By Tonya Garcia
With the impact of the omicron variant, supply chain squeeze and inflation expected to continue, Church & Dwight Co. says it will have raised prices on most of its brand portfolio by the coming weeks.
“To respond to rising costs, we expect that as of February 2022 we will have taken pricing actions on 80% of our global portfolio of brands,” the company said in its fourth-quarter earnings release.
The company reported fourth-quarter net income of $158.1 million, or 64 cents per share, up from $150.2 million, or 59 cents per share, last year. Sales totaled $1.369 billion, up from $1.295 billion. The FactSet consensus was for EPS of 59 cents and sales of $1.345 billion.
“We expect incremental cost inflation of $155 million versus 2021,” said Chief Executive Matthew Farrell in a statement.
“We are committed to offsetting inflation with price. In 2022, we expect to experience higher inflation at a faster rate than our price increases take effect. However, as we enter 2023, we expect inflation to be fully offset by previously announced price increases plus anticipated incremental price actions in 2022.”
Church & Dwight /zigman2/quotes/203816376/composite CHD +0.61% brands include Arm & Hammer products, Trojan condoms, Batiste dry shampoo and Zicam zinc supplements. The company recently acquired the Therabreath oral care brand, which is expected to reach $100 million in sales in 2022.
“Although consumption is higher, case fill rates are well below normal levels,” the company said.
“With continued strong consumer demand for our products, we are making significant capital investments in 2022 and 2023 to expand capacity in our factories as well as our supplier network.”
The company has a lineup of new products planned for 2022, including new VitaFusion gummy vitamins; a hair mask from the Batiste brand, known for its dry shampoo; and new hypoallergenic baby detergent and kid’s toothpaste from Arm & Hammer.
“Continuing the trend that we saw in 2021 with respect to gummy vitamins, household penetration is increasing, and existing households are consuming more vitamins,” said Farrell.
Church & Dwight raised its dividend by 4% to $0.2625 per share from $0.2525 per share, payable on March 1 to shareholders of record on February 15. This brings the annual dividend payout to $255 million.
For the first-quarter, sales growth is expected to be 3% to 4% and EPS is expected to be 75 cents. The FactSet consensus is for sales of $1.313 billion, implying 6% growth, and EPS of 86 cents.
Full-year 2022 sales growth is expected to be 5% to 8% and EPS is expected to be $3.14 to $3.26. The FactSet consensus is for sales of $5.465 billion, suggesting 5.3% growth, and EPS of $3.21.
Church & Dwight has gained 18.3% over the past year, versus 15.6% growth for the benchmark S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.49% .