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Church & Dwight Tumbles on 'Softer Results'

Stock Markets Jul 30, 2022 04:20
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By Sam Boughedda

Church & Dwight (NYSE:CHD) shares are down 8.7% Friday on the back of its earnings release, which saw it beat earnings per share expectations but miss revenue forecasts.

The company posted second-quarter earnings of $0.76 per share, topping analyst estimates by $0.04. However, revenue for the quarter came in at $1.33 billion, below the consensus estimate of $1.34 billion.

The company now expects an additional $50 million cost increase in 2022 compared to prior expectations. "In April we announced another round of mid to high single-digit price increases on our Fabric Care and Litter products, which became effective in July," said Matthew Farrell, Church & Dwight Chief Executive Officer. "In addition to incremental pricing actions, we will continue to pursue additional measures to offset these higher costs through productivity and pack size changes."

Reacting to the report, a Goldman Sachs analyst maintained a Neutral rating and $104 price target on Church & Dwight shares.

"CHD delivered 2Q EPS of $0.76 (vs. GS/FactSet consensus $0.75/$0.72) as a modest miss on sales (org sales +3.4% vs. GS/Visible Alpha Consensus Data +3.9%) was offset by lower marketing spend (a $0.05 tailwind to EPS)," said the analyst. "Looking forward, management lowered its full-year outlook for the second time this year. It now expects organic sales to growth 3-4% (at the lower end of its prior 3-6% range) and sees EPS flat for the year (vs. roughly +4% at 1Q22 and +4-8% at 4Q21) on higher cost inflation and despite a lower marketing spend assumption for the year. We expect the stock to underperform on the softer results and lowered outlook."

Church & Dwight Tumbles on 'Softer Results'
 

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