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What's in the Offing for Church & Dwight (CHD) in Q1 Earnings?

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Church & Dwight Co., Inc. (CHD - Free Report) is likely to witness year-over-year growth in its top line when it reports first-quarter 2022 earnings on Apr 28. The Zacks Consensus Estimate for revenues is pegged at $1,286 million, suggesting a jump of 3.8% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for earnings has dropped by a penny over the past 30 days to 76 cents per share. This indicates a decline of 8.4% from the figure reported in the prior-year period. Church & Dwight has a trailing four-quarter earnings surprise of 8.8%, on average. This consumer products company delivered an earnings surprise of 10.3% in the last reported quarter.

Church & Dwight Co., Inc. Price, Consensus and EPS Surprise

 

Key Factors to Consider

Church & Dwight has been benefiting from its brand strength due to its focus on buyouts and innovation. In December 2021, CHD concluded the buyout of TheraBreath, a leading brand in the mouthwash category, which marks the company's 14th power brand. This is likely to have contributed to its first-quarter results. Apart from this, the buyouts of FLAWLESS and WATERPIK have been prudent additions to Church & Dwight’s portfolio, which have been doing very well recently.

Additionally, the company’s regular innovation helps improve brand positions and market share in consumer categories. On its last earnings call, Church & Dwight stated that it is on track to undertake impressive product launches in 2022. These factors are likely to have acted as upsides in the quarter under review.

However, CHD has been encountering major challenges related to inflation, commodities, distribution and labor. In 2021, Church & Dwight’s cost of goods sold inflation increased by $250 million or 9% year over year. On its fourth-quarter earnings call, management stated that it expects greater input costs and transportation costs in 2022. It also anticipates U.S. labor shortages in the full year, which aggravated due to the Omicron variant. These factors raise concerns for the quarter under review.  That said, Church & Dwight resorted to incremental pricing across its portfolio to counter the rising costs.  On its last earnings call, management said that it anticipates raising prices for nearly 80% of its product portfolio as of February 2022 and intends to make more increases in 2022.

Management also stated that in 2022 it expects various categories to remain at escalated consumption levels, such as laundry, gummy vitamins, laundry additives, hair growth supplements and cat litter. CHD is likely to keep benefiting from consumers’ elevated focus on maintaining cleaner homes and self-care routines. Also, the return to pre-pandemic social activities bodes well. For the first quarter of 2022, the company expects a 3-4% increase in reported sales and organic sales are estimated to have risen 1-2%.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Church & Dwight this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.

Church & Dwight currently has a Zacks Rank #3 and an Earnings ESP of +2.69%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks With the Favorable Combination

Here are some other companies that you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Hershey (HSY - Free Report) has an Earnings ESP of +1.84% and a Zacks Rank #2. It is anticipated to register a top and bottom-line increase when it reports first-quarter 2022 results. The Zacks Consensus Estimate for Hershey’s revenues is pegged at $2,482 million, indicating growth of 8.1% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Hershey’s quarterly earnings is pegged at $2.10 per share, suggesting a rise of 9.4% from the year-ago quarter’s reported figure. HSY delivered an earnings beat of 4.3%, on average, in the trailing four quarters.

Inter Parfums (IPAR - Free Report) has an Earnings ESP of +5.60% and a Zacks Rank #2. The company is expected to register top-line growth when it reports first-quarter 2022 results. The consensus mark for Inter Parfums’ revenues is pegged at $219.4 million, indicating a rise of 10.5% from the year-ago quarter.

The Zacks Consensus Estimate for Inter Parfums’ bottom line stands at 83 cents per share, which suggests a decline of 4.6% from the year-ago period’s reported figure. IPAR has a trailing four-quarter earnings surprise of 46.7%, on average.

The Estee Lauder Companies (EL - Free Report) has an Earnings ESP of +0.97% and a Zacks Rank #3. The company is expected to register top and bottom-line growth when it reports third-quarter fiscal 2022 results. The consensus mark for Estee Lauder’s revenues is pegged at $4,292 million, indicating an increase of 11.1% from the year-ago quarter.

The Zacks Consensus Estimate for Estee Lauder’s quarterly EPS of $1.65 suggests a rise of 0.6% from the year-ago quarter’s reported figure. EL has a trailing four-quarter earnings surprise of 26.5%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.