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Q1 Beat and Improved Outlook Could Boost Church & Dwight Stock


May. 2 2019, Published 9:33 a.m. ET

Upbeat guidance

Church & Dwight (CHD) has impressed with its better-than-expected first-quarter results and margin expansion. Its organic sales have increased by more than 4% in the past four quarters. Meanwhile, its pricing and product mix have improved in the past three quarters.

Church & Dwight has raised its full-year sales outlook and expects its net sales to increase 5%–6% in 2019. Previously, its management expected its net sales to increase 3.5%–4.0%. Acquisitions and innovations are expected to drive the company’s net sales growth. Meanwhile, improvements in its base business driven by higher pricing, a favorable product mix, and improved volumes are likely to support its sales.

Church & Dwight’s margins are likely to expand, which is positive. Improved organic sales and productivity savings are expected to more than offset its cost headwinds and drive its margins.

Church & Dwight’s strong quarterly performance and improved sales and margin outlooks are expected to support its stock.

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Stock performance

Church & Dwight stock is up 12.0% on a YTD (year-to-date) basis as of May 1. In comparison, the stocks of the company’s peers are also up on a YTD basis thanks to the improvements in their base businesses. Procter & Gamble (PG), Colgate-Palmolive (CL), and Kimberly-Clark (KMB) stocks are up 14.2%, 19.8%, and 10.15%, respectively.

However, the Clorox Company (CLX) stock is down 3.9% so far this year, reflecting weak sales guidance and lower-than-expected fiscal 2019 third-quarter results.


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