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Church & Dwight Records 4.1% Organic Sales Growth in 2011
Posted: February 7, 2012
Church & Dwight Co., Inc. announced that full year 2011 net sales increased 6.2% to $2,749 million from $2,589 million in 2010. Organic sales growth for 2011 was 4.1%, driven by volume growth of 3.9% and the 0.2% positive effect of price. Organic sales exclude the impact of foreign exchange rate changes, acquisitions, divestitures, sales in anticipation of an information system upgrade, a discontinued product line, a change in shipping terms, and a change in the fiscal calendar for three foreign subsidiaries.
Of the full year 2011 results, James R. Craigie, chairman and CEO, commented, “We are proud of the business results we accomplished in 2011. Despite weak consumer demand and intense price competition, we delivered 4% organic sales growth and 12% adjusted EPS growth. In addition, we exited the year with momentum and saw an improvement in organic growth each quarter this year. We successfully implemented an information systems upgrade in Canada in October 2011 and in the United States on January 1, 2012 to provide us with better visibility to operating data and improved analytical capabilities. We significantly increased our dividend to return value to shareholders.”
The company’s reported net sales for the fourth quarter increased 11.3% to $731.1 million, and organic sales increased 7.1%, driven by volume growth of 5.4% and the 1.7% positive effect of price.
Church & Dwight’s consumer domestic division’s net sales were $519.6 million, a $47 million increase or 10% above the prior year fourth quarter sales. Fourth quarter organic sales increased by 7.4%, largely driven by higher sales of Arm & Hammer detergent products, as well as Arm & Hammer Spinbrush battery powered toothbrushes. These increases were partially offset by lower sales of OxiClean laundry additives and Arm & Hammer dental care toothpaste. Volume growth contributed approximately 6.6% to organic sales and positive price contributed 0.8%. The organic sales results exclude an estimated 1.7% benefit from a timing shift in customer orders from the first quarter of 2012 to the fourth quarter of 2011 in anticipation of the January 2012 U.S. information system upgrade and a 0.9% benefit from acquisitions. The shift in customer orders had an insignificant effect on earnings due to reinvestment in marketing and trade spending to support the brands.
For the consumer international division, net sales were $145 million, a $24.8 million increase or 20.7% above the prior year fourth quarter sales. Organic sales increased by 6.2% primarily due to increased sales in Canada, Australia and Mexico, as well as increased U.S. exports. Volume growth contributed approximately 4.1% to organic sales and positive price contributed 2.1%. The organic sales results exclude a one-time 11.9% favorable benefit from a change in fiscal calendar from November 30 to December 31 in the UK, France and Australia concurrent with the systems upgrade in the US; exclude a 4.1% benefit from acquisitions; include 1.2% from a timing shift in customer orders from the fourth quarter to the third quarter in anticipation of the October information system upgrade in Canada; and exclude the 0.3% unfavorable effect of foreign exchange rate changes. The change in fiscal calendar generated minimal incremental operating profits due to reinvestment in marketing to support the business.