Church & Dwight revises growth forecast on tariff challenges; plans strategic actions
(Reuters) -Church & Dwight joined its peers with a dour forecast due to the impact of tariffs, and announced strategic actions, including shutting or selling less profitable businesses, sending its shares down 5% in premarket trading.
The company expects a Q2 charge of $60–80 million, mainly from non-cash asset impairments and inventory charges tied to sell-through.
WHY IT’S IMPORTANT?
Church & Dwight (NYSE:CHD), which sources products such as Waterpik flossers from China for the U.S. market, has now taken a significant hit from global trade war sparked by President Trump’s sweeping import tariffs.
The company said it expects about $190 million in gross tariff exposure on a 12-month run-rate basis.
U.S. economy shrunk for the first time in three years in the first quarter, signaling that consumers have cut back spending on expensive items as they brace for a surge in product prices.
CONTEXT
Church & Dwight is experiencing rising manufacturing costs and lower sales from its biggest consumer domestic segment, offsetting gains from recent price hikes.
Peers including Procter & Gamble (NYSE:PG) as well as Kimberly-Clark (NYSE:KMB) also provided dour annual profit forecasts.
KEY QUOTE
"In the first quarter, the Domestic Division declined 3.0% organically, as retailers reduced inventory levels and consumption slowed," said CEO Rick Dierker.
Trojan condom maker said it can offset remaining tariffs through supply chain tweaks and selective pricing.
BY THE NUMBERS
Oxiclean maker projects annual organic sales growth to range from flat to a 2% increase, compared with the prior forecast 3% to 4% rise.
It also expects annual adjusted earnings per share to remain flat or increase by up to 2%, compared with the prior forecast of 7% to 8% growth.
Church & Dwight’s net sales of $1.47 billion, missed the analysts’ estimate of $1.51 billion, as per data compiled by LSEG.
Its adjusted profit of 91 cents per share edged past estimates of 90 cents.
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