Church & Dwight (NYSE:CHD) reported second-quarter results that exceeded its prior outlook, driven by broad-based volume growth, market-share gains and contributions from innovation. The company raised its full-year sales, earnings and cash-flow outlook despite what management described as a dynamic operating environment marked by inflation, tariffs and transportation costs.
Net sales increased 1.6% in the second quarter, while organic sales rose 5.8%, ahead of the company’s approximately 3% forecast. Organic growth was led by 4.3% volume growth and 1.5% from price and mix. Adjusted earnings per share were $0.89, above the company’s $0.88 outlook, while adjusted gross margin increased 40 basis points to 45.4%.
Brand Performance and Innovation
Domestic organic sales rose 5.1%, supported by growth in both household and personal-care products. Dierker highlighted TheraBreath mouthwash and toothpaste, Hero acne products, ARM & HAMMER cat litter and ZICAM as key contributors.
ARM & HAMMER cat litter consumption increased 7.5% during the quarter, and market share rose 0.8 points to 24.5%. The company said its recently launched Dual Defense with Microban clumping litter continued to perform well. ARM & HAMMER laundry detergent consumption and category consumption each grew about 1%, despite heightened promotional activity among competitors and lower promotional spending by the company.
TheraBreath gained 4.5 share points in mouthwash, reaching a 25.3% share and further strengthening its position as the No. 2 brand in total mouthwash, according to Dierker. The TheraBreath toothpaste launch reached a 1-point share in total toothpaste after entering brick-and-mortar stores more fully in recent months.
Dierker said TheraBreath toothpaste was meeting or slightly exceeding expectations, aided by the performance of the mouthwash brand. He also pointed to low household penetration for TheraBreath—14%, compared with 65% for the mouthwash category—as an opportunity for additional growth.
Hero’s consumption outpaced the acne patch category, while the company began introducing a cleanser product. Dierker said facial cleansers represent a $650 million category and approximately 30% of the acne category. Hero’s household penetration was 10%, versus 30% for the category.
New product launches are expected to account for about half of Church & Dwight’s organic growth in 2026, management said. Global e-commerce sales grew 22.7% in the quarter and represented 25.5% of total consumer sales.
Miss Mouth Acquisition and International Growth
Church & Dwight completed its acquisition of Miss Mouth in June. The company described the brand as the No. 1 stain remover on Amazon and said consumption grew more than 50% in the second quarter, with market share increasing by nearly 3.5 points.
Dierker said the company sees substantial distribution and household-penetration opportunities for the brand. Miss Mouth’s household penetration is about 2.5%, compared with 50% for the stain-remover category, while its all-commodity-volume distribution is 35%, compared with 80% for the category.
“We don’t think we’ve been more excited about an acquisition in a long time,” Dierker said during the question-and-answer session, while adding that it was too early to provide detailed long-term growth targets. He said the business is being integrated into the company’s fabric-care operations and that it is already gaining traction with retailers.
International organic sales increased 9.1%, supported by volume growth and favorable price and mix. Chief Financial Officer Lee McChesney said growth was broad-based across Europe, Asia and Latin America. Hero, TheraBreath and Batiste were among the brands supporting international performance.
Dierker also said Church & Dwight has reviewed roughly 100 potential international acquisition opportunities over the past six to 12 months. The company recently shifted responsibility for identifying potential transactions more directly to regional management teams, with corporate M&A staff providing support.
Margins, Investments and Updated Outlook
McChesney said adjusted gross margin benefited from 150 basis points of productivity programs, 110 basis points from higher-margin acquisitions and portfolio actions, and 180 basis points from volume, price and mix. Those gains were partly offset by 400 basis points of inflation, tariffs and transportation costs.
Marketing expense increased $8.2 million, or 40 basis points from the prior year, to $165 million. The company said it intends to reinvest stronger sales and margin performance in brands, innovation and consumer-facing activities. Dierker said the company is also advancing investments in artificial intelligence initiatives intended to help it scale more quickly.
Cash from operations totaled $462 million in the first half, up 10.8% from a year earlier. Capital expenditures were $61.8 million, and Church & Dwight maintained its full-year capital-spending expectation of roughly $130 million.
- Full-year organic sales growth is now expected to be approximately 4% to 5%, up from 3% to 4%.
- Adjusted gross margin is expected to expand by approximately 100 to 120 basis points.
- Adjusted EPS growth is now projected at 6% to 8%, compared with the previous 5% to 8% outlook.
- Cash from operations is expected to reach approximately $1.175 billion, up from $1.15 billion.
- Third-quarter organic sales growth is forecast at approximately 3%, with adjusted EPS of about $0.89.
The company’s outlook includes approximately $30 million in raw-material, transportation and other cost pressures related to the conflict in the Middle East, assuming crude oil prices of about $90 per barrel. McChesney said Church & Dwight expects to fully mitigate that pressure during 2026 through increased productivity. The company also expects about $15 million in phase II tariff refund benefits during the second half, which it plans to invest primarily in consumer-facing business activities.
Dierker said the company would consider pricing if elevated inflation persists for longer than expected, but said Church & Dwight has so far relied on productivity and trade and promotional optimization. “So far, we’re winning,” he said, citing expected gross-margin expansion.
About Church & Dwight (NYSE:CHD)
Church & Dwight Co, Inc is a U.S.-based consumer products company best known for its Arm & Hammer baking soda business. Founded in 1846 with the manufacture and marketing of sodium bicarbonate, the company has grown into a diversified maker and marketer of household, personal care and specialty products. Church & Dwight is publicly traded on the New York Stock Exchange under the ticker CHD and is headquartered in Ewing, New Jersey.
The company’s portfolio spans a range of categories including household cleaning and laundry, oral care, personal care, sexual wellness and health & wellness.
