Church & Dwight Earnings: Despite Modest Volume Gains, Competitive and Macro Angst Loom Large

We don’t expect any change to our $61 fair value estimate (beyond time value) after dissecting no-moat Church & Dwight’s third-quarter print, which included 4.8% organic sales growth. This was the first quarter of the last eight Church was able to eek out volume growth—to the tune of 2.7%, even as prices rose 2.1%—which could suggest its mix is winning with a cash-constrained consumer (as 40% of its portfolio is made up of value offerings). However, our enthusiasm is tempered as it was lapping dismal year-ago results, which included an 8.5% downdraft in volumes, as consumers turned their backs on Church’s more discretionary product lineup (WaterPik, VitaFusion, and Flawless).