CHURCH & DWIGHT CO INC /DE/ Q1 FY2025 earnings call

• Brand Portfolio Review: Pursuing strategic alternatives for Flawless, Spinbrush, and Waterpik showerhead businesses, generating $150M net sales (2% of total) with below-average profitability, expecting Q2 charge.
• Tariffs: Projected 12-month gross tariff exposure $190M, supply chain actions reduce exposure by 80%, e.g., no longer sourcing Waterpik flossers from China for U.S. market.
• Category Performance: U.S. categories grew ~1.5% in Q1 vs. typical 3%, laundry detergent and litter saw growth, gummy vitamins lagging, THERABREATH and HERO strong. International and SPD performing well.

U.S. Business: Organic sales declined 3% in Q1, driven by retail destocking. ARM & HAMMER liquid laundry detergent consumption grew 3.4%, ARM & HAMMER unit dose saw 26.9% growth. Gummy vitamins had consumption down 19%. THERABREATH mouthwash grew 26%, HERO acne care grew 13% with 280 basis point share gain. International and SPD: International business had 2.7% sales growth, organic sales up 5.8% led by HERO, THERABREATH, and WATERPIK. SPD organic sales increased 3.2% due to price and volume.

Full year organic growth outlook 0% to 2% due to weaker U.S. consumer. Q2 organic sales expected negative 2% to flat, adjusted EPS $0.85. Full year adjusted EPS 0% to 2% reflecting lower sales and tariffs. Excludes charges from divested businesses, ~$60M-$80M charge in Q2.

Retailer destocking impact on organic growth. Volatile tariff situation, though actions mitigate exposure. Weak U.S. consumer demand continuing to affect performance.

Q: Updated organic sales growth guide by segment?

A: International had 6% organic growth, SPD 3%, domestic expected similar to Q1 then improvement.

Q: Promotional backdrop?

A: Laundry and litter promotional levels stable, but categories flat may lead to increased promotion.

Q: Tariff impact?

A: Gross $190M run rate, mitigated to ~$40M post actions, P&L impact ~$30M in 2025.

Q: Vitamin business?

A: Focus on innovation, reformulation, marketing to drive trial; expect inflection by Q2.

Q: HERO growth?

A: 13% consumption growth, under-indexed to retailers with foot traffic issues, but strong elsewhere.

Q: M&A?

A: Still priority, looking for bolt-on acquisitions both domestically and internationally.