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Favorable Demand to Keep Church & Dwight (CHD) Cheering in 2021
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Cleaning and hygiene-related products witnessed a whole new high during 2020, thanks to the coronavirus pandemic. Renowned personal care products company Church & Dwight Co., Inc. (CHD - Free Report) is no exception to such trend. In fact, the favorable market scenario for cleaning products led management to provide an optimistic sales outlook for the fourth quarter as well as for 2020. Industry experts believe that such trends are likely to persist even in 2021 and after the pandemic subsides, as consumers have begun to increasingly understand the importance of personal hygiene in maintaining a healthy lifestyle. Additionally, Church & Dwight is gaining from strong e-commerce sales and new product launches. Let’s delve deeper.
Pandemic-Led Demand Acts as Boon
Church & Dwight’s products are witnessing rising demand driven by the cleaning frenzy among consumers amid the pandemic. The trend was well exemplified in the company’s third-quarter 2020 results, with the top and the bottom line increasing year over year and beating the Zacks Consensus Estimate. Additionally, consumers’ shifted preference for essential items aided the company’s household and personal care businesses. Management highlighted that the pandemic has led to double-digit consumption growth across several domestic categories, especially for products like gummy vitamins, women’s hair removal, cleaners and baking soda. Moreover, its international business was strong on the back of broad-based consumption growth across several brands.
Encouraged with the trends witnessed so far, the company raised its sales guidance for 2020. It now anticipates sales growth of 11% compared with increase of 9-10% mentioned earlier. For the fourth quarter, the company expects 9% increase in sales, while organic sales are expected to rise 8%.
Management highlights that it is on track with boosting manufacturing capacity at plants to continue tapping the rise in demand. Further, the company is working with retail associates and suppliers to ensure a smooth supply chain and support increased demand. These measures are likely to support the company’s performance in the coming year as well.
Digital Growth
The company’s e-commerce platform is gaining from consumers’ accelerated preference for online shopping. During the third quarter, the company’s online sales surged 77% with growth across all retailer websites. Online sales contributed 13% to total sales in the reported quarter compared with 8% in the prior-year quarter. For 2020, the company expects online sales to contribute nearly 14% to total sales.
Wrapping Up
Church & Dwight’s strong brand position across various categories, positions it well to continue growing. Additionally, the company’s regular innovation helps in improving market share in the consumer categories. Such upsides along with expectations of favorable market trends for cleaning products are likely to keep fueling this Zacks Rank #3 (Hold) company. Markedly, shares of the company have gained 12.3% in the past six months compared with the industry’s rise of 14.5%.
Sysco Corporation (SYY - Free Report) , also with a Zacks Rank of 2, has a long-term earnings growth rate of 11%.
B&G Foods, Inc. (BGS - Free Report) has a Zacks Rank #2 and a trailing four-quarter earnings surprise of 9.3%, on average.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Favorable Demand to Keep Church & Dwight (CHD) Cheering in 2021
Cleaning and hygiene-related products witnessed a whole new high during 2020, thanks to the coronavirus pandemic. Renowned personal care products company Church & Dwight Co., Inc. (CHD - Free Report) is no exception to such trend. In fact, the favorable market scenario for cleaning products led management to provide an optimistic sales outlook for the fourth quarter as well as for 2020. Industry experts believe that such trends are likely to persist even in 2021 and after the pandemic subsides, as consumers have begun to increasingly understand the importance of personal hygiene in maintaining a healthy lifestyle. Additionally, Church & Dwight is gaining from strong e-commerce sales and new product launches. Let’s delve deeper.
Pandemic-Led Demand Acts as Boon
Church & Dwight’s products are witnessing rising demand driven by the cleaning frenzy among consumers amid the pandemic. The trend was well exemplified in the company’s third-quarter 2020 results, with the top and the bottom line increasing year over year and beating the Zacks Consensus Estimate. Additionally, consumers’ shifted preference for essential items aided the company’s household and personal care businesses. Management highlighted that the pandemic has led to double-digit consumption growth across several domestic categories, especially for products like gummy vitamins, women’s hair removal, cleaners and baking soda. Moreover, its international business was strong on the back of broad-based consumption growth across several brands.
Encouraged with the trends witnessed so far, the company raised its sales guidance for 2020. It now anticipates sales growth of 11% compared with increase of 9-10% mentioned earlier. For the fourth quarter, the company expects 9% increase in sales, while organic sales are expected to rise 8%.
Management highlights that it is on track with boosting manufacturing capacity at plants to continue tapping the rise in demand. Further, the company is working with retail associates and suppliers to ensure a smooth supply chain and support increased demand. These measures are likely to support the company’s performance in the coming year as well.
Digital Growth
The company’s e-commerce platform is gaining from consumers’ accelerated preference for online shopping. During the third quarter, the company’s online sales surged 77% with growth across all retailer websites. Online sales contributed 13% to total sales in the reported quarter compared with 8% in the prior-year quarter. For 2020, the company expects online sales to contribute nearly 14% to total sales.
Wrapping Up
Church & Dwight’s strong brand position across various categories, positions it well to continue growing. Additionally, the company’s regular innovation helps in improving market share in the consumer categories. Such upsides along with expectations of favorable market trends for cleaning products are likely to keep fueling this Zacks Rank #3 (Hold) company. Markedly, shares of the company have gained 12.3% in the past six months compared with the industry’s rise of 14.5%.
Check These Solid Consumer Staples Stocks
The Hain Celestial Group, Inc. (HAIN - Free Report) , carrying a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 24.6%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sysco Corporation (SYY - Free Report) , also with a Zacks Rank of 2, has a long-term earnings growth rate of 11%.
B&G Foods, Inc. (BGS - Free Report) has a Zacks Rank #2 and a trailing four-quarter earnings surprise of 9.3%, on average.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>