EWING, N.J.–(BUSINESS WIRE)–Church & Dwight Co., Inc. (NYSE: CHD) today announced the Company exceeded its outlook with stronger than expected sales growth. Full year 2024 net sales increased 4.1% to $6,107.1 million, ahead of the Company’s outlook of approximately 3.5% growth. The Company drove strong consumer demand across its portfolio and geographies in 2024. Organic sales increased 4.6% due to higher volume of 3.3% and positive pricing and mix of 1.3%.
Matthew Farrell, Chief Executive Officer, commented, “We are thrilled to deliver another year of strong results. Our outstanding full year 2024 results reflect the strength of our brands, the success of our new products, and our continued focus on execution. Volume was the primary driver of organic growth, which we expect to continue in 2025. Marketing as a percentage of sales increased 50 basis points driving consumption and share gains. Global online sales grew to 21.4% of total consumer sales in 2024. Finally, the combination of strong sales, margin expansion, and efficient working capital management resulted in strong cash flow generation, with over $1.1 billion of cash from operations in 2024. The investments we have made behind our brands position the Company well for the future.
“For the full year, all three of our businesses delivered strong organic growth. The Domestic Division grew 3.5% organically with five of our seven power brands growing share. Organic growth in the International Division was 9.0%, driven by growth in both our country subsidiaries and our Global Markets Group. Our Specialty Products Division grew organic sales 7.1%.”
Reported gross margin expanded by 160 basis points and adjusted gross margin expanded by 110 basis points in 2024 with productivity, pricing, volume, and strong contributions from higher margin acquisitions more than offsetting inflation. Higher sales and gross margin expansion resulted in adjusted pretax income growth for 2024 of 10.1%.
Full year EPS was $2.37, a decrease of 22.3% compared to 2023 reported EPS, primarily due to non-cash asset impairment charges in our vitamin business. Full year 2024 Adjusted EPS was $3.44, an increase of 8.5% compared to 2023 Adjusted EPS. Full year Adjusted EPS exceeded the Company’s outlook of 8%, driven by higher sales.
Q4 net sales were $1,582.0 million, a $54.0 million or 3.5% increase compared to net sales in Q4 2023. This exceeded the Company’s outlook of 1.5% to 2.5% growth. Organic sales increased 4.2%, exceeding the Company’s outlook of 2% to 3%, driven by 3.0% from higher volume and 1.2% from positive price and product mix. Reported EPS for Q4 was $0.76, a 22.6% increase. Adjusted EPS in Q4 was $0.77 compared to $0.65 in Q4 2023, an 18.5% increase.
Fourth Quarter Review
Consumer Domestic net sales were $1,225.7 million, a $32.7 million or 2.7% increase driven by household and personal care sales growth. Organic sales increased 2.7% due to volume (+2.0%) and price and product mix (+0.7%). Growth was led by ARM & HAMMER™ liquid laundry detergent, HERO™ acne products, THERABREATH™ mouthwash, partially offset by declines in the vitamin business and SPINBRUSH™.
Consumer International net sales were $285.1 million, a $26.3 million or 10.2% increase. Organic sales increased 9.6% due to a combination of higher volume (+7.1%) and price and product mix (+2.5%). Growth was led by HERO, OXICLEAN™ and THERABREATH.
Specialty Products net sales were $71.2 million, a $5.0 million or a 6.6% decrease reflecting the exit of the Megalac business in Q1 2024 and the food safety business in Q2 2024. Organic sales increased 10.3% due to a combination of higher volume (+5.3%) and price and product mix (+5.0%). The strong growth was partially due to softness in the bulk sodium bicarbonate business in Q4 2023.
Gross margin increased 10 basis points to 44.7%. Adjusted gross margin was 44.6%, flat to Q4 2023 with improved productivity, the benefit of higher volumes and mix and higher margin acquisitions being offset by the impact of higher manufacturing costs.
Marketing expense was $207.9 million, an $11.1 million decrease versus year ago due to quarterly phasing in 2023. Consistent with prior years, we made incremental investments behind our brands which drove consumption and share growth.
Selling, general, and administrative expense (SG&A) was $243.3 million, including $3.1 million of charges related to restricted stock that was issued for the 2022 HERO acquisition. Adjusted SG&A was $240.2 million1 or 15.2% of net sales, a 40 basis point decrease versus prior year.
Income from Operations was $256.7 million, an increase of 18.8% driven by higher sales and gross margin.
Other Expense decreased $17.3 million inclusive of lower interest expense and higher interest income.
The effective tax rate increased to 25.2% compared to 21.3% in Q4 2023. On an adjusted basis the tax rate was 24.9% compared to a rate of 20.5% in Q4 20231. The rate is higher primarily attributable to onetime non-recurring tax items.
Operating Cash Flow
For the full year 2024, cash from operations was $1.16 billion, an increase of $125.6 million due to higher cash earnings and improvements in working capital. Capital expenditures for the full year were $179.8 million, a $43.7 million decrease from the prior year as we completed major capacity expansion projects.
At December 31, 2024, total debt was $2.2 billion and cash on hand was $964.1 million, which provides liquidity and flexibility as we continue to pursue acquisitions.
4% Dividend Increase
Consistent with the Company’s capital allocation strategy, the Company’s Board of Directors declared a 4% increase in the quarterly dividend from $0.28375 to $0.295 per share, equivalent to an annual dividend of $1.18 per share. This raises the annual dividend payout from $277 million to approximately $287 million. The quarterly dividend will be payable March 3rd, 2025, to stockholders of record at the close of business on February 14th, 2025. This is the 29th consecutive year in which the Company has increased the dividend. The Company has paid a consecutive quarterly dividend for 124 years.
Mr. Farrell commented, “Our dividend increase reflects the Company’s desire for stockholders to benefit from our strong cash generation and reflects our confidence in continuing our strong performance. We once again expect strong cash generation in 2025. Our robust cash flow enables us to return cash to our stockholders while maintaining significant financial flexibility to aggressively pursue acquisitions and invest in our business.”
2025 New Products
Mr. Farrell commented, “Product innovation continues to be a big driver of our success and we are excited about our new product launches. In 2025, we expect new product launches to continue to drive a significant increase in net sales as we lead with innovation in a number of key categories.”
ARM & HAMMER™ Laundry launched POWER SHEETS™ Laundry Detergent online in August 2023 and was the first major brand in the US to offer a detergent sheet. POWER SHEETS™ quickly became a top 2 selling brand in the Detergent Sheets Category on Amazon in 2024 and is expanding nationally in 2025. This innovative laundry solution is effective, convenient, and eliminates plastic waste. In 2025, ARM & HAMMER POWER SHEETS™ is launching a dermatologist tested, FRAGRANCE-FREE variant that is free of dyes and perfumes.
ARM & HAMMER™ Laundry Deep Clean™ Liquid and Deep Clean™ Unit Dose Laundry Detergent, our most powerful ARM & HAMMER™ formula, is launching FREE & CLEAR, which has zero dyes, parabens, phosphates and fragrance. It is Skin Safe™ certified, and dermatologist tested, delivering trusted ARM & HAMMER™ cleaning performance in a safe and gentle formulation.
BATISTE™, the global leader in dry shampoo, is launching an innovative new formula, BATISTE Light, to bring new users into the category. This lightweight dry shampoo leaves behind no residue for an invisible finish, a lighter feel on hair, and has soft, subtle scents.
HERO™, the #1 acne brand in the U.S., is entering the growing Body Care segment in 2025 with Mighty Patch Body. This new extra-large hydrocolloid patch addresses breakouts in areas such as the chest, back, and butt and is made with unique notches to help adhere to curved parts of the body.
VITAFUSION™ is focused on core multi vitamins in 2025 with a renovation across the line to improve the taste profile and consumer experience. In addition, VITAFUSION is launching Power Plus, a new line of differentiated multivitamins with 100% Daily Value of 10 nutrients and added ingredients such as choline and CoQ10. VITAFUSION is also expanding its assortment of sugar free options.
Outlook for 2025
Mr. Farrell stated, “We gained share in growing categories in 2024, driven by focused innovation, strong marketing, and effective promotional spending. The strength of our brands and the investments we have made give us confidence as we enter 2025. We remain focused on offering high quality products to consumers at the right value. This outlook reflects strong operating fundamentals including organic sales growth, volume growth, margin expansion and operating income growth.
“In 2025 we expect reported sales growth of approximately of 2.5% to 3.5% and volume driven organic sales growth of approximately 3-4%.¹ The sales outlook reflects a continued cautious view of the US consumer as inflationary pressures are unchanged and interest rates remain high. Full year gross margin is expected to expand approximately 25 basis points versus 2024 as we expect persistently elevated input costs to be offset by favorable mix, higher volume and productivity. Marketing as a percentage of sales is expected to exceed 11% of sales.
“We expect SG&A as a percentage of sales to be lower versus 2024 while making investments for our future, especially ecommerce and International. Other expense for 2025 is expected to be approximately $50 million, compared to Adjusted Other expense of $55.6 million in 2024. Our tax rate is expected to be approximately 23% (adjusted tax rate of 22.7% in 2024).
“We expect full year reported EPS to increase approximately 53% to 55%. Our Adjusted EPS expectation for 2025 is 7% to 8% growth, inclusive of a 1% EPS drag related to currency. The Adjusted EPS range excludes a 1% impact from expenses related to an ERP upgrade project that will take place during 2025. The Adjusted EPS expectation also excludes the impact of changes in existing or introduction of new tariffs.
“Cash flow from operations is expected to be approximately $1.15 billion in line with our strong cash generation in 2024. We expect 2025 capital expenditures of approximately $130 million as we return to historical levels (approximately 2% of sales). We will pursue accretive acquisitions that meet our strict criteria, with an emphasis on fast-moving consumable products, similar to our last 3 acquisitions (ZICAM, THERABREATH, and HERO).
“We expect EPS growth to be weighted towards the second half of 2025 as marketing spend is weighted to the first half in support of our innovation.
“For Q1, we expect reported sales growth of approximately 1% and organic sales growth of approximately 2%¹, flat gross margin and a higher quarterly tax rate. As a result, we expect Adjusted EPS of $0.90 per share, a decrease of 6% versus last year’s adjusted Q1 EPS.” ¹
¹ Organic Sales, Adjusted Gross Margin, Adjusted SG&A, Adjusted Income from Operations, Adjusted Other Income (Expense), Adjusted Tax Rate and Adjusted EPS are non-GAAP measures. See non-GAAP reconciliations included at the end of this release.
Church & Dwight has a heritage of commitment to people and the planet. In the early 1900’s, we began using recycled paperboard for all packaging of household products. Today, virtually all our paperboard packaging is from certified, sustainable sources. In 1970, the ARM & HAMMER brand introduced the first nationally distributed, phosphate-free detergent. That same year, Church & Dwight was honored to be the sole corporate sponsor of the first annual Earth Day. In 2023, our continued progress earned continued public recognition, including the Newsweek Magazine’s Americas Most Responsible and America’s Greenest Companies lists, the EPA’s Green Power Partnership-Top 100 list, the 2023 Wall Street Journal Management Top 250 List, the 2022/2023 Forbes Magazine: Americas Best Midsize Employer Award and the FTSE4Good Index Series, amongst others.
For more information, see the Church & Dwight 2023 Sustainability Report at: https://churchdwight.com/responsibility/
