead.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Hey, thanks. I just wanted

Rick Dirker, President and Chief Executive Officer, Church and Dwight4: to know if you could touch on a little more detail on the international business. It continues to outpace the rest of the portfolio. And I remember a key strategy of this was to expand US brands into these markets, either through export markets or where you operate your own businesses. Can you give us an update on how that’s doing? Like, how is Hero doing?

How is TheraBreath doing? And in a slower market, is it getting harder to, introduce them and and gain, attention? Thanks.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yeah. Great question, Robert. I you know, I’m I’m so pleased with how international is doing. International growth, you know, mid single digits, sometimes high single digits, really largely behind two or three factors. One is, as we as we have local brands like Staramar, even Batiste, kinda growing all over the world.

But as we also have these recent acquisitions like Therabreath or Hero and we’ve talked about it before, but Hero was in 50 countries within twelve months. I mean, that’s fantastic for us to be able to to get all the regulatory work done to do that, and we’re benefiting from that in a big way. There is a strong demand, for hearing and Therabreath all over the world. Many of these countries that we talk about, they’re having the same economic delays that that The US is. And so when categories are are zero to maybe negative in many of these countries, some of our competition, if you look at it, is actually declining in many of these countries.

We’re growing, and we’re growing mid single digits more often than not because of of some of the acquisitions and new brands for new retailers and driving growth for categories, same story we have here. And so we have I I guess the answer is yes. We’re we’re doing, brands just continue to to grow existing brands in in other countries all over the world. The new acquisitions are doing really well, and I think we have we’re in early early innings there. There’s more momentum to come.

And and then finally, you know, we we continue to look at acquisitions independently in in Europe and China. I think that team is ready for it. We just need to find the right fit. And and we look at at what countries we should should become a sub in the future. Like, there’s a whole there’s, like, four or five pieces of growth for international, but, they’re doing a great job.

Thank you.

Conference Call Operator: Your last question comes from the line of Kevin Gundy with BNP Paribas. Please go ahead.

Rick Dirker, President and Chief Executive Officer, Church and Dwight5: Great. Thanks. Good morning, everyone. Thanks for the question. Two quick ones, at least I hope they’re quick.

To follow-up on Lauren’s question, Rick, you guys sound fairly benign on the promotional environment. I asked this in the context. There’s there’s competing narratives. You guys sound fairly benign. Your key competitors suggesting that things are ramping.

The Nielsen data would suggest things are ramping, particularly around ARM and HAMMER. So with that context, what do you have embedded in the back half of the year for promotion levels, particularly for household, which is where you see most of the promotion? And if the answer is, like, we expect more of the same, which your your characterization was relatively flat, how much cushion do you have to respond? Because it seems like your competitor will. And then I have a follow-up.

Thank you.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yeah. I mean, look, you guys can ask all about promotions. I kinda gave you the answer. Q one and q two are within historical norms in laundry, and there’s not much more to go there. I mean, some of our competitors were lower on promotion in 2025.

But you gotta remember, it’s all about the net price point, and they took price as well. So sometimes when you look at promotion, you gotta make sure you’re factoring what the net net price is. So I would say promotion for us is consistent with the last three or four quarters, maybe even four or five quarters. And in the back half, you know, promotions are already set for the back half. They’ve they’ve been sold in for a while now.

So, in this environment, we saw and maybe it’s because we saw it further afield than most. But, you know, six months ago, nine months ago, we were seeing how some of the promotional volumes weren’t as effective because everyone you know, category was there. Everyone’s everyone’s promoting across many different categories. And so we made sure we put the plans in place even, you know, late last year, early this year for the whole promotional calendar. So I have a lot of confidence in in our laundry business.

Our laundry business in the month of June and July is continues to gain share, continues to do well. And I think part of that’s promotional, but I think part of that is is innovation. And deep clean continue continues to do well, hit hurdles, and and drive category growth. So long answer, but that’s that’s the facts that I look at.

Rick Dirker, President and Chief Executive Officer, Church and Dwight5: Okay. Very good. Thank you, Rick. And one one quick follow-up because I know the call is going long here. Just on the vitamin business to come back to that, can you talk about how you balance the timeliness to get something done and and naturally getting the best the best value you can for it and and and minimizing the potential risk that there’s another leg down in the business?

Because, you know, I think just intuitively when these sort of announcements are made, it shows sort of a decommitment to the asset to retailers and the business is struggling. And so from investors’ perspective, you know, if this goes two, three, four quarters, like, how do you protect against another leg down? So your your your comments there would would would be helpful as well. Thank you very much.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Yeah. Look. We’re running this business like we’re gonna own it forever. And and that means that the the the amount of time and energy we spend on innovation doesn’t change. The amount of time we spend on on promotional and pricing and programming doesn’t change.

That’s how we have to run it. And then if there’s a strategic choice to do something different, then that’s what we do. But that’s what our communication will be with the retailer. It’s they wanna they wanna they want VitaFusion and Little Crews to be successful too. It’s a big brand.

And so we’re gonna continue to show them the innovation, continue to show them, you know, why we believe it can grow categories after we get through this kind of TDP down cycle. But at the end of the day, it’s they’re they’re good brands. And I think for us, we’re spending an in inordinate amount of time for what’s relatively a small business. And so that weighs into my thinking on how much time the organization spends on supporting a business of that size versus the benefit. And that’s part of the, kinda, strategic decision too.

Rick Dirker, President and Chief Executive Officer, Church and Dwight5: Okay. Very good. Thank you, guys.

Conference Call Operator: I’d now like to turn the call back over to Rick Dircher for closing remarks. Please go ahead.

Rick Dirker, President and Chief Executive Officer, Church and Dwight: Okay. Well, thank you, everyone. Like like Lee and I said, a lot of confidence, as we look forward. The company is doing extremely well, in a tough environment. And we’ll talk more at the October on our next call.

Thank you.

Conference Call Operator: And gentlemen, this concludes today’s call. We thank you all for joining, and you may now disconnect.

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