No-Moat Church & Dwight Could Struggle to Hold Value-Conscious Consumers When the Economy Improves

We’ve long held that no-moat Church & Dwight lacks its larger peers' scale, resources, and negotiating prowess—an unenviable position, particularly when juxtaposed with intense competition and unrelenting cost headwinds. Although 40% of Church's mix skews toward value offerings, which are inherently appealing to cash-constrained consumers, we're skeptical that this offers insulation over the longer term. We think the category mix makes Church susceptible to consumers trading down or out as their financial position warrants.