Church & Dwight Q2 2026 Earnings Report

Church & Dwight EPS Results

• Actual EPS: $0.89
• Consensus EPS: $0.90
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: $0.94

Church & Dwight Revenue Results

• Actual Revenue: $1.53 billion
• Expected Revenue: $1.50 billion
• Beat/Miss: Beat by +$27.22 million
• YoY Revenue Growth: +1.60%

Church & Dwight Announcement Details

• Quarter: Q2 2026
• Date: 7/31/2026
• Time: Before Market Opens
• Conference Call Date: Friday, July 31, 2026
• Conference Call Time: 10:00AM ET

Church & Dwight (NYSE:CHD) Co., Inc. is a U.S.-based consumer products company best known for its Arm & Hammer baking soda business. Founded in 1846 with the manufacture and marketing of sodium bicarbonate, the company has grown into a diversified maker and marketer of household, personal care and specialty products. Church & Dwight is publicly traded on the New York Stock Exchange under the ticker CHD and is headquartered in Ewing, New Jersey.

The company’s portfolio spans a range of categories including household cleaning and laundry, oral care, personal care, sexual wellness and health & wellness. Flagship and well-known brands in its stable include Arm & Hammer, OxiClean, Trojan, Nair, First Response, Spinbrush and Vitafusion, among others. These brands produce a mix of consumables and durable goods such as baking soda and laundry additives, stain removers, toothpaste and toothbrushes, pregnancy and fertility tests, hair removal products, condoms and gummy vitamins.

Church & Dwight distributes products through mass retailers, supermarkets, drugstores, e-commerce channels and specialty retailers, serving consumers across North America and in international markets. The company’s operating model combines in-house manufacturing and third-party sourcing with marketing, product development and category management efforts. Growth has been supported by product innovation, brand extensions and selective acquisitions that broaden category reach and shelf presence.

Governance is provided by a board of directors and an executive management team that oversee operations, brand strategy and long-term planning. The company emphasizes brand-driven marketing, research and development to maintain competitive positions in mature consumer categories while pursuing opportunities to expand into adjacent markets and channels.

Church & Dwight Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong Q2 performance led to raised 2026 guidance. Organic sales grew 5.8%, ahead of the 3% outlook, while adjusted EPS of $0.89 exceeded expectations; the company raised its full-year organic sales, EPS growth, and operating cash flow forecasts.
• Positive Sentiment: Growth was broad-based, with U.S. organic sales up 5.1%, international organic sales up 9.1%, and specialty products up 2.8%. Key brands including TheraBreath, ARM & HAMMER Cat Litter, Hero, and ZICAM gained momentum and market share.
• Positive Sentiment: Innovation and distribution remain major growth drivers. New products are expected to generate about half of organic growth, while TheraBreath toothpaste reached a 1% share early in its rollout and TheraBreath mouthwash gained 4.5 share points.
• Positive Sentiment: The newly acquired Miss Mouth stain-remover brand showed strong early traction, with consumption up more than 50% and household penetration of only 2.5%, suggesting substantial room for distribution and penetration gains.
• Negative Sentiment: Inflation, transportation expenses, tariffs, and Middle East-related costs created approximately 400 basis points of gross-margin pressure in the quarter. The company expects about $30 million of related 2026 cost headwinds, although productivity initiatives and an anticipated $15 million tariff refund are expected to offset them.

Presentation

[Operator]

Hello, everyone. Thank you for joining us, and welcome to the Church & Dwight Second Quarter 2026 Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again.

[Operator]

I will now hand the conference over to Mr. Rick Dierker, President and Chief Executive Officer of Church & Dwight. Please go ahead, sir.

[Rick Dierker, President and CEO at Church & Dwight]

Thank you. Good morning, everyone. Thanks for joining the call. We had a strong second quarter and first half. 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, a review of our Q2 results. 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. Church & Dwight is growing even faster. Consumer spending remains resilient. Our teams are executing with excellence. We remain focused on offering high-quality, solution-oriented products to consumers at the right value.

[Rick Dierker, President and CEO at Church & Dwight]

Our brands continue to perform exceptionally well, driving a second straight quarter of industry-leading organic sales growth. Turning to the quarter, net sales increased 1.6%, which was ahead of our outlook. Organic sales grew 5.8%, almost 6%, well above our 3% outlook. This growth was broad-based across all three divisions, primarily driven by volume growth of 4.3% and positive price mix of 1.5%. Adjusted gross margin was 45.4%, up 40 basis points. Adjusted EPS was $0.89 above our $0.88 outlook. Overall, this is a great result. With the first half of the year behind us, it gives us great confidence to raise our sales, EPS, and cash flow outlook for the full year. In Q2, we also completed the acquisition of the fast-growing Miss Mouth brand, the number one stain remover brand on Amazon.

[Rick Dierker, President and CEO at Church & Dwight]

We're encouraged by the strong initial sales results from the brand since the June acquisition. I'm especially excited about the growth opportunities for Miss Mouth over the next 12-18 months. In the second quarter, Miss Mouth's consumption grew over 50% and gained almost 3.5 share points. We think this is just the beginning, as household penetration for the brand is currently just 2.5%, compared to the category, which is 50%. Additionally, ACV for Miss Mouth is only 35%, compared to 80% for the category, which again indicates plenty of room to run on distribution. Innovation and distribution gains remain a significant competitive advantage for Church & Dwight. They were a major contributor to our industry-leading growth. We're confident that our relentless focus on innovation will continue to drive strong growth, distribution gains at shelf, and market share expansion.

[Rick Dierker, President and CEO at Church & Dwight]

New product launches this year are expected to account for about half of our organic growth as we innovate in key categories across the portfolio. Consumption across our largest categories grew at 2.7% in the second quarter, which exceeded our category growth expectations of around 2%. I'm going to turn my comments to each of the three divisions. First up is the U.S. business. Domestic organic sales increased 5.1%, with sustained growth in both of our household and personal care portfolios. Growth was driven by volume and favorable price mix with strong performance from TheraBreath mouthwash and toothpaste, Hero, ARM & HAMMER cat litter, and ZICAM. The ARM & HAMMER brand had another quarter of growth, with laundry maintaining record shares across total laundry.

[Rick Dierker, President and CEO at Church & Dwight]

ARM & HAMMER laundry detergent consumption and category consumption grew about 1% in the quarter, despite a step-up in competitive promotions and a lower level for ARM & HAMMER. The value segment of laundry continues to grow. Next up is litter. Continued fantastic results as ARM & HAMMER cat litter consumption grew a robust 7.5%, and share increased 0.8 points to reach 24.5%. Category promotional levels declined slightly, they remain at historically high levels. ARM & HAMMER cat litter launched Dual Defense with Microban clumping litter earlier this year, and that launch continues to do very well. Hero and TheraBreath continue to contribute considerably to overall performance. TheraBreath achieved another quarter of record share gains, jumping 4.5 points to a 25.3% share and further solidified our number two position in total mouthwash.

[Rick Dierker, President and CEO at Church & Dwight]

Even with that growth, household penetration remains relatively low at only 14%, compared to the mouthwash category of 65%. Our TheraBreath toothpaste launch continues to perform well. It's still early in the launch. It's off to a great start with a 1-point share in total toothpaste, despite only just fully entering brick and mortar in the last several months. Hero consumption outpaced the patch category. With the cleanser launch just starting now, we're confident in Hero continuing to gain share in total acne. Facial cleansers represent a $650 million category and accounts for approximately 30% of the total acne category. Lots of runway as Hero has, again, relatively low household penetration at 10%, compared to the category of 30%, which gives us confidence in the continued growth of this brand.

[Rick Dierker, President and CEO at Church & Dwight]

For Touchland, sales grew in the second quarter. With back half-weighted innovation, new collaborations, and activations, we expect continued sales growth in the second half of the year. Looking forward further, our international expansion, our innovation into new categories, and future distribution opportunities continue to give us confidence in this brand as we look to 2027. Global e-com was once again a strong contributor. Global e-commerce grew 22.7% in the second quarter. Global online sales now represent 25.5% of total consumer. Turning to international, Q2 is another great success with our international business delivering organic sales growth of 9.1%, driven by higher volume and favorable price mix. Our great international brands are leading to share gains and growth that outpace local countries' GDP.

[Rick Dierker, President and CEO at Church & Dwight]

In addition, our recent U.S. acquisitions are paying dividends across the world in a big way, where brands like Hero and TheraBreath are driving outsized growth. Our ability to scale brands to so many countries so quickly is getting better and better. Overall, our international team is executing very well. Our specialty products division also performed well. We're getting sales growth of 2.8% due to a combination of higher volume and higher price and product mix. I'll close by saying that we were very pleased with the great first half. The benefits of our strategic actions in 2025 are enabling greater focus on our growth initiatives. I am especially pleased with the time the entire organization is spending focused here on the future.

[Rick Dierker, President and CEO at Church & Dwight]

Momentum is building. The category work surrounding ARM & HAMMER, our acceleration plans for oral care behind TheraBreath, and the pipeline for M&A within the international business are just a few examples. I'll provide a detailed update in early 2027, but I will say I'm more optimistic about the future than I've ever been. I'm also very proud of our Church & Dwight team as we continue to execute well in a volatile environment.

[Rick Dierker, President and CEO at Church & Dwight]

With that, I'll turn the call over to Lee for more detail on the quarter.

[Lee McChesney, CFO at Church & Dwight]

Thank you, Rick, and good day, everyone. We appreciate you joining the call. As we now enter the second half of the year, we are encouraged by the results fueled by innovation and share growth, which provides us the momentum to deliver strong Church & Dwight Evergreen model results. The Second quarter demonstrates the strength of our portfolio of categories, our leading levels of innovation, and the execution capabilities of our teams around the globe. Similar to Rick, I also want to recognize our teams across the globe for their focus and execution this past quarter. Very well done. Let's get into the details. We'll start with EPS. Second quarter adjusted EPS was $0.89, exceeding our outlook of $0.88. Stronger than expected sales and continued gross margin improvement fueled our results and enabled increased investments in our brands.

[Lee McChesney, CFO at Church & Dwight]

Organic sales in the Second quarter grew 5.8%, well above our outlook of approximately 3%. Growth was broad-based across the business and primarily volume driven, with volume growth of 4.3% and positive pricing and mix of 1.5%. Our power brands once again gained share, fueled by well-received innovation and our robust distribution wins with our commercial partners. Strong organic growth and the contributions from our acquisitions more than offset the impact of our 2025 business exits and led to reported net sales growth of a positive 1.6% in the quarter, ahead of our expectations. Let's now turn to gross margin. Our Second quarter adjusted gross margin was 45.4%, an increase of 40 basis points versus last year.

[Lee McChesney, CFO at Church & Dwight]

Our results were driven by 150 basis points from productivity programs, 110 basis points from our higher-margin acquisitions, combined with the impact of our successful portfolio actions, and 180 basis points from the combination of volume, price, and mix. These factors offset the headwinds from inflation, tariffs, and transportation of 400 basis points. We continued to invest in our brands in the second quarter, as marketing expense was $165 million, up $8.2 million or 40 basis points versus last year. Similar to our strategy in past quarters, when our sales and gross margin results exceed our original expectations, we will utilize those opportunities to invest in our brands. Adjusted SG&A was $241.4 million or 15.8% of net sales, a 220 basis point increase versus the prior year.

[Lee McChesney, CFO at Church & Dwight]

As we've noted in our 2026 outlooks, SG&A in the first half of the year is primarily growing to the inclusion of Touchland's SG&A and amortization expense. Adjusted other expense increased by $9.2 million due to the lower interest income compared to last year. Let's now turn to cash flow. Cash flow remains a significant strength of the company, for this first six months of 2026, cash from operations was $462 million, an increase of 10.8% versus the prior year, as we delivered improved cash earnings and executed disciplined working capital results. Capital expenditures were $61.8 million in the first half, and we continue to expect full-year capital expenditures of approximately $130 million or roughly 2% of sales.

[Lee McChesney, CFO at Church & Dwight]

Let's now turn to the outlook for 2026. As detailed in our press release this morning, we are increasing our sales, earnings per share, and cash flow outlook despite the challenging macro environment. This improvement reflects the strength of our operating fundamentals, which is led by volume-based organic growth, steady market share gains, and management's focus on gross margin expansion. Our outlook continues to reflect the impact of transitory cost pressures that developed over the past 100 days. Our latest outlook of approximately $30 million reflects raw materials, transportation costs, and various premiums resulting from the conflict in the Middle East. This outlook assumes a crude oil price of approximately $90 a barrel. Our teams have acted to fully mitigate this headwind this year through increased productivity.

[Lee McChesney, CFO at Church & Dwight]

Separately, on a positive note, we expect to receive approximately $15 million of phase II tariff refund benefits during the second half of 2026. We will invest these proceeds in primarily consumer-facing business activities. We are raising our full-year organic sales outlook to approximately 4%-5%, up from the prior outlook of 3%-4%. The improved outlook reflects the strong first half execution and the continued momentum across the portfolio during the second half of 2026. We now expect to adjust gross margin expansion of approximately 100-120 basis points for the year. Marketing investments is now expected to be at or above 11% of sales as we invest behind our brands and continue supporting our growth initiatives. We are raising our adjusted EPS outlook to a growth rate of 6%-8%, versus our prior expectation of 5%-8%.

[Lee McChesney, CFO at Church & Dwight]

We also now expect cash from operations of approximately $1.175 billion, up from $1.15 billion. In turning to the third quarter, we expect organic sales growth of approximately 3% and an adjusted EPS of approximately $0.89 per share, representing approximately 10% growth versus the prior year, while we also invested approximately 12% rate of marketing as a percentage of sales. To conclude, we are very pleased with our first half performance, and are confident in our ability to deliver our improved outlook for the balance of 2026. Our portfolio remains strong, our brands continue to gain share, and our teams are executing well in a dynamic environment.

[Lee McChesney, CFO at Church & Dwight]

Operator, we are now ready for questions.

[Operator]

We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your headset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question from the line of Rupesh Parikh with Oppenheimer. Your line is open. Please go ahead.

[Rupesh Parikh, Managing Director and Senior Analyst at Oppenheimer]

Good morning, thanks for taking my question. Congrats on a nice quarter. Just going back to the organic sales growth delivery for the quarter, just curious, at a high level, what are some of the areas that drove the significant upside that we saw on that line item?

[Rick Dierker, President and CEO at Church & Dwight]

Thanks, Rupesh. The good news is it was pretty broad-based, but, as we said in the release, I think TheraBreath, cat litter, I'd say ARM & HAMMER laundry was kind of flattish. Anything else you would add, Lee?

[Lee McChesney, CFO at Church & Dwight]

I think, as Rick said, it's pretty broad-based. Home care, personal care across the globe, and really good to see international at 9% as well, and that was pretty broad-based across both Europe and Asia and Latin America as well.

[Rupesh Parikh, Managing Director and Senior Analyst at Oppenheimer]

Okay, great. My follow-up question, just on the Miss Mouth acquisition. It sounds like very strong consumption that you guys are seeing right now, as we look out the next couple of years, I know you guys talked about this business growing double digits, is there any more granularity you can give in terms of the types of growth rates you expect for the business?

[Rick Dierker, President and CEO at Church & Dwight]

I think it's a little early to do that. We just bought it in early June. A lot of work is going on to integrate and accelerate this business. I don't think we've been more excited about an acquisition in a long time. There's five individuals that came over. They've tucked right into our Fabric Care business. We know Fabric Care really well. Retailers, our internal sales force, are clamoring for this brand. It's already at a 13 share at a major retailer, and it's only been in there for a few months, as one example. I just go back to household penetration's three. It's 50 for the category. Probably the right time to talk about our North Star on growth ambitions is probably early 2027. We think there's a lot of enthusiasm around Miss Mouth.

[Rupesh Parikh, Managing Director and Senior Analyst at Oppenheimer]

Great. Thank you. I'll pass along.

[Operator]

Your next question comes from the line of Anna Lizzul with Bank of America. Your line is open. Please go ahead.

[Anna Lizzul, VP of Equity Research at Bank of America]

Hi, good morning. Thank you so much for the question. I was wondering if you could comment on the success you're seeing across ARM & HAMMER laundry. Wanted to follow up on the fact that you mentioned in the beginning of this year where you surpassed Tide Original on wash load volumes. Where are you seeing now the share gains for ARM & HAMMER across the value, mid-tier, and premium tiers? Then on the premium side for the brand, you touched on Touchland earlier in the call and the expansion to toothpaste with the rollout. Wanted to see how you're thinking about this expansion as we move forward this year. Thank you.

[Rick Dierker, President and CEO at Church & Dwight]

Yeah. Anna, on your second one, are you talking about TheraBreath or are you talking about Touchland?

[Anna Lizzul, VP of Equity Research at Bank of America]

Oh, sorry, TheraBreath. You're right.

[Rick Dierker, President and CEO at Church & Dwight]

Yeah. Okay. Well, on laundry, look, laundry in general, the good news or really the great news is, despite a significant increase in promotion, I'd say we're back to historical levels of promotion in laundry. The category was up 200 basis points. Henkel was up 1,100 basis points, and Procter was up almost 200 basis points as well. Church & Dwight was down 300 basis points on promotion. Despite that, the value segment grew, and we maintained our share. Just the world we live in these days, ARM & HAMMER is just so well-positioned for growth. There's a lot of couponing that happens off channel as well, and our competitors are spending on couponing, of course, as well.

[Rick Dierker, President and CEO at Church & Dwight]

ARM & HAMMER to hold share in an environment like that is fantastic. We, over time, will make sure that we're at historical levels of promotion as well. A lot of optimism on ARM & HAMMER laundry, especially behind our innovations. We have a good, better, best strategy, and I'd say each of those tiers within laundry are doing well. Even our sheets, as Tide evo launches and takes shelf space and money behind it, we're the number two player in the sheet space. Our sheets are up 30% as well, and we're going along for the ride, which is great. That's on ARM & HAMMER laundry.

[Rick Dierker, President and CEO at Church & Dwight]

On TheraBreath, I would say, again, number two mouthwash, lots of runway. Consumption grew at 20%+. We grew 4.5 share points to 25%. We're less than 1,000 basis points from the market leader, who's Listerine. Our household penetration's still relatively low at 14% compared to the category at 65%. That is enabling us to go into other parts of oral care, like toothpaste. We never deserved the space that we got for TheraBreath toothpaste, because of the success of the mouthwash, we got some premium, great shelf space.

[Rick Dierker, President and CEO at Church & Dwight]

As a result, we have a great brand with a great value proposition on fresh breath and cleaning. It's doing extremely well, and it's already at 1 share point. I couldn't be more optimistic about our oral care franchise behind TheraBreath.

[Anna Lizzul, VP of Equity Research at Bank of America]

Great. Thank you so much. Very helpful.

[Operator]

Your next question comes from the line of Chris Carey with Wells Fargo Securities. Your line is open. Please go ahead.

[Rick Dierker, President and CEO at Church & Dwight]

Hey, Chris, you might be on mute. Oh, there you go.

[Chris Carey, Equity Analyst and Head of Consumer Staples Research at Wells Fargo Securities]

Can you hear me?

[Rick Dierker, President and CEO at Church & Dwight]

Yep.

[Chris Carey, Equity Analyst and Head of Consumer Staples Research at Wells Fargo Securities]

Can you hear me? How about now?

[Rick Dierker, President and CEO at Church & Dwight]

We can hear you.

[Chris Carey, Equity Analyst and Head of Consumer Staples Research at Wells Fargo Securities]

Okay, great. Sorry about that. I wanted to start with the oral care portfolio and specifically the TheraBreath rollout. You said that you're getting more than your fair share out of the gates. I was wondering how you think you're tracking relative to the ambitions that you outlined at the Investor Day. I think it was an incremental $0.5 billion. Do you feel like you're starting out stronger than expected, and was that shipment for that launch a bit stronger in the quarter than perhaps what you anticipated? I was surprised you didn't call it out in some of the key drivers of organic sales. Is that something that we should be mindful for going forward, given the quite robust personal care implied organic sales number this quarter? I have a follow-up.

[Rick Dierker, President and CEO at Church & Dwight]

Yeah. TheraBreath paste is off to a good start, is what I would say, and meeting or slightly beating our expectations. I think there's a lot of great conversations in the works with additional retailers to get behind it, which is fantastic. Those conversations are easier when you have a TheraBreath mouthwash brand and business that's just, again, growing so fantastically well. Yeah, for the quarter, TheraBreath paste was a contributor to net sales for sure. Did it over-deliver a little bit? Maybe some. What was the other part of the question, Chris?

[Chris Carey, Equity Analyst and Head of Consumer Staples Research at Wells Fargo Securities]

I think that was about it. It's starting stronger than you expected. It's early days, and it was a bit of a contributor, a bit more than expected in Q2, if I heard all that correctly.

[Rick Dierker, President and CEO at Church & Dwight]

Yeah.

[Chris Carey, Equity Analyst and Head of Consumer Staples Research at Wells Fargo Securities]

Just interrupt me if [crosstalk].

[Rick Dierker, President and CEO at Church & Dwight]

You earlier had asked in terms of the growth initiatives. It's kind of early to talk about how it's doing for the first of growth initiatives, but laying the groundwork is what I would say, not just in oral care, but all the ARM & HAMMER stuff, too. That groundwork and the momentum that we're starting to build is fantastic.

[Chris Carey, Equity Analyst and Head of Consumer Staples Research at Wells Fargo Securities]

Okay. The second question is, I think this is one of the highest inflation numbers that we've seen over the past four years or so. How quickly did that develop for you? Was that freight and logistics inflation that happened quicker than you anticipated? Should we be expecting about that kind of number as we go through the rest of the year, or was that Q2 more of an anomaly? I'm also struck just by a bit stronger price mix contribution to both top line and gross margin. Is there a bit of a step change in thinking about how you're going to be covering inflation this year with pricing, or is there a bit of a mixed dynamic in that number as well? Thank you.

[Lee McChesney, CFO at Church & Dwight]

Yeah. Good morning, Chris. Keep in mind, when we talked about the $25 million-$30 million of Middle East-derived inflation, our outlook in Q2 said it was going to be higher in Q2. There is some transportation costs that were going to happen right away, then you get time to respond to it. Our productivity issues that we kicked off accelerated to mitigate that. We definitely would be more back half. It's a combination of two things. Yeah, that number should drop down because there's just some anomalies in the second quarter, then we have essentially more productivity in the back half.

[Lee McChesney, CFO at Church & Dwight]

We have this outlook of 100-120 basis points of gross margin improvement. You can see where we are halfway through the year. That implies that the gross margin will expand over 100 basis points in the back half of the year. On the price volume mix, [crosstalk]. That's a good number. Obviously, we always say never overreact to one quarter. The first quarter is just slightly negative. Our mindset is to drive volume growth and we do drive positive mix. That's part of our algorithm. A reminder, this year, we do have the benefit of the portfolio actions that help as well, and that will be a benefit all year.

[Rick Dierker, President and CEO at Church & Dwight]

Yeah, I'd probably say in the quarter, when we don't spend as much on promotion on laundry, that helps year-over-year a little bit on the price side of it too.

[Chris Carey, Equity Analyst and Head of Consumer Staples Research at Wells Fargo Securities]

Okay, great. Thank you.

[Operator]

Your next question comes from the line of Bonnie Herzog with Goldman Sachs. Your line is open. Please go ahead.

[Bonnie Herzog, Managing Director at Goldman Sachs]

All right. Thank you, and good morning, everyone. I just had a question on your improved outlook for the year. You took up your top-line growth guidance by a point and now expect higher gross margins, and while you did raise the lower end of your EPS growth guidance, you kept the high end of the range. Wanted to understand the drivers of that and maybe how much further you plan to step up reinvestments to drive sustainable top-line growth ahead. Also, if you could provide some examples of these investments and any changes you might be making to your strategy, given the pressured macro environment would be helpful. Thanks.

[Rick Dierker, President and CEO at Church & Dwight]

Yeah, thanks, Bonnie. It's a good question. I would say, look back at our track record over the last one, three, five, 10 years. What do we do when we feel like we're over-delivering and performing well against our expectations and against the industry is we tend to spend back. We could, in theory, beat earnings and EPS in any one year, we choose to spend more on marketing, or we spend more on investments. We want to make sure that flywheel is going, that virtuous cycle happens, and we keep gaining share and shelf space and support the innovations that we're launching. Beyond marketing, we've also started to spend money behind AI, and there's some initiatives we have in place where we're going to pull some of those forward as an example, so that we can scale faster.

[Rick Dierker, President and CEO at Church & Dwight]

One of our core competencies, and I think competitive advantages, is really our speed and agility. We're going to go try to adopt and adapt faster than most people.

[Bonnie Herzog, Managing Director at Goldman Sachs]

All right. Thank you for that. I'll pass it on.

[Operator]

Your next question comes from the line of Peter Grom with UBS. Your line is open. Please go ahead.

[Peter Grom, Equity Research Analyst at UBS]

Great. Thank you. Good morning, everyone. You mentioned that consumption in your largest category, I think, grew 2.7% in the quarter, above your expectation for 2%. Obviously a lot of moving pieces within the quarter itself. Kind of curious if you could speak to what you saw throughout the quarter, and maybe more specifically, the exit rate, and just as you think about the back half of the year, what are you embedding in terms of category growth?

[Rick Dierker, President and CEO at Church & Dwight]

Yeah, the short answer is, we're still assuming around 2% for category growth. We continue to do better than that, as you saw in the last couple of quarters. I think that's a good, in general, walking around number for a while. Our monthly consumption numbers in Q2 were fantastic. June was also good, with the exception of laundry, as we didn't repeat some promotions in laundry. Sometimes we choose to do that. We also had a club promotion that we didn't do in the quarter as well. I would say we did that fantastic growth with flattish impact from one of our larger businesses.

[Rick Dierker, President and CEO at Church & Dwight]

Again, consumption's going really well. Shares are doing really well. It's broad-based to my first answer to kind of Rupesh's question early on. There are a lot of things that are going right. This is the right time for us as a company, especially because we're not distracted with some of those businesses that we've sold, Peter. We have the time to focus on the future, we're laying the groundwork for those three growth initiatives that we've talked about again and again and again. A lot of internal time is being spent on the future right now.

[Peter Grom, Equity Research Analyst at UBS]

Rick, you mentioned we're going to get some more color at a later date, but you did say that you were more optimistic than ever. I guess just looking at the guidance and the 4Q implied exit rate would suggest some pretty nice momentum heading into next year. Maybe, putting that all together, can you maybe just discuss why you are as optimistic as you've ever been and maybe what that means as it pertains to top and bottom line growth?

[Rick Dierker, President and CEO at Church & Dwight]

Yeah, I don't know if I'll go to top and bottom line growth yet, but I'll tell you, we're doing all this category work in ARM & HAMMER. We're getting real consumer feedback. We're getting real good buy-in from some retailers on the ideas. We're making great progress on how and why they have a reason for being and have a right to win in a certain category. It's obvious why we're happy about TheraBreath and its success, and meanwhile, internationally, that brand, along with Hero, is really developing into a business of tens of millions of dollars. There's good global expansion going on.

[Rick Dierker, President and CEO at Church & Dwight]

Then the third growth initiative was really international growth. A piece of that is international M&A. We've been talking a lot over the past few years about, "Hey, we have people here now. We have a process here now. It's starting to go from theoretical to practical. We've filtered through 100 deals over the last, 6-12 months now internationally. We're being as picky and as fussy as we always would be with any deal. Now we're starting to see the deal flow, which is great. Those are some examples.

[Peter Grom, Equity Research Analyst at UBS]

Great. Thank you so much. I'll pass it on.

[Operator]

Your next question comes from the line of Olivia Tong with Raymond James.

[Olivia Tong, Managing Director and Senior Analyst at Raymond James]

Great. Thanks. Good morning. Regarding the competitive backdrop, you mentioned the promotional environment. Everyone's obviously talking about their various investments in affordability. I realize this isn't new to you, though perhaps there are more tools out there now, whether it's leveraging retail relationships, AI, and other tools. To the extent that your competitors continue to invest in some of the affordability initiatives that they're pushing, can you provide a little bit more in terms of how you think about combating those, particularly if they start to continue to increase?

[Rick Dierker, President and CEO at Church & Dwight]

Yeah, I think it's a fair question, Olivia. I would just tell you, though, look at our track record over the last, not one or five, but decade or two of how we compete in household, right? We have a great ability to do that, and sometimes it's trade promotion. Hopefully, usually it's innovation, hitting the right price pack architecture and sizing. You want to deliver, like I said in my remarks, a great high quality at a value price for the consumer. It just so happens that our brands are the intersection of that naturally. Competitors have to compete a lot harder than we do because we naturally fall in those intersections.

[Olivia Tong, Managing Director and Senior Analyst at Raymond James]

Got it. On Miss Mouth, sort of similar to Hero, TheraBreath, Touchland, I know it's early days, but what do you think Miss Mouth can bring to you in terms of discussions with new retailers, new categories, geographic opportunities as you sort of assess the ability to grow that business beyond where it sits right now?

[Rick Dierker, President and CEO at Church & Dwight]

Yeah, it has the ability to do all of that. When really you have a brand that's driving category growth, it's driving usage occasions, it's driving new consumers and young consumers at that into the category. It has a magic moment, it's actually not even the same consumer as OxiClean. OxiClean's a little bit more broader based, but Miss Mouth is really a higher end and just a great see something, do something in terms of the stain. I don't want to get into too much detail. I would just say it is additive for every retail conversation that we have, and we're working hard to not just do current capacity, but also what the future of that brand and where consumers say it has the right to go, because it's going to continue to broaden on forums and maybe even adjacencies.

[Olivia Tong, Managing Director and Senior Analyst at Raymond James]

Understood. Thank you.

[Operator]

Your next question comes from the line of Steve Powers with Deutsche Bank. Your line is open. Please go ahead.

[Steve Powers, Associate Director of U.S. Equity Research at Deutsche Bank]

Hey, great. Good morning, guys. To start, I think year-to-date, Rick, the results you put up around 5% volume metric shipments, both for the total company and I think even in the consumer domestic business, I guess, how does that compare to your views on consumption year-to-date, and how does that inform your back-half thinking? And I guess juxtaposed against that, it sounds like you've made some choices this quarter that benefit of the price-mix line that seem kind of unique to the quarter. So I guess as I think forward, do we see sort of a return to more of a more full promotional stance in the back-half as well?

[Rick Dierker, President and CEO at Church & Dwight]

I would say consumption and our organic, there is no real disconnect. It's around 5% or so on both. There's great momentum that we experienced in the first half. In the second half, we expect a lot of that to continue. I think we pulled the data on a two-year stack as an example, and the two-year stack for organic growth is 5% in the first half and 6% in the second half. Again, just really broad-based, more than just one thing going on as a tailwind for the company. You're right, I kind of referenced a little bit, maybe a bit of a pullback in promotion that we had. I wouldn't even say a pullback. I'd say we were at a certain level and there was an acceleration by other competitors.

[Rick Dierker, President and CEO at Church & Dwight]

I don't know about much year-over-year change from a price mix perspective, but a little bit from help from laundry. There are other things happening in the portfolio. As we have these higher margin products like a TheraBreath or like a Hero, or even like a Miss Mouth, as they continue to grow, that's going to be a favorable flow on mix.

[Rick Dierker, President and CEO at Church & Dwight]

Lee, anything you would add to that?

[Lee McChesney, CFO at Church & Dwight]

I think Rick said it well. We focus on volume growth. If you look at our history on price mix, it's neutral to positive. It was just a little bit slightly higher in the second quarter. Some of that's a little bit year-over-year. As we look forward, that's going to be the equation. It's going to be volume driven, and we'll benefit from the things Rick talked about. The way we're positioned. We will do what we do on discounting, but we don't have to do as much as the others do.

[Steve Powers, Associate Director of U.S. Equity Research at Deutsche Bank]

Perfect. Rick, I was hoping you could talk a little bit more about international M&A. As you said, you've been talking about it for a while. It seems from the way you're talking about it now, the excitement is building, anticipation is building. I guess, have you learned anything in terms of the opportunity's been there on paper for a long time, but it's also taken a little while to manifest in a transaction. Have you learned anything in terms of where it's harder or not? Just any perspective on the opportunities you see it today versus when you set out to focus on this initiative?

[Rick Dierker, President and CEO at Church & Dwight]

Yeah. I think we were busting our pick on it for a little while, it was all about people and structure. It wasn't a bad approach, but initially, we added M&A people and a person in Europe, for example, I would say it was a little bit disconnected from the management teams. It was almost like a center of excellence on M&A. We changed that approach about six-eight months ago, we said the management teams are responsible, the M&A person supports that. All of a sudden, the international management teams, the country director and his or her staff, Australia, the same thing, Southeast Asia, the same thing, Latin America, the same thing.

[Rick Dierker, President and CEO at Church & Dwight]

You have a right to go and an obligation to go look at not just what you hear from the bankers or for our M&A contact, but where do you want, what brands would you like to go and look at? When we made it their objective, they owned it, I'd say that was the unlock for us. Of course our M&A team is enabling and helping, but I think we went right from first to third gear since we did that.

[Steve Powers, Associate Director of U.S. Equity Research at Deutsche Bank]

Okay, perfect. Thanks so much. Pass it on.

[Operator]

Your next question comes from the line of Lauren Lieberman with Barclays. Your line is open. Please go ahead.

[Lauren Lieberman, Managing Director at Barclays]

Great, thanks. I had two questions. First was, at the risk of being redundant, because I got a little bit confused on Chris's question and the answer, which is the gross margin this quarter. I know you gave the bridge, but in total, it did come in below your expectations, and there wasn't a huge change on the inflation guide, as you guys pointed out. Just curious on the slight shortfall on gross margins this quarter.

[Lauren Lieberman, Managing Director at Barclays]

My second question was just about how Touchland is trending. It's going to slide into organic sales going forward from here, so just wanted to get an update on that brand. Thanks.

[Lee McChesney, CFO at Church & Dwight]

All right. I'll take the first question. Yeah, just to answer the question, we had just slightly higher transportation costs in the second quarter, even a little bit higher than we thought. But as we talked about for the year, we're still at $30 million in all. Same type of impact overall.

[Rick Dierker, President and CEO at Church & Dwight]

On Touchland, I think my comments were really, we had sales growth in the second quarter. We have a lot of back half-weighted innovation, new collaborations with other brands and some activations up and down the channel. We expect sales growth in the second half of the year. We have a lot of work going on in innovation into, as we've said before, another category or two and some other distribution opportunities, plus international expansion. I think that's a muscle that we've built really well with some of these brands now. Takes a little bit regulatory perspective, but that's going to start hitting in 2027 as well. That should be a tailwind.

[Rick Dierker, President and CEO at Church & Dwight]

Okay. We'll take the next question.

[Operator]

Your next question comes from the line of Javier Escalante with Evercore ISI. Your line is open. Please go ahead.

[Javier Escalante, Analyst at Evercore ISI]

Hi. Good morning. I guess the punchline in laundry is that ARM & HAMMER is holding share without promoting or promoting less and while the others promote. I don't know whether I heard this correctly because it sounded like a big number. Did you say that Henkel increased promotional activity by how much?

[Rick Dierker, President and CEO at Church & Dwight]

Yeah, I said a lot of hundreds basis points.

[Javier Escalante, Analyst at Evercore ISI]

Okay, that's high. What does it mean right now, given how the oil is trending? Have you seen any change given that the category is so slow? If you can clarify that a little bit.

[Rick Dierker, President and CEO at Church & Dwight]

Yeah. No, it's a good question, Javier. Look, I think I said last quarter, when commodities are high and they stay high for a while, what tends to happen? Promotion tends to kind of dial back a bit. That is not what happened this past quarter. My belief is a lot of people got tariff refunds, and they're spending it back and trying to drive volume. The good news for us is again, ARM & HAMMER is at that intersection of value and just quality, and we don't need to promote as much in order to hit that kind of price point. So we held share, which is fantastic.

[Rick Dierker, President and CEO at Church & Dwight]

As we increase promotion a little bit, at historical levels, of course, I tend to think that we're going to continue to do what we've done for the last 15, 20 years, is gain share in ARM & HAMMER year after year.

[Javier Escalante, Analyst at Evercore ISI]

Thank you. My second one is in cat litter. Continue doing really well. You mentioned in Q1 that you got the strongest TDP growth in HPC. We are seeing it. Heading into back to school, any change in distribution, particularly in this business, if you can comment on that. Thank you.

[Rick Dierker, President and CEO at Church & Dwight]

Yeah, I would say litter is doing extremely well. To have 7.5% consumption growth and almost a full share point gained is great. We're doing that the right way. We're doing that the way we've always done it, which is innovation. ARM & HAMMER cat litter is just known for innovation. Our new one this year on Dual Defense with Microban is a great example of that. Some competitors are spending a lot. We're within historical levels. We're doing all the right things. We've talked before about some of the attributes of why ARM & HAMMER does so well. We have the orange box, we have the black box, we have premium value. Just, again, litter's doing great.

[Javier Escalante, Analyst at Evercore ISI]

Thank you.

[Operator]

Your next question comes from the line of Robert Moskow with TD Cowen. Your line is open. Please go ahead.

[Robert Moskow, Managing Director at TD Cowen]

Thank you. One of the many positive surprises here is there's no mention of retailers reducing inventory in your categories. My first question is, how do you think you dodged that bullet? Do you think it's because of the categories, or do you think it's just because you, in particular, have the right inventory levels? I had another question on Touchland. You mentioned that it grew, but there's not a lot of commentary on how much it grew. Is the pace of growth decelerating compared to first quarter? Can you be more specific for us? Thanks.

[Rick Dierker, President and CEO at Church & Dwight]

Let's see. The first question is on retail inventory. Look, if you look back at all of our transcripts, probably for the last 10 or 15 years, we've talked about retail inventory maybe 2x or 3x, and two of those times were earlier in 2025. There's always dynamics that are happening with retail inventory, we never believe they are impactful enough for us to comment on or something that we can't overcome. There's, I would say, some movement, but overall immaterial.

[Rick Dierker, President and CEO at Church & Dwight]

The second one is on Touchland. Our outlook for that is probably high single digits these days. Again, we're really comforted by the fact that we have this great innovation lineup. We have this great collab lineup coming. A lot of the support that we have in the back half with displays from these retailers. Touchland, continue to be optimistic about it.

[Robert Moskow, Managing Director at TD Cowen]

Okay, thanks.

[Operator]

Your next question comes from the line of Filippo Falorni with Citi. Your line is open. Please go ahead.

[Filippo Falorni, Director of Equity Research at Citi]

Hi. Good morning, everyone.

[Rick Dierker, President and CEO at Church & Dwight]

Good morning.

[Filippo Falorni, Director of Equity Research at Citi]

I wanted to ask, the international business. Solid performance there. It's now continuing to deliver on pretty tougher comparisons. Maybe can you give us a sense of what regions are driving the growth there, where are you seeing the strength? Then the second part of the question, as you think about the opportunity for some of the recent acquisitions like TheraBreath, Hero, Touchland, how much more opportunity you see for expansion of those brands internationally? Thank you.

[Rick Dierker, President and CEO at Church & Dwight]

Yeah. I'll take the brand one, then I'll let Lee talk about kind of the countries and the regions. We are still in early innings for a baseball analogy for TheraBreath and Hero, and very early for Touchland. I think we're hitting number one share positions in many, many countries all over the world. We have great retailer discussions about how we're growing kind of the acne category with Hero. Of course, the mouthwash rollout is a little bit slower than the acne rollout, but they're both doing extremely well. Once they get in market, these brands, because they are a problem solution, because consumers can see them working, because they're premium brands for retail, they're driving category growth. Once they're in market, it starts to become kind of a virtuous cycle.

[Lee McChesney, CFO at Church & Dwight]

I'll just pick up from there. Certainly, Hero, TheraBreath, Batiste was a great driver in the quarter for us. Then, if you think about that, we're taking those across the globe. That's what we do really well. You ask which part's doing well Quite frankly, very broadly. Europe, for example. Europe, as economy wants to be slower, we're growing at the levels you see at the total level here. Doing really well in Asia and Latin America as well. You said this in the first quarter. First quarter had a little bit of impact in the Middle East. You take it out, it was growing towards mid to high single digits. The outlook for the business is to be high single digits. That's what it is in the Evergreen model. It was great to see another strong quarter from them.

[Filippo Falorni, Director of Equity Research at Citi]

Great. Thank you, guys.

[Operator]

Your next question comes from the line of Andrea Teixeira with J.P. Morgan. Your line is open. Please go ahead.

[Andrea Teixeira, Executive Director at J.P. Morgan]

Thank you, operator. Hi, everyone. I just wanted to go back to what you mentioned about TDPs' rate in one of the categories. I was hoping to see if you can explore a little bit of the TDPs on the laundry side, and how we're cycling that. You just say that you're not engaging your promo levels are below. Just curious, and you're still getting share. Just curious to see the volume, if you think about volume share, if you can talk about that, and as well as how to think about TDPs for laundry and in general in U.S. for the remainder of the year. When you're cycling that, do you see that cycling some of the TDP growth into next year, or you're cycling some of it like in the third quarter? Thank you.

[Rick Dierker, President and CEO at Church & Dwight]

Thanks, Andrea. Really, remember, last quarter, we kind of talked about our industry-leading TDP growth, and it was, I want to say around 11% or 12%, and most of the industry average was at 5% or 6%. We were double what most people were getting. At the time when we talked about TDP growth, I said it was very broad-based. It was across brands and across channels, and that was entirely true. I think laundry, I don't have it in front of me, but I would guess it was high single digits for ARM & HAMMER. That all was kind of towards the front part of the year. It takes a while for that to reset. That's into next year is what I would say all those TDP results help with.

[Rick Dierker, President and CEO at Church & Dwight]

We'll go to the next question.

[Operator]

Your next question comes from the line of Edward Lewis with Brookshire. Your line is open. Please go ahead.

[Analyst at Brookshire]

Thanks very much. Just a couple from me, please, Rick and Lee. Just on Batiste, I guess one of your power brands is a bit of a tricky 25 for you in the U.S., you call that strength in the international, but I just wondered how things are going in the U.S. for Batiste. Is it a category challenge you're facing there, or is it more of a brand challenge? I think you went live on the ERP, didn't you, in April? Looking back at what sort of you talked about or on the Investor Day, talked about it being an engine of growth in the future, at least Ray did there, who implementing it.

[Analyst at Brookshire]

I just wonder, Rick, the clear optimism you feel about the outlook for the business, how much does this new sort of upgraded ERP sort of feed into that optimism?

[Rick Dierker, President and CEO at Church & Dwight]

Thanks, Ed. For Batiste, we've talked about this. It's really a tale of two cities. Batiste internationally is doing phenomenally well. It's growing double digits. It's one of the main drivers of growth behind TheraBreath and Hero, behind innovation, the right pricing strategy. Our international Batiste business is doing extremely well. Batiste in the U.S. is growing. We're growing a little short of the category. Category grew 5.5%. We grew closer to 2% from consumption. We lost a little bit of share, 1.44%. That was closer to 4 or 5 share points in prior quarters. We were making great headway on Batiste. I've seen the inflection. I'm not worried about Batiste. We have a great set of actions that are already in market or lined up for market in late this year or early next year on sizes and offerings and price-pack architecture.

[Rick Dierker, President and CEO at Church & Dwight]

We have some great innovation queued up, and just a lot of confidence in the Batiste brand. That's not something I really worry about long term. The ERP system, I think it's an underappreciated fact that we have a North American ERP system, and as we do acquisitions, it is one of the things that enables us to do acquisitions so flawlessly and seamlessly. Just to give you a real-life example, we closed on Miss Mouth, I think around June 1st or so, and we're going to be fully integrated by end of August. Like that is lightning fast, even for us. That capability is, I think, again, just a great advantage for us.

[Rick Dierker, President and CEO at Church & Dwight]

Next question, please.

[Operator]

Your last question comes from the line of Kevin Grundy with BNP Paribas. Your line is open. Please go ahead.

[Kevin Grundy, Managing Director at BNP Paribas]

Great. Thanks. Morning, everyone. Two questions from me, Rick, related to the pricing environment, where it would certainly seem like the cost environment and cost inflation we're seeing would justify additional pricing. A lot of discussion about brand strength broadly From Church and from some of your peers, but it doesn't seem like in certain cases that the industry's looking at pricing as a lever to offset the cost inflation where there's a clear justification for that. Like for Procter, it's a more premium portfolio than you. Clorox, sort of well-documented what's going on from a market share perspective. I'm just trying to square some of the brand strength discussion and what would certainly appear to be a clear cost justification for additional pricing in this backdrop of a softer consumer environment, particularly in household products and some of the decisions not to take additional price.

[Kevin Grundy, Managing Director at BNP Paribas]

What's different in the current environment versus past where the industry seems more inclined to move on price? Just your thoughts there, Rick, on retailers' openness for additional price in your portfolio, how you're thinking about it for Church, and what you've included in your outlook. Thank you.

[Rick Dierker, President and CEO at Church & Dwight]

Yeah. Thanks, Kevin. My answer doesn't really change a lot from what I talked about last quarter. I think, in this environment, consumers are pressed, and we see that. Like when you see stuff go on promotion, I would say elasticities are higher than they normally would be. Consumers are pressed, our job is to help offset that as best we can. We said last quarter we were going to do that with productivity, and we were fighting hard to do that, and we've largely done that, which is great. We said that if we couldn't do that and this inflationary environment stays higher for longer, we would look at pricing eventually, and that's still true. We believe, we hope, that this higher inflation environment isn't permanent.

[Rick Dierker, President and CEO at Church & Dwight]

Meanwhile, we're fighting it with productivity, we're fighting it with trade and promotional optimization, and so far, we're winning. Look at our gross margin expansion as an example. I think a lot of our peer groups are going backwards on margin. For a long time, typically what you see is when inflation happens, promotional levels abate as a first step. That's not what's happening right now. Like I said before, I believe that a lot of tariff rebates are happening from retailers and to other manufacturers, and they're competing that away a bit. That has to play out a bit, Kevin, is my short answer to you, but we're in a great position to win either way.

[Kevin Grundy, Managing Director at BNP Paribas]

Okay. Thank you.

[Operator]

There are no further questions at this time. I will now turn the call back to Mr. Rick Dierker for closing remarks.

[Rick Dierker, President and CEO at Church & Dwight]

Okay. Thanks, everyone. Looking forward to talking again in the third quarter, and meanwhile, have a great rest of the summer. Bye.

[Operator]

This concludes today's call. Thank you for attending. You may now disconnect.

Participants

Executives

• Rick Dierker, President and CEO
• Lee McChesney, CFO

Analysts

• Rupesh Parikh, Managing Director and Senior Analyst at Oppenheimer
• Anna Lizzul, VP of Equity Research at Bank of America
• Chris Carey, Equity Analyst and Head of Consumer Staples Research at Wells Fargo Securities
• Bonnie Herzog, Managing Director at Goldman Sachs
• Peter Grom, Equity Research Analyst at UBS
• Olivia Tong, Managing Director and Senior Analyst at Raymond James
• Steve Powers, Associate Director of U.S. Equity Research at Deutsche Bank
• Lauren Lieberman, Managing Director at Barclays
• Javier Escalante, Analyst at Evercore ISI
• Robert Moskow, Managing Director at TD Cowen
• Filippo Falorni, Director of Equity Research at Citi
• Andrea Teixeira, Executive Director at J.P. Morgan
• Analyst at Brookshire
• Kevin Grundy, Managing Director at BNP Paribas