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Here's Why Church & Dwight (CHD) Appears to be a Promising Pick
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Church & Dwight Co., Inc. (CHD - Free Report) appears to be in a good spot, with its shares up 13.6% in the past six months compared with the industry’s growth of 6.3%. The consumer product behemoth has been benefiting from impressive demand, bolstered by consistent innovation, new product launches and strategic acquisitions, such as the Hero brand.
Brand strength, efficient pricing and productivity gains have been working well for the company, which was evident in its fourth-quarter 2023 results, wherein the top and bottom lines beat the Zacks Consensus Estimate and increased year over year. Also, these upsides keep this Zacks Rank #2 (Buy) company well-placed for continued growth.
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has increased by a penny to $3.44 over the past 30 days. The consensus mark suggests growth of 8.5% from the year-ago period reported figure.
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Buyouts & Innovation Boost Brand Strength
Church & Dwight’s regular innovation, product introductions and acquisitions have helped it curate a solid portfolio. The company boasts 14 power brands, out of which THERABREATH, VITAFUSION, HERO, ARM &HAMMER, WATERPIK, BATISTE and OXICLEAN generate a significant portion of revenues and profits. In 2023, the company’s domestic brands saw consumption growth in 10 of 17 categories.
The company recently completed its buyout of the Hero Mighty Patch brand (or Hero) and other acne treatment products. In December 2021, Church & Dwight concluded the buyout of TheraBreath, a leading brand in the mouthwash category. THERABREATH mouthwash and the HERO brand delivered impressive consumption growth and grew market share in the fourth quarter of 2023 and are expected to generate robust growth in 2024.
Also, in December 2020, the company took over Matrixx Initiatives, which owns the ZICAM brand (a leading zinc supplement in the United States in the vitamins, minerals, and supplements or VMS cough/cold shortening category). Another noteworthy acquisition of the company includes Batiste. The buyouts of FLAWLESS and WATERPIK have also been prudent additions to Church & Dwight’s portfolio.
Church & Dwight has been differentiating its brands to consumers through innovative products, packaging and forms. It has launched ARM & HAMMER Power Sheets laundry detergent online. The company also launched ARM & HAMMER Hardball, aimed at capturing a greater share of the lightweight litter category. Also, the TROJAN brand is building on the success of the Raw franchise by offering the new TROJAN Raw Non-Latex condom.
Management also highlighted that the THERABREATH brand has extended operations to the kids’ category with the launch of three new fluoride types of mouthwashes. The NAIR brand has introduced Prep & Smooth, a one-step solution that preps the face for makeup application in a No-Touch, No-Mess format. The company’s HERO brand remains focused on undertaking innovation in the acne treatment arena.
Pricing Aids Amid Cost Woes
Church & Dwight resorted to incremental pricing across its portfolio to counter rising costs. Favorable pricing remained an upside to the company’s organic sales in the fourth quarter of 2023. Organic sales increased 5.3% due to gains from volumes to the tune of 1.3%, a favorable product mix and pricing of 4%. Another factor working for Church & Dwight is the online channel. Global online sales, as a percentage of total consumer sales, stood at 20% in 2023.
Carryover product pricing, mix, favorable volume and productivity are likely to remain drivers in 2024. Church & Dwight expects 2024 reported and organic sales growth of 4-5%. For the first quarter of 2024, CHD expects a nearly 4% increase in reported organic sales.
The company projects 2024 adjusted earnings per share (EPS) growth of 7-9%, which includes a 1% drag associated with the MEGALAC business. Excluding the MEGALAC impact, adjusted EPS is likely to increase 8-10%.
The Zacks Consensus Estimate for The Chef’s Warehouse’s current fiscal-year sales and earnings suggests growth of 8.7% and 4.7%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently carries a Zacks Rank #2. VITL has a trailing four-quarter average earnings surprise of 155.4%.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 18.6% and 35.6%, respectively, from the year-ago reported numbers.
Utz Brands Inc. (UTZ - Free Report) manufactures a diverse portfolio of salty snacks and currently carries a Zacks Rank #2. UTZ has a trailing four-quarter earnings surprise of 2.6%, on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year earnings suggests growth of 17.5% from the year-ago reported numbers.
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Here's Why Church & Dwight (CHD) Appears to be a Promising Pick
Church & Dwight Co., Inc. (CHD - Free Report) appears to be in a good spot, with its shares up 13.6% in the past six months compared with the industry’s growth of 6.3%. The consumer product behemoth has been benefiting from impressive demand, bolstered by consistent innovation, new product launches and strategic acquisitions, such as the Hero brand.
Brand strength, efficient pricing and productivity gains have been working well for the company, which was evident in its fourth-quarter 2023 results, wherein the top and bottom lines beat the Zacks Consensus Estimate and increased year over year. Also, these upsides keep this Zacks Rank #2 (Buy) company well-placed for continued growth.
The Zacks Consensus Estimate for 2024 earnings per share (EPS) has increased by a penny to $3.44 over the past 30 days. The consensus mark suggests growth of 8.5% from the year-ago period reported figure.
Image Source: Zacks Investment Research
Buyouts & Innovation Boost Brand Strength
Church & Dwight’s regular innovation, product introductions and acquisitions have helped it curate a solid portfolio. The company boasts 14 power brands, out of which THERABREATH, VITAFUSION, HERO, ARM &HAMMER, WATERPIK, BATISTE and OXICLEAN generate a significant portion of revenues and profits. In 2023, the company’s domestic brands saw consumption growth in 10 of 17 categories.
The company recently completed its buyout of the Hero Mighty Patch brand (or Hero) and other acne treatment products. In December 2021, Church & Dwight concluded the buyout of TheraBreath, a leading brand in the mouthwash category. THERABREATH mouthwash and the HERO brand delivered impressive consumption growth and grew market share in the fourth quarter of 2023 and are expected to generate robust growth in 2024.
Also, in December 2020, the company took over Matrixx Initiatives, which owns the ZICAM brand (a leading zinc supplement in the United States in the vitamins, minerals, and supplements or VMS cough/cold shortening category). Another noteworthy acquisition of the company includes Batiste. The buyouts of FLAWLESS and WATERPIK have also been prudent additions to Church & Dwight’s portfolio.
Church & Dwight has been differentiating its brands to consumers through innovative products, packaging and forms. It has launched ARM & HAMMER Power Sheets laundry detergent online. The company also launched ARM & HAMMER Hardball, aimed at capturing a greater share of the lightweight litter category. Also, the TROJAN brand is building on the success of the Raw franchise by offering the new TROJAN Raw Non-Latex condom.
Management also highlighted that the THERABREATH brand has extended operations to the kids’ category with the launch of three new fluoride types of mouthwashes. The NAIR brand has introduced Prep & Smooth, a one-step solution that preps the face for makeup application in a No-Touch, No-Mess format. The company’s HERO brand remains focused on undertaking innovation in the acne treatment arena.
Pricing Aids Amid Cost Woes
Church & Dwight resorted to incremental pricing across its portfolio to counter rising costs. Favorable pricing remained an upside to the company’s organic sales in the fourth quarter of 2023. Organic sales increased 5.3% due to gains from volumes to the tune of 1.3%, a favorable product mix and pricing of 4%. Another factor working for Church & Dwight is the online channel. Global online sales, as a percentage of total consumer sales, stood at 20% in 2023.
Carryover product pricing, mix, favorable volume and productivity are likely to remain drivers in 2024. Church & Dwight expects 2024 reported and organic sales growth of 4-5%. For the first quarter of 2024, CHD expects a nearly 4% increase in reported organic sales.
The company projects 2024 adjusted earnings per share (EPS) growth of 7-9%, which includes a 1% drag associated with the MEGALAC business. Excluding the MEGALAC impact, adjusted EPS is likely to increase 8-10%.
3 Other Solid Bets
The Chef’s Warehouse (CHEF - Free Report) , which engages in the distribution of specialty food products, currently carries a Zacks Rank #2. CHEF has a trailing four-quarter earnings surprise of 3.2%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for The Chef’s Warehouse’s current fiscal-year sales and earnings suggests growth of 8.7% and 4.7%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently carries a Zacks Rank #2. VITL has a trailing four-quarter average earnings surprise of 155.4%.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 18.6% and 35.6%, respectively, from the year-ago reported numbers.
Utz Brands Inc. (UTZ - Free Report) manufactures a diverse portfolio of salty snacks and currently carries a Zacks Rank #2. UTZ has a trailing four-quarter earnings surprise of 2.6%, on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year earnings suggests growth of 17.5% from the year-ago reported numbers.