Church & Dwight Co., Inc. (NYSE:CHD) Q3 2023 Earnings Conference Call November 3, 2023 10:00 AM ET

Company Participants

Matt Farrell - President, CEO & Chairman

Rick Dierker - CFO, Executive VP & Head of Business Operations

Conference Call Participants

Rupesh Parikh - Oppenheimer

Bill Chappell - Truist Securities

Chris Carey - Wells Fargo Securities

Steve Powers - Deutsche Bank

Dara Mohsenian - Morgan Stanley

Lauren Lieberman - Barclays

Anna Lizzul - Bank of America

Andrea Teixeira - JPMorgan

Olivia Tong - Raymond James

Peter Grom - UBS

Nik Modi - RBC Capital Markets

Jason English - Goldman Sachs

Jon Anderson - William Blair

Javier Escalante - Evercore ISI

Filippo Falorni - Citi

Operator

Good morning, ladies and gentlemen, and welcome to Church & Dwight’s Third Quarter 2023 Earnings Conference Call. Before we begin, I have been asked to remind you that on this call, the company’s management may make forward-looking statements regarding, among other things, the company’s financial objectives and forecasts. These statements are subject to risks and uncertainties and other factors that are described in detail in the company’s SEC filings.

I would now like to introduce your host for today’s call, Mr. Matt Farrell, President and Chief Executive Officer of Church & Dwight. Please go ahead, sir.

Matt Farrell

Thank you, operator. Good morning, everybody and thanks for joining us today. I’ll begin with a review of Q3 results, and then I’ll turn the call over to Rick Dierker, our CFO. And when Rick is wrapped up, we’ll open the call up for questions.

So let's begin. Q3 is the fourth consecutive quarter of solid results beginning with Q4 2022. Reported revenue was up 10.5%, which exceeded our 8% outlook. Organic revenue grew 4.8%, also exceeding our 4% outlook. It's worthy of note that our global consumer business posted 5.8% organic growth, which exceeded our expectations. Going the other way, our SBD business accounted for one point of negative growth. Our gross margin expanded 270 basis points, and marketing as a percentage of sales increased 80 basis points to 11.5% of sales. Adjusted EPS was $0.74, which is $0.8 higher than our $0.66 EPS outlook, and that result was driven by higher than expected sales growth and gross margin expansion. It's important to call out the 2.7% positive volume growth in Q3. It's the first in eight quarters, and our expectation is that positive volume growth will continue in Q4 to finish out the year. We continue to grow in the online class of trade. 17% of our global sales were purchased online in Q3, compared to 16% in the year ago quarter.