Church & Dwight Shares Lost 8% Since Disappointing Q2 Earnings Announcement

Church & Dwight Co., Inc. (NYSE:CHD) shares dropped nearly 8% since the Q2 earnings announcement last week. EPS came in at $0.76, better than the Street estimate of $0.72. Revenue was $1.33 billion, compared to the Street estimate of $1.34 billion.

Analysts at Deutsche Bank provided their key takeaways from the results. Although they acknowledge a challenging operating environment amidst cost inflation and broad-based supply chain bottlenecks, the analysts noted the results and updated guidance were disappointing.

While the EPS came in better than expected, the analysts mentioned that this could be primarily attributed to significantly lower marketing spend (approximately 18% lower than consensus), as company organic growth of 3.4% missed the consensus estimate of 3.7%.

More critically, higher costs and lost revenue from demand headwinds in discretionary categories (Waterpik, Flawless) caused the company to materially reduce its full-year EPS estimates for 2022 to around $3.02 from the low-end of $3.14-$3.26 prior.

The analysts lowered their price target on the company’s shares to $93 from $99, while maintaining their hold rating.