Church & Dwight Posts Strong Q3 Results; Shares Pop 2.5%

Shares of household products manufacturer Church & Dwight (CHD) gained 2.5% on Friday after the company reported better-than-expected results for the third quarter of 2021. 

Third-quarter earnings stood at $0.80 per share, topping the Street’s estimates of $0.71 per share. Also, the figure compares favorably with the earnings of $0.70 per share reported in the same quarter last year. (See Church & Dwight stock charts on TipRanks)

Total revenues of $1.31 billion outpaced the consensus estimate of $1.28 billion. The company had reported revenues of $1.24 billion last year. The upside can be attributed to a 4.6% rise in Consumer Domestic net sales, which were driven by household and personal care sales growth and acquisitions. Revenues for Consumer International segment grew 6.3%.

Meanwhile, the company said that its board of directors authorized a new common stock repurchase program of up to $1 billion. The new program replaces the previously authorized share repurchase program. Currently, Church & Dwight has outstanding shares of about 250 million. (See Insiders’ Hot Stocks on TipRanks)

The CEO of Church & Dwight, Matthew Farrell, said, “Despite the COVID-19 pandemic, supply chain disruptions and global economy challenges, we continue to expect 2021 to be another strong year both top and bottom line.”

“We expect supply availability issues to begin to abate in the first half of 2022 for most of our brands. With continued strength from consumer demand for our products, we are making significant capital investments in 2022 and 2023 to expand capacity in our factories as well as our supplier network,” Farrell added.

Management continues to expect 2021 to be another solid year for the company. Church & Dwight forecasts 2021 adjusted EPS to reflect a year-on-year growth of 6%. Sales are projected to increase 5.5% on a reported basis and 4% organically.

For the fourth quarter, Church & Dwight expects a strong consumption trend to support revenue growth of 3% on a reported basis and 2% organically. Also, adjusted EPS is expected to be $0.61 per share, up 15% year-over-year.

Overall, the Street has a Hold consensus rating based on 3 Buys, 4 Holds and 2 Sells. The average Church & Dwight price target stands at $90.33 and implies upside potential of 3.4% to current levels.

Investors should always be aware of the risks involved in any stock. According to the new TipRanks’ Risk Factors tool, CHD is at risk mainly from two factors: Ability to Sell and Legal & Regulatory, which contribute 24% and 21%, respectively, to the total 33 risks identified for the stock. Under the Ability to Sell risk category, Church & Dwight has eight risks, details of which can be found on the TipRanks website.

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