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Church & Dwight (CHD) Shares Up 21.9% YTD: What's Driving It?
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Shares of Church & Dwight Co., Inc. (CHD - Free Report) have rallied 21.9% so far this year. The company’s strength across its businesses, accretive acquisitions, effective pricing actions and shareholder-friendly policies seem to have boosted sentiments for the stock.
Church & Dwight has a $24 billion market capitalization and currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Year-to-date, the company’s shares have outperformed the industry’s decline of 0.2%. Notably, the S&P 500 has risen by 15.6%, while the sector dropped 2.8% during the same period.
Catalysts Behind the Share Price Increase
Church & Dwight has been enjoying robust momentum in its household and personal care end markets, supported by solid demand for its products. The company reported strong first-quarter 2023 results, wherein both top and bottom lines increased year over year.
CHD registered net sales of $1,429.8 million, reflecting an increase of 10.2% year over year and beating the Zacks Consensus Estimate of $1,352 million. Its adjusted earnings came in at 85 cents per share, beating the Zacks Consensus Estimate of 76 cents. The bottom line also increased by 2.4% year-over-year.
Driven by robust consumer demand and improved case fill, Church & Dwight raised its full-year 2023 outlook. For 2023, it expects its sales to grow by 6-7%, up from its previous guidance of 5-7%. The company anticipates organic sales growth of roughly 3-4%, reflecting strong operating fundamentals as operating profit is expected to increase by 6-8% compared with previous guidance of 4-8%. For 2023, CHD also raised its year-over-year adjusted earnings per share (“EPS”) growth outlook to 2-4% from its earlier guidance of 0-4%.
For the second quarter of 2023, the company anticipates year-over-year growth of 7% in sales. Also, it expects second-quarter adjusted EPS of 78 cents, indicating an increase of 2.6% from the year-ago quarter figure.
The company has also been benefiting from its solid online channel. For instance, in the first quarter, the company’s online sales, as a percentage of total sales, came in at 16.3%. For 2023, it expects pricing and productivity to more than offset inflation.
Church & Dwight believes in strengthening its businesses through the addition of assets. Some notable buyouts made by the company include the acquisitions of Hero Mighty Patch (HERO) and THERABREATH. In the first quarter, these acquisitions witnessed double-digit consumption growth and market share gains.
Strong cash flow generation capacity supports Church & Dwight’s shareholder-friendly activities. In the first quarter, CHD rewarded its shareholders with a dividend payment of $66.3 million, up 4.1% year over year. Also, in February 2023, the quarterly dividend rate was hiked by 4%. Its ability to generate healthy cash flow will support returning more value to shareholders in the upcoming quarters.
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gift products. The Zacks Consensus Estimate for Urban Outfitters’ current financial-year sales and earnings per share suggests growth of 5.1% and 57.1%, respectively, from the corresponding year-ago reported figures. URBN has a trailing four-quarter earnings surprise of 12.2%, on average.
Colgate is a manufacturer of consumer products worldwide. The Zacks Consensus Estimate for Colgate’s current financial-year sales suggests growth of 6.3%. Its earnings per share are expected to rise 5.7% from the corresponding year-ago reported figures. CL has a trailing four-quarter earnings surprise of 1.4%, on average.
Clorox is a leading manufacturer of consumer and professional products worldwide. The Zacks Consensus Estimate for CLX’s current financial-year sales and earnings per share suggests growth of 2% and 11.2%, respectively, from the corresponding year-ago reported figures. The company has a trailing four-quarter earnings surprise of 25.5%, on average.
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Church & Dwight (CHD) Shares Up 21.9% YTD: What's Driving It?
Shares of Church & Dwight Co., Inc. (CHD - Free Report) have rallied 21.9% so far this year. The company’s strength across its businesses, accretive acquisitions, effective pricing actions and shareholder-friendly policies seem to have boosted sentiments for the stock.
The Ewing, NJ-based company belongs to the Zacks Soap and Cleaning Materials industry, which comes under the ambit of the Zacks Consumer Staples sector.
Church & Dwight has a $24 billion market capitalization and currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Year-to-date, the company’s shares have outperformed the industry’s decline of 0.2%. Notably, the S&P 500 has risen by 15.6%, while the sector dropped 2.8% during the same period.
Catalysts Behind the Share Price Increase
Church & Dwight has been enjoying robust momentum in its household and personal care end markets, supported by solid demand for its products. The company reported strong first-quarter 2023 results, wherein both top and bottom lines increased year over year.
CHD registered net sales of $1,429.8 million, reflecting an increase of 10.2% year over year and beating the Zacks Consensus Estimate of $1,352 million. Its adjusted earnings came in at 85 cents per share, beating the Zacks Consensus Estimate of 76 cents. The bottom line also increased by 2.4% year-over-year.
Driven by robust consumer demand and improved case fill, Church & Dwight raised its full-year 2023 outlook. For 2023, it expects its sales to grow by 6-7%, up from its previous guidance of 5-7%. The company anticipates organic sales growth of roughly 3-4%, reflecting strong operating fundamentals as operating profit is expected to increase by 6-8% compared with previous guidance of 4-8%. For 2023, CHD also raised its year-over-year adjusted earnings per share (“EPS”) growth outlook to 2-4% from its earlier guidance of 0-4%.
For the second quarter of 2023, the company anticipates year-over-year growth of 7% in sales. Also, it expects second-quarter adjusted EPS of 78 cents, indicating an increase of 2.6% from the year-ago quarter figure.
The company has also been benefiting from its solid online channel. For instance, in the first quarter, the company’s online sales, as a percentage of total sales, came in at 16.3%. For 2023, it expects pricing and productivity to more than offset inflation.
Church & Dwight believes in strengthening its businesses through the addition of assets. Some notable buyouts made by the company include the acquisitions of Hero Mighty Patch (HERO) and THERABREATH. In the first quarter, these acquisitions witnessed double-digit consumption growth and market share gains.
Strong cash flow generation capacity supports Church & Dwight’s shareholder-friendly activities. In the first quarter, CHD rewarded its shareholders with a dividend payment of $66.3 million, up 4.1% year over year. Also, in February 2023, the quarterly dividend rate was hiked by 4%. Its ability to generate healthy cash flow will support returning more value to shareholders in the upcoming quarters.
Other Key Picks
Some other top-ranked stocks are Urban Outfitters, Inc. (URBN - Free Report) , Colgate-Palmolive Company (CL - Free Report) and The Clorox Company (CLX - Free Report) . While Urban Outfitters sports a Zacks Rank #1 (Strong Buy), Colgate and Clorox each carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home décor and gift products. The Zacks Consensus Estimate for Urban Outfitters’ current financial-year sales and earnings per share suggests growth of 5.1% and 57.1%, respectively, from the corresponding year-ago reported figures. URBN has a trailing four-quarter earnings surprise of 12.2%, on average.
Colgate is a manufacturer of consumer products worldwide. The Zacks Consensus Estimate for Colgate’s current financial-year sales suggests growth of 6.3%. Its earnings per share are expected to rise 5.7% from the corresponding year-ago reported figures. CL has a trailing four-quarter earnings surprise of 1.4%, on average.
Clorox is a leading manufacturer of consumer and professional products worldwide. The Zacks Consensus Estimate for CLX’s current financial-year sales and earnings per share suggests growth of 2% and 11.2%, respectively, from the corresponding year-ago reported figures. The company has a trailing four-quarter earnings surprise of 25.5%, on average.