Why Church & Dwight’s Earnings Could Be Better Than Peers’?

Expected sales growth better than peers’

Analysts expect Church & Dwight (CHD) to report strong sales and earnings growth in the upcoming quarter. Church & Dwight is expected to announce its 1Q18 results on May 3, 2018, and analysts expect the company’s top line to rise 11.5% YoY (year-over-year), more than peers’.

Procter & Gamble’s (PG) net sales rose 4.3% YoY during the recently concluded quarter, as price investments partially offset improved volumes. Analysts expect Colgate-Palmolive’s (CL) top line to grow 6.6% in 1Q18, and Kimberly-Clark (KMB) and Clorox (CLX) are expected to mark low-single-digit sales growth.

Why Church & Dwight’s Earnings Could Be Better Than Peers’?

Household and personal care product manufacturers’ sales are likely to benefit from improved volumes led by innovation. However, retailers’ decreasing inventory and price competition is expected to remain a drag. Church & Dwight’s organic sales are expected to grow 2% as improved volumes are expected to be partially offset by lower pricing. However, the company’s net sales are projected rise 11%, driven by acquisitions.

CHD’s earnings to grow by double digits

Analysts expect Church & Dwight’s 1Q18 adjusted earnings to come in at $0.61 per share, reflecting a YoY increase of 17.3%. The healthy bottom-line growth projection reflects improved sales and strong productivity savings, which are likely to offset input cost inflation and lower pricing.

The company’s peers’ earnings are also expected to improve YoY, thanks to cost-saving initiatives and lower tax. However, their earnings growth rates are likely to remain lower than Church & Dwight’s.