All You Should Know Before Church & Dwight (CHD) Q3 Earnings

Zacks Equity Research
·4-min read

Church & Dwight Co., Inc. CHD is likely to report an increase in the top line when it releases third-quarter 2020 numbers on Oct 29. The Zacks Consensus Estimate for earnings has gone up a cent in the past 30 days to 67 cents per share. This suggests a 1.5% increase from the year-ago period’s reported figure. Notably, Church & Dwight delivered an earnings surprise of 22.2% in the last reported quarter. Also, the company has a trailing four-quarter earnings surprise of 9.9%, on average.

The Zacks Consensus Estimate for revenues is pegged at $1,200 million, indicating an increase of about 10% from the prior-year quarter’s reported figure.

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

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

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

Key Factors to Note

The company has been gaining from rising consumer demand for its products amid the pandemic, especially household cleaning products, as consumers are focusing on increased cleanliness. Also, the demand for brands like FLAWLESS is benefiting from elevated at-home grooming sessions. Results in the last reported quarter gained from the robust household and personal care businesses owing to consumers’ shifted preference for essential products amid the coronavirus outbreak. In this regard, consumption of products like gummy vitamins, women’s hair removal, cleaners and baking soda has increased.

Also, increased social-distancing trends have been spurring online sales. Per the last earnings call, management expects solid online sales in the second half of 2020. These factors raise optimism for the company’s upcoming performance. Apart from this, Church & Dwight’s regular innovation has been a driver. Toward this end, the company recently launched ARM & HAMMER laundry detergent called CLEAN & SIMPLE. Further, its BATISTE brand, from the personal care unit, launched a line of waterless cleansing foam for normal, dry and curly hair. Additionally, the company introduced NU RAZOR by FLAWLESS, which is a waterless whole-body hair removal product for women.

However, Church & Dwight is grappling with a rise in expenses, such as SG&A costs. The company witnessed escalated manufacturing costs due to COVID-19 supply-chain expenses in the last reported quarter. Management expects a decline in gross margin in the second half of 2020 due to new product promotional support, FLAWLESS accounting effect, increased tariffs on WATERPIK and additional investments in manufacturing and distribution capacity.

What the Zacks Model Unveils

Our proven model predicts 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Church & Dwight currently has a Zacks Rank #3 and an Earnings ESP of +1.80%.

Other 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 this season.

Nu Skin NUS has an Earnings ESP of +3.54% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Newell Brands NWL has an Earnings ESP of +0.33% and a Zacks Rank #2.

Estee Lauder EL has an Earnings ESP of +4.57% and a Zacks Rank #3.

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