Summary of Church & Dwight (CHD) Q4 2025 Earnings Call

1Key Financial Results and Metrics

Q4 2025 Performance: Total sales increased by 3.9%, surpassing expectations, driven largely by the acquisition of Touchland. Organic sales growth was 0.7%, but adjusted for the divested Vitamins business, organic growth was 1.8%.

Gross Margin: Improved by 90 basis points compared to the previous year, aided by effective cost management and productivity initiatives.

Earnings Per Share (EPS): Reported at $0.86, up 12% year-over-year.

Full-Year Performance: Total sales growth of 1.6% and organic growth of 0.7%, or 2% when excluding Vitamins.

2Strategic Updates and Business Highlights

Category Growth: CHD outperformed in several categories, with double-digit growth in brands like Hero and TheraBreath. Four out of eight power brands gained market share.

Portfolio Restructuring: Divested from the Vitamins and Spinbrush businesses, focusing on higher-margin brands and categories.

Acquisition of Touchland: Integrated into the portfolio with strong initial performance and plans for international expansion.

Innovation Focus: Approximately half of growth is attributed to new product introductions, with continued emphasis on the ARM & HAMMER brand and its expansion into new categories.

3Forward Guidance and Outlook

2026 Guidance: Expected organic sales growth of 3% to 4%, with reported sales anticipated to decline by 1.5% to 0.5% due to business exits. EPS growth projected at 5% to 8%.

Gross Margin Improvement: Anticipated increase of about 100 basis points, driven by productivity and a favorable product mix.

International Growth: Continued focus on expanding international operations, particularly for brands like Hero and TheraBreath.

4Bad News, Challenges, or Points of Concern

Consumer Sentiment: Weak consumer confidence at five-year lows may impact spending, particularly in the U.S. market.

Category Deceleration: Overall market growth slowed, with CHD's categories growing only 1.8% in 2025.

Competitive Pressures: Increased promotional activity from competitors, particularly in the laundry and personal care segments, could impact margins.

Vitamins Business Exit: The divestiture of the Vitamins business, while strategic, reflects challenges in that category and the need for management focus on more profitable areas.

5Notable Q&A Insights

ARM & HAMMER Growth: Management expressed confidence in accelerating ARM & HAMMER growth from $2 billion to $3 billion, emphasizing innovation and market share strategies.

Touchland Expansion: The company is cautious about over-distributing Touchland to maintain brand exclusivity while exploring international markets.

ERP Transition: Management reassured that the ongoing SAP transition is on track and will enhance operational efficiency, reducing risks typically associated with such changes.

Promotional Environment: Management acknowledged the elevated promotional landscape but emphasized the strength of their brands and the effectiveness of their marketing strategies in maintaining share. Overall, CHD demonstrated resilience in a challenging market environment, with strategic initiatives aimed at driving growth and profitability while navigating competitive pressures and consumer sentiment challenges.