Factors To Know Ahead Of Church & Dwight's (CHD) Q4 Earnings

Church & Dwight Co., Inc. (NYSE:CHD) is scheduled to report fourth-quarter 2019 numbers on Jan 31. We note that the company has trailing four-quarter positive earnings surprise of 5.5%, on average. Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Which way are Estimates Headed?

The Zacks Consensus Estimate for fourth-quarter 2019 earnings is pegged at 55 cents per share, which suggests a decline of 3.5% from the year-ago quarter’s reported figure. The projection has remained unchanged in the past 30 days. The consensus mark for revenues is pegged at $1,142 million, which indicates an increase of 6.3% from the prior-year quarter’s figure.

For 2019, the Zacks Consensus Estimate is pegged at $2.48 per share that suggests a rise of 9.3% from the year-ago figure. The consensus mark for 2019 sales is pegged at $4,356 million.

Church & Dwight Co., Inc. Price and EPS Surprise

Church & Dwight Co., Inc. price-eps-surprise | Church & Dwight Co., Inc. Quote

Factors at Play

Church & Dwight has been focused on innovation, product launches and investments. The company’s top line has been benefitting from consistent sales growth in household and personal care products along with market share gains. Moreover, WATERPIK and FLAWLESS buyouts have been aiding the company’s performance. Also, strategic pricing efforts and favorable product mix are boosting organic sales.

Additionally, in the international business, brands like BATISTE, ARM & HAMMER, VITAFUSION, STERIMAR and FEMFRESH have been driving growth.

In the last earnings call, management guided for the company’s revenue growth of approximately 6% and organic sales growth of 3% for the fourth quarter. Further, Church & Dwight anticipates sales growth of 5% on a reported basis and 4% on an organic basis for 2019.

Apart from this, management expects improvement in gross margin for the fourth quarter. However, the company anticipates increase in marketing costs for the quarter under review. Further, SG&A expenses are likely to have been higher due to FLAWLESS buyout and reinvestment in the business. Adjusted earnings are projected at 54 cents per share for the fourth quarter, excluding the FLAWLESS acquisition related adjustment.

For 2019, the company anticipates an improvement of 100 basis points (bps) in its gross margin. Excluding the FLAWLESS acquisition accounting, gross margin is likely to have increased 60 bps. However, management expects a rise in marketing expenses for 2019. Earnings per share for 2019 are envisioned at $2.47 per share.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Church & Dwight this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Church & Dwight carries a Zacks Rank #3 and has an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Post Holdings, Inc. (NYSE:POST) presently has an Earnings ESP of +0.65% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Campbell Soup Company (NYSE:CPB) presently has an Earnings ESP of +5.43% and a Zacks Rank #2.

General Mills, Inc. (NYSE:GIS) currently has an Earnings ESP of +1.11% and a Zacks Rank #2.



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