Church & Dwight Co., Inc.’s (CHD - Free Report) consumer international segment has been performing well for quite some time now, thereby driving its top line.
In first-quarter 2018, overall international sales surged 26.3%, driven by recent acquisitions, broad-based sales growth for household and personal care products, and improvements in export business. Notably, the segment received considerable impetus from OXICLEAN in the export business — STERIMAR, ARM & HAMMER toothpaste and OXICLEAN in Mexico, and FEMFRESH and BATISTE in Australia. Well, ARM & HAMMER remains the company’s biggest international brand, which is well placed to grow further in emerging markets.
In fact, the international consumer business has been a growth driver over the past few years and exceeded expectations with 11.8%, 7.4%, 6.2% and 5.8% organic growth in the first, second, third and fourth quarter of 2017, respectively. The company is also opening new offices in order to support increase in export business and expects this business to remain strong.
Further, it is making considerable investments in Southeast Asia and China, which is likely to be a major growth driver in future. This is evident from the company’s recent tie-up with DKSH, to make the latter Church & Dwight’s leading distributor in Southeast Asia.
Also, the international consumer business has been consistently contributing to organic sales growth of the company. Evidently, organic sales grew 3.8% in the first quarter of 2018. Further, organic sales jumped 2.3%, 1.8%, 3.2% and 3.4% in first, second, third and fourth-quarter 2017, respectively.
In the first quarter, organic sales growth was driven by a 4.2% rise in global consumer products growth. This was backed by organic sales growth across both Consumer Domestic and International segment, wherein organic sales rose 3.6% and 6.8%, respectively. Organic sales at Consumer International segment was backed by improved volumes (up 1.6%), along with better price and product mix (up 5.2%).
Continued strength at Consumer International along with solid growth in Consumer Domestic businesses drove Church & Dwight’s results in the first quarter. Both top and bottom lines grew year over year and came ahead of the Zacks Consensus Estimate.
Notably, this marked the company’s sixth and third consecutive quarter of positive earnings and sales surprise, respectively. Clearly, the company’s investment spending is paying off. Going forward, the company continues to invest in the international consumer business to sustain its strong sales growth.
Let’s see if these factors can fuel growth at this Zacks Rank #3 (Hold) stock, which has gained a marginal 0.5% in the past six months, better than the industry that tumbled 7.8%.
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