CHURCH & DWIGHT CO INC /DE/ (CHD)

Overview

We develop, manufacture and market a broad range of consumer household and personal care products and specialty products focused on animal nutrition, chemicals and commercial products. Our well-recognized brands include ARM & HAMMER® baking soda, cat litter, laundry detergent, carpet deodorizer and other baking soda-based products; OXICLEAN® stain removers, cleaning solutions, laundry detergents and bleach alternatives; BATISTE® dry shampoo; WATERPIK® water flossers; THERABREATH® oral care products; HERO® acne treatment products; TOUCHLAND® hand sanitizers; TROJAN® condoms, lubricants and vibrators; FIRST RESPONSE® home pregnancy and ovulation test kits; NAIR® depilatories; ORAJEL® oral analgesic; XTRA® laundry detergent; ZICAM® cold shortening and relief products and MISS MOUTH'S® stain removers. Seven of those brands are designated as "power brands" because they compete in large categories, and we believe they have the potential for significant global expansion. Those seven brands are ARM & HAMMER®; OXICLEAN®; BATISTE®; WATERPIK®; THERABREATH®; HERO® and TOUCHLAND® and represent approximately 70% of our net sales and profits.

We sell our consumer products under a variety of brands through a broad distribution platform that includes supermarkets, mass merchandisers, wholesale clubs, drugstores, convenience stores, home stores, dollar and other discount stores, pet and other specialty stores and websites and other e-commerce channels, all of which sell our products to consumers. We sell our specialty products to industrial customers, livestock producers and through distributors.

We operate in three principal segments: Consumer Domestic, Consumer International, and our Specialty Products Division (“SPD”).

Recent Developments

Global Economic Conditions and Trade Policies

We have experienced higher manufacturing costs and economic uncertainty due to changes in U.S. trade policies including ongoing reviews and modifications to tariffs and other U.S. trade measures. We continue to evaluate these evolving developments and have taken actions to mitigate their impact on our business, including exiting certain business lines, shifting production and relocating manufacturing operations, finding alternative sources of supply, selectively increasing prices, adjusting inventories, seeking exemptions with respect to tariffs, and most notably ceasing the import of substantially all Waterpik flossers and certain other products from China into the U.S. While the tariffs remain fluid, we are focused on managing these challenges. We believe our existing tariff cost exposure will be mitigated through the above-mentioned actions, future additional supply chain efforts and surgical pricing.

Middle East Conflict

The ongoing geopolitical conflict in the Middle East has disrupted global shipping routes, including the Strait of Hormuz and surrounding waterways, resulting in incremental inflationary pressure on certain commodities and transportation costs, as well as increased volatility in logistics and supply chain planning. While the situation remains fluid and unpredictable, we have implemented mitigation measures, including supplier diversification, alternative routing and incremental productivity programs. Based on current conditions, we believe we can mitigate a significant portion of these transitory impacts in 2026.

U.S. Tariffs

On February 20, 2026, the U.S. Supreme Court ruled that the tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful but did not establish a process for issuing refunds. U.S. Customs and Border Protection (“CBP”) launched its program to administer phase I and phase II refund requests in April 2026 and June 2026, respectively. A process to administer refund requests for phase III has not been established. We have paid approximately $23.0 in IEEPA tariffs, and have not yet recognized any recovery in our consolidated financial statements as of June 30, 2026. However, we are entitled to approximately $15.0 in phase II refunds that we expect to receive in the second half of 2026 with the remaining amount being phase III. The Company will invest these proceeds in consumer-facing activities and to offset inflationary pressures.

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Miss Mouth's Acquisition

On May 28, 2026, we completed the acquisition of the Miss Mouth's Messy Eater® brand ("Miss Mouth's"). We paid $300.0 cash at closing and deferred payment of $25.0 of the purchase price with $15.0 expected to be paid later in 2026 related to required post-closing activities of the Seller. The remaining amount relates to certain indemnity obligations with, $4.0 payable in the second quarter of 2029, and $6.0 payable in the second quarter of 2031. The Miss Mouth's acquisition was financed with cash on hand and commercial paper borrowings and is managed in the Consumer Domestic segment. Miss Mouth's annual net sales for the year ended December 31, 2025 were approximately $80.0.

Other

For additional discussion, please refer to Item 1A, Risk Factors, and Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K.

Results of Operations

Consolidated results

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Net Sales

Net sales for the quarter ended June 30, 2026 were $1,530.0, an increase of $23.7 or 1.6% as compared to the same period in 2025. Net sales for the six months ended June 30, 2026 were $2,999.3, an increase of $25.9 or 0.9% over the comparable six month period of 2025. The components of the net sales increase are as follows:

(1)
For the three and six months ended June 30, 2026, the volume change reflects increased product unit sales in all three segments.

(2)
For the three and six months ended June 30, 2026, price/mix was favorable in all three segments.

(3)
In the fourth quarter of 2025, we divested the VMS business. In the second quarter of 2025, we announced that we were exiting the Flawless, Spinbrush, and Waterpik showerhead businesses. The business exits were completed by the end of 2025.

(4)
In the second quarter of 2026, we completed the acquisition of Miss Mouth's. In the third quarter of 2025, we completed the acquisition of Touchland.

Gross Profit / Gross Margin

Our gross profit was $693.9 for the three months ended June 30, 2026, a $46.9 increase as compared to the same period in 2025. Gross margin increased 240 basis points (“bps”) in the second quarter of 2026 compared to the same period in 2025. Excluding one-time costs associated with exiting the Flawless, Spinbrush, and Waterpik showerheads businesses in the prior year, gross margin increased 40 bps which includes favorable volume and mix of 180 bps, the impact of productivity programs of 150 bps, the mix benefits of acquisitions combined with the favorable impact of business exits of 110 bps, partially offset by the impact of higher manufacturing and logistics costs of 400 bps (including labor, commodities, tariffs and transportation costs).

Gross profit was $1,375.3 for the six months ended June 30, 2026, a $68.7 increase compared to the same period in 2025. Gross margin increased 200 bps in the first six months of 2026 compared to the same period in 2025. Excluding one-time costs associated with exiting the Flawless, Spinbrush, and Waterpik showerheads businesses in the prior year, gross margin increased 100 bps which includes the impact of productivity programs of 160 bps, favorable volume and mix of 120 bps, benefits of the Touchland acquisition combined with the favorable impact of business exits of 110 bps, partially offset by the impact of higher manufacturing and logistics costs of 290 bps (including labor, commodities, tariffs and transportation costs).

Operating Expenses

Marketing expenses for the three months ended June 30, 2026 were $165.3, an increase of $8.2 or 5.2% as compared to the same period in 2025. Marketing expenses as a percentage of net sales in the second quarter of 2026 increased by 40 bps to 10.8% compared to 10.4% in the same period in 2025 due to 60 bps on higher expense from increased investment in our brands and new products, supporting our innovation initiatives and organic growth, offset by 20 bps of leverage on higher net sales. Marketing expenses for the six months ended June 30, 2026 were $304.7, an increase of $11.0 or 3.7% as compared to the same period in 2025. Marketing expenses as a percentage of net sales for the first six months of 2026 increased by 30 bps to 10.2% as compared to 9.9% in the same period in 2025 due to 40 bps on higher expense from increased investment in our brands and new products, supporting our innovation initiatives and organic growth, offset by 10 bps of leverage on higher net sales.

SG&A expenses were $252.2 in the second quarter of 2026, an increase of $24.0 or 10.5% as compared to the same period in 2025. SG&A as a percentage of net sales increased 140 bps to 16.5% in the second quarter of 2026 as compared to 15.1% in the same period in 2025. The increase reflects 160 bps of acquisition-related expenses from the Touchland and Miss Mouth's acquisitions and focused investments in new growth initiatives, e-commerce and our international business, offset by 20 bps of leverage associated with higher sales. SG&A expenses for the first six months of 2026 were $503.2, an increase of $47.3 or 10.4% as compared to the same period in 2025. SG&A as a percentage of net sales increased 150 bps to 16.8% in the first six months of 2026 compared to 15.3% in 2025. The increase reflects 160 bps of acquisition-related expenses from the Touchland and Miss Mouth's acquisitions and focused investments in new growth initiatives, e-commerce and our international business, offset by 10 bps of leverage associated with higher sales.

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Inc

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements.

OVERVIEW

Our Business

We develop, manufacture and market a broad range of consumer household, personal care and specialty products. Our well-recognized brands include ARM & HAMMER® baking soda, cat litter, laundry detergent, carpet deodorizer and other baking soda-based products; OXICLEAN® stain removers, cleaning solutions, laundry detergents and bleach alternatives; TOUCHLAND® hand sanitizers; BATISTE® dry shampoo; WATERPIK® water flossers; THERABREATH® oral care products; HERO® acne treatment products; TROJAN condoms, lubricants and vibrators; FIRST RESPONSE home pregnancy and ovulation test kits; NAIR depilatories; ORAJEL oral analgesic; XTRA laundry detergent; and ZICAM cold shortening and relief products. Seven of those brands are designated as "power brands" because they compete in large categories, and we believe they have the potential for significant global expansion. Those seven brands are ARM & HAMMER®; OXICLEAN®; TOUCHLAND®; BATISTE®; WATERPIK®; THERABREATH®; and HERO® and represent approximately 70% of our net sales and profits. Prior to the sale of our VITAFUSION® and L'IL CRITTERS® (“VMS”) business at the end of 2025, we included VMS as an eighth “power brand.”

We sell our consumer products under a variety of brands through a broad distribution platform that includes supermarkets, mass merchandisers, wholesale clubs, drugstores, convenience stores, home stores, dollar, pet and other specialty stores and websites and other e-commerce channels, all of which sell the products to consumers. We sell our specialty products to industrial and commercial customers, livestock producers and through distributors.

We operate our business in three segments: Consumer Domestic, Consumer International and the Specialty Products Division (“SPD”). The segments are based on differences in the nature of products sold and management organizational structures. In 2025, the Consumer Domestic, Consumer International and SPD segments represented approximately 77%, 18% and 5%, respectively, of our consolidated net sales.

Recent Developments

Global Economic Conditions and Trade Policies

We have experienced increased commodity cost volatility and economic uncertainty primarily due to changes in U.S. trade policies including ongoing reviews and modifications to tariffs and other U.S. trade measures. We continue to evaluate these evolving developments and have taken actions to mitigate their impact on our business, including taking strategic actions for certain business lines (see Strategic Business Decisions below), shifting production and relocating manufacturing operations, finding alternative sources of supply, most notably ceasing the import of substantially all Waterpik flossers and other products from China into the U.S., potentially increasing prices, adjusting inventories, lobbying and seeking exemptions with respect to tariffs. While the tariffs remain fluid, we are focused on managing these challenges. We believe our existing tariff cost exposure will be mitigated through the above-mentioned actions, future additional supply chain efforts and surgical pricing.

Strategic Business Decisions

On May 1, 2025, we announced that we would exit the Flawless, Spinbrush and Waterpik showerhead businesses. We exited these businesses by the end of 2025. These businesses generated approximately $118.0 of annual Net Sales in 2025. We recorded a pre-tax charge of $45.6 (post-tax of $34.5) in 2025 as a direct result of these actions, of which $25.0 was recorded in Cost of sales and $20.6 was recorded in SG&A. The charge was primarily recorded in the second quarter to the Consumer Domestic segment and was comprised of non-cash charges related to impairments of intangible and fixed assets, as well as charges related to inventory valuation. A reduction to the second quarter charge was recorded in the fourth quarter related to final costs to exit the Spinbrush business.

On December 9, 2025, the Company announced a definitive agreement to sell the VitaFusion and L’il Critters brands to Piping Rock Health Products, Inc. This agreement includes the VitaFusion and L’il Critters brands, relevant trademarks and licenses, and the Company's former manufacturing and distribution facilities in Vancouver and Ridgefield, Washington. The transaction closed on December 31, 2025.

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CHURCH & DWIGHT CO., INC AND SUBSIDIARIES

(Dollars in millions, except share and per share data)

The VMS brands represented less than 5% of our 2025 net sales. As a result of this transaction, we incurred a one-time, pre-tax charge of $58.5 (post-tax of $45.6) in the fourth quarter of 2025 which is included in in Other income (expense), net in the Consolidated Statements of Income.

The decision to reposition our portfolio with these business exits enables us to devote greater focus to our portfolio’s faster growing value and premium product lines.

Share Repurchases

In May 2025, the Company entered into an accelerated share repurchase ("ASR") contract with a commercial bank to purchase Common Stock. The Company paid $300.0 to the bank, inclusive of fees, and received 2.8 million shares in May 2025 and 0.3 million shares in August 2025 at an average total share price of $95.71. The Company purchased all 3.1 million shares under the evergreen share repurchase program and used cash on hand to fund the purchase price.

In August and September 2025, the Company executed open market purchases of 3.2 million shares for $300.0, inclusive of fees, of which $170.0 was purchased under the evergreen share repurchase program and $130.0 was purchased under the 2021 Share Repurchase Program (as defined below). The shares were purchased at an average share price of $92.81 and the Company used cash on hand to fund the open market purchases.

In November and December 2025, the Company executed open market purchases of 3.6 million shares for $300.0, inclusive of fees, of which all 3.6 million shares were purchased under the 2021 Share Repurchase Program. The shares were purchased at an average share price of $83.59 and the Company used cash on hand to fund the open market purchases.

One Big Beautiful Bill Act

On July 4, 2025, President Trump signed into law the legislation formally titled "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” and commonly referred to as the One Big Beautiful Bill Act (“OBBBA”). The legislation includes several provisions that may impact the timing and magnitude of certain tax deductions. Key provisions include the permanent extension of several key elements of the 2017 Tax Cuts and Jobs Act, including 100% bonus depreciation and an immediate tax deduction for domestic research costs. The tax provisions in OBBBA did not have a material impact on our financial position and results of operations, and had a minimal benefit to operating cash flows.

Touchland Acquisition

On July 16, 2025, we completed the acquisition of Touchland Holding Corp ("Touchland"), the developer of TOUCHLAND® hand sanitizer products (the "Touchland Acquisition"). We paid $656.0, net of cash acquired, at closing and entered an agreement to pay an additional amount based on 2025 net sales thresholds which will result in a cash payment of $159.0 to be paid in the first half of 2026. In addition, the Company granted rights to Touchland’s founder to receive shares of our Common Stock valued at $50.0, with 50% of such shares vesting at each of the first and second year anniversaries of the closing. The value of Common Stock received by Touchland's founder will be recognized as a compensation expense ratably over the two-year vesting period if the individual continues to be employed by the Company. Payment of a $5.0 portion of the purchase price was deferred related to certain indemnification obligations provided by Touchland’s equityholders, which amount, to the extent not used in satisfaction of such indemnity obligations, is payable three years from the closing. The Touchland Acquisition was financed with cash on hand and is managed in the Consumer Domestic and Consumer International segments. Touchland’s annual net sales for the year ended December 31, 2024 were approximately $115.0 million.

New Credit Agreement

On July 17, 2025, the Company entered into a new unsecured revolving Credit Agreement (the “Credit Agreement”). The Credit Agreement replaced the Company’s prior $1,500.0 unsecured revolving credit facility that was entered into on June 16, 2022. The aggregate commitments of the lenders under the Credit Agreement, as of the effective date, are $2,000.0, with an option to increase such commitments to $2,750.0 pursuant to the terms therein. The revolving credit facility matures on July 17, 2030, unless extended. The terms of the Credit Agreement are substantially the same as the terms for the credit facility entered into on June 16, 2022.

Dividend Increase

On January 28, 2026, the Board declared a 4.2% increase in the regular quarterly dividend from $0.295 to $0.3075 per share (equivalent to an annual dividend of $1.23 per share) payable to stockholders of record as of February 13, 2026. The increase raises the annualized dividend payout from $287.0 to approximately $291.0 on an annualized basis.

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CHURCH & DWIGHT CO., INC AND SUBSIDIARIES

(Dollars in millions, except share and per share data)

2025 Financial Highlights

Key 2025 financial results include:

•
Net sales for the year ended December 31, 2025 grew 1.6% over 2024, with gains in Consumer Domestic and Consumer International, partially offset by lower sales in SPD due to divestitures. The 2025 gains include the benefit of recent acquisitions in Consumer Domestic and Consumer International, partially offset by the exit of product lines in all three segments, a decline in vitamin sales in Consumer Domestic and unfavorable foreign currency exchange rates in Consumer International. Excluding these items, Consumer International and SPD experienced favorable volumes and pricing/product mix, partially offset by lower price/mix in Consumer Domestic.

•
Gross margin decreased 100 basis points (“bps”) to 44.7% in 2025 from 45.7% in 2024, which includes costs associated with exiting the Flawless, Spinbrush, and Waterpik showerheads businesses of 50 bps and an approximate 50 basis point benefit from tariff refunds in the prior year. Excluding these items, gross margin was flat year over year with higher manufacturing costs including tariffs (net of mitigation actions) as well as labor and higher commodities of 180 bps offset by the impact of productivity programs of 160 bps, and benefits from the Touchland Acquisition of 20 bps.

•
Operating margin increased 410 basis points to 17.4% in 2025 from 13.3% in 2024.

o
2025 results include non-cash charges associated with exiting the Flawless, Spinbrush, and Waterpik showerheads businesses of $45.6. In connection with the Touchland Acquisition, the Company recorded earnout costs of $19.0 and restricted stock amortization expense of $11.5 within SG&A expenses. We recorded an additional $5.8 of restricted stock amortization associated with the Hero Acquisition and system integration costs of $8.2 in SG&A Expenses.

o
The 2024 operating margin includes a non-cash charge of $357.1, related to the impairment of the VITAFUSION and L'IL CRITTERS indefinite-lived trade name as well as a definite-lived customer relationship intangible asset and PP&E specific to the VMS business.

o
Excluding these charges, operating margin was flat year over year.

•
We reported diluted net earnings per share in 2025 of $3.02, an increase of approximately 27.4% from 2024 diluted net earnings per share of $2.37.

o
Earnings per share in 2025 includes charges of $0.18 for the

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