Q2 2026 Church & Dwight Co Inc Earnings Call Transcript
Key Points
- Church & Dwight Co Inc (CHD) delivered strong Q2 2026 results with organic sales growth of 5.8%, well above the 3% outlook, driven by broad-based volume growth of 4.3%.
- The company raised its full-year 2026 outlook for sales, EPS, and cash flow, reflecting confidence in continued momentum.
- The acquisition of Miss Mouth, a fast-growing stain remover brand, is off to a strong start with consumption up over 50% and significant room for distribution and household penetration growth.
- TheraBreath continues to gain market share, reaching a record 25.3% share in mouthwash, with low household penetration indicating substantial growth runway, including in toothpaste.
- International business delivered strong organic sales growth of 9.1%, driven by successful scaling of brands like Hero and TheraBreath across global markets.
- Gross margin expanded by 40 basis points in Q2, driven by productivity programs and favorable mix, despite headwinds from inflation and tariffs.
- Global e-commerce sales grew 22.7% in Q2, now representing 25.5% of total consumer sales, highlighting strong digital momentum.
- The company faces significant cost headwinds from inflation, tariffs, and transportation, totaling approximately $30 million in 2026, which partially offset margin gains.
- Competitive promotional activity in laundry increased, with competitors like Henkel and Procter & Gamble ramping up promotions, while Church & Dwight Co Inc (CHD) reduced its own promotional spending.
- ARM & HAMMER laundry detergent saw flat consumption growth in Q2, with the company losing some share due to lower promotional activity.
- The company's SG&A expenses increased by 220 basis points as a percentage of net sales, partly due to the inclusion of Touchland's SG&A and amortization.
- The macro environment remains volatile, with consumer elasticities higher than normal, making it challenging to pass on price increases.
- Batiste brand in the US is growing below category rates, losing share, although international performance is strong.
- The company expects Q3 organic sales growth of only 3%, a deceleration from Q2's 5.8%, indicating a more cautious outlook for the near term.
Hello, everyone. Thank you for joining us, and welcome to the Church & Dwight second-quarter 2026 earnings conference call. (Operator Instructions)
I will now hand the conference over to Mr. Rick Dierker, President and Chief Executive Officer of Church & Dwight. Please go ahead, sir.
Thank you. Good morning, everyone. Thanks for joining the call. We had a strong second quarter and first half, and I want to start by thanking all of our Church & Dwight employees all around the world for executing so well in a challenging environment. I'll begin with some thoughts on the broader environment and then a review of our Q2 results. And then I'll turn the call over to Lee McChesney, our CFO, and when Lee is done, we'll open it up for questions.
Starting with the broader environment. Conditions remain dynamic. However, our categories are growing ahead of our original expectations, and Church & Dwight is growing even faster. Consumer spending
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