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Church & Dwight Net Income at $79 Million for Q2 2012
Posted: August 8, 2012
Church & Dwight Co., Inc. reported net income for the second quarter 2012, ended June 30, 2012, of $79.3 million, or $0.56 per share, compared to the reported net income of $82.6 million, or $0.57 per share, for the same period in 2011. The results exceed management’s previously announced earnings per share forecast of $0.54 per share for the quarter. Reported net sales for the second quarter increased 3.2% to $696.4 million. Organic sales increased 3.7% driven by 6.3% volume growth offset by 2.6% unfavorable product mix and pricing. Organic sales exclude the impact of a 2011 brand acquisition and foreign exchange rate changes.
James R. Craigie, chairman and CEO, commented, “We are very pleased with our second quarter business results in what continues to be a difficult economic environment. The organic sales increase of 3.7% reflects strong volume growth. Despite continuing weak category consumption in the U.S., we increased market share on five of our eight power brands in the quarter.”
Consumer domestic net sales for the company were $506.5 million, a $24.2 million, or a 5% increase over the prior year second quarter sales. Second quarter organic sales increased by 5.0%, primarily due to the company’s laundry products, but these increases were partially offset by lower sales of the Arm & Hammer Spinbrush battery-operated toothbrushes, Answer diagnostic kits and Orajel oral analgesic products. Volume growth contributed 8.6% to sales, partially offset by the 3.6% unfavorable product mix and pricing.
Consumer international net sales were $121.3 million, a $4.7 million or 3.7% decrease from the prior year second quarter sales. Organic sales decreased by 2.7%, primarily due to weaker sales in Europe. Volume accounted for 2.4% of the decrease, with 0.3% of the decrease resulting from unfavorable product mix and pricing. Organic sales exclude a 5.9% benefit from an acquisition and a negative impact of 6.9% from foreign exchange rate changes.
Discussing the outlook for 2012, Craigie stated, “We continue to expect a difficult and challenging economic environment for the remainder of 2012. Consumer spending and growth in many categories is expected to remain weak due to high unemployment and consumer uncertainty. Commodity price pressure remains in 2012 and competition will remain fierce. Nevertheless, we are in a strong position to continue to deliver value to our stockholders as a result of our balanced portfolio of value and premium products, aggressive cost cutting and tight management of overhead costs.
“We continue to expect organic net sales growth to be at the high end of our 3–4% annual target due to our strong first half results of 6%, and our innovative new product launches in 2012. Organic net sales growth over comparable periods in 2011 is anticipated to be lower in the second half of 2012 because of significantly higher organic net sales growth rates in the second half of 2011. Gross margin is expected to increase by an amount at the lower end of our 25-50 basis points annual target. We plan to increase our marketing support in the second half and focus it behind our power brands and our innovative new value and premium products, which we believe will continue to drive market share gains.
“As a result of these factors, we continue to expect diluted earnings per share for 2012 to be in the range of $2.41 to $2.43. This is an increase of 14–15% on a reported basis, and 9–10% over 2011, excluding a deferred tax valuation allowance charge of $0.09 per share that we incurred in the fourth quarter of 2011,” Craigie concluded.