Church & Dwight 10-Q 2024-06-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended June 30, 2024

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-10585

CHURCH & DWIGHT CO., INC.

(Exact name of registrant as specified in its charter)

Delaware		13-4996950
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

500 Charles Ewing Boulevard**,** Ewing**,** NJ 08628

(Address of principal executive offices)

Registrant’s telephone number, including area code: (609) 806-1200

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1 par value		CHD	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer		☒		Accelerated filer		☐
Non-accelerated filer		☐		Smaller reporting company		☐
Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 31, 2024, there were 244,814,961 shares of Common Stock outstanding.

TABLE OF CONTENTS

PART I

Item				Page
1.		Financial Statements		3
2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
3.		Quantitative and Qualitative Disclosures about Market Risk		29
4.		Controls and Procedures		29

PART II

1.		Legal Proceedings		30
1A.		Risk Factors		30
2.		Unregistered Sales of Equity Securities and Use of Proceeds		31
5.		Other Information		31
6.		Exhibits		32

PART I – FINANCIAL INFORMATION

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In millions, except per share data)

	Three Months Ended								Six Months Ended
	June 30,				June 30,				June 30,				June 30,
	2024				2023				2024				2023
Net Sales	$	1,511.2			$	1,454.2			$	3,014.5			$	2,884.0
Cost of sales		799.1				815.3				1,615.4				1,623.1
Gross Profit		712.1				638.9				1,399.1				1,260.9
Marketing expenses		152.4				132.2				304.4				254.5
Selling, general and administrative expenses		222.8				213.1				452.8				420.9
Income from Operations		336.9				293.6				641.9				585.5
Equity in earnings of affiliates		3.1				2.0				4.2				6.4
Other income (expense), net		3.7				1.7				6.7				3.0
Interest expense		**(**23.2	)			(27.9	)			**(**48.2	)			(56.7	)
Income before Income Taxes		320.5				269.4				604.6				538.2
Income taxes		77.0				48.2				133.4				113.8
Net Income	$	243.5			$	221.2			$	471.2			$	424.4
Weighted average shares outstanding - Basic		244.3				245.0				243.9				244.4
Weighted average shares outstanding - Diluted		247.0				247.9				246.5				247.4
Net income per share - Basic	$	1.00			$	0.90			$	1.93			$	1.74
Net income per share - Diluted	$	0.99			$	0.89			$	1.91			$	1.72
Cash dividends per share	$	0.28			$	0.27			$	0.57			$	0.54

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In millions)

	Three Months Ended								Six Months Ended
	June 30,				June 30,				June 30,				June 30,
	2024				2023				2024				2023
Net Income	$	243.5			$	221.2			$	471.2			$	424.4
Other comprehensive income, net of tax:
Foreign exchange translation adjustments		**(**2.8	)			3.3				**(**6.3	)			5.7
Defined benefit plan adjustments gain		0.0				0.0				**(**0.2	)			1.5
Income (loss) from derivative agreements		3.0				(4.9	)			4.6				(5.7	)
Other comprehensive (loss) income		0.2				(1.6	)			**(**1.9	)			1.5
Comprehensive income	$	243.7			$	219.6			$	469.3			$	425.9

See Notes to Condensed Consolidated Financial Statements (Unaudited).

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions, except share and per share data)

		June 30,				December 31,
		2024				2023
Assets
Current Assets
Cash and cash equivalents		$	491.7			$	344.5
Accounts receivable, less allowances of $7.4 and $7.3			587.9				526.9
Inventories			627.3				613.3
Other current assets			48.3				45.0
Total Current Assets			1,755.2				1,529.7
Property, Plant and Equipment, Net			943.6				927.7
Equity Investment in Affiliates			12.8				12.0
Trade Names and Other Intangibles, Net			3,244.7				3,302.3
Goodwill			2,432.6				2,431.5
Other Assets			373.2				366.0
Total Assets		$	8,762.1			$	8,569.2
Liabilities and Stockholders' Equity
Current Liabilities
Short-term borrowings		$	6.1			$	3.9
Current portion of long-term debt		0.0					199.9
Accounts payable			673.2				630.6
Accrued expenses and other liabilities			460.8				580.4
Income taxes payable			9.6				7.2
Total Current Liabilities			1,149.7				1,422.0
Long-term Debt			2,207.6				2,202.2
Deferred Income Taxes			742.4				743.1
Deferred and Other Long-term Liabilities			324.1				313.7
Business Acquisition Liabilities			32.8				32.8
Total Liabilities			4,456.6				4,713.8
Commitments and Contingencies
Stockholders' Equity
Preferred Stock, $1.00 par value, Authorized 2,500,000 shares; none issued			0.0				0.0
Common Stock, $1.00 par value, Authorized 600,000,000 shares and 293,709,982 shares issued as of June 30, 2024 and December 31, 2023			293.7				293.7
Additional paid-in capital			518.7				454.8
Retained earnings			6,345.2				6,012.3
Accumulated other comprehensive loss			**(**29.1	)			(27.2	)
Common stock in treasury, at cost: 48,938,056 shares as of June 30, 2024 and 50,557,219 shares as of December 31, 2023			**(**2,823.0	)			(2,878.2	)
Total Stockholders' Equity			4,305.5				3,855.4
Total Liabilities and Stockholders' Equity		$	8,762.1			$	8,569.2

See Notes to Condensed Consolidated Financial Statements (Unaudited).

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(In millions)

	Six Months Ended
	June 30,			June 30,
	2024			2023
Cash Flow From Operating Activities
Net Income	$	471.2		$	424.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		38.8			34.6
Amortization expense		78.4			76.1
Deferred income taxes		**(**7.4	)		(1.9	)

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The following discussion of the Company’s financial condition and results of operations should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 14, 2024, and the unaudited condensed consolidated financial statements and related notes contained in this Quarterly Report on Form 10-Q.

Overview

We develop, manufacture and market a broad range of consumer household and personal care products and specialty products focused on animal and food production, chemicals and cleaners. Our well-recognized brands include ARM & HAMMER® baking soda, cat litter, laundry detergent, carpet deodorizer and other baking soda-based products; OXICLEAN® stain removers, cleaning solutions, laundry detergents and bleach alternatives; VITAFUSION® and L’IL CRITTERS® gummy dietary supplements for adults and children, respectively; BATISTE® dry shampoo; WATERPIK® water flossers and showerheads; THERABREATH® oral care products; HERO® acne treatment products; TROJAN® condoms, lubricants and vibrators; SPINBRUSH® battery-operated toothbrushes; FIRST RESPONSE® home pregnancy and ovulation test kits; NAIR® depilatories; ORAJEL® oral analgesic; XTRA® laundry detergent; and ZICAM® cold shortening and relief products. Seven of those brands are designated as "power brands" because they compete in large categories, and we believe they have the potential for significant global expansion. Those seven brands are ARM & HAMMER®; OXICLEAN®; VITAFUSION® and L’IL CRITTERS®; BATISTE®; WATERPIK®; THERABREATH®; and HERO® and represent approximately 70% of our net sales and profits.

We sell our consumer products through a broad distribution platform that includes supermarkets, mass merchandisers, wholesale clubs, drugstores, convenience stores, home stores, dollar and other discount stores, pet and other specialty stores and websites and other e-commerce channels, all of which sell our products to consumers. We sell our specialty products to industrial customers, livestock producers and through distributors.

We operate in three principal segments: Consumer Domestic, Consumer International, and our Specialty Products Division (“SPD”).

Recent Developments

On October 4, 2021, members of the Organisation for Economic Co-operation and Development (“OECD”) agreed to a global minimum tax rate of 15%. On December 20, 2021, OECD published its model rules on the agreed minimum tax known as the Global Anti-Base Erosion (“GloBE”) or Pillar Two rules. The Pillar Two rules are designed to be implemented into the domestic law of each jurisdiction to ensure large multinational enterprise groups are subject to a minimum effective tax rate of 15% in each jurisdiction where they operate. January 1, 2024 marked the official effective date of the 15% global corporate minimum tax imposed by the Pillar Two rules. Based on current legislation and available guidance, we have evaluated the impact of the Pillar Two rules and determined there is no impact to the Company.

During the first quarter of 2024, we exited the MEGALAC supplement portion of our Animal Nutrition business within our SPD segment. Net sales for the six months ended June 30, 2024 and 2023 were $7.6 and $21.6, respectively.

On June 3, 2024, we acquired substantially all of the issued and outstanding shares of capital stock of Graphico, Inc. ("Graphico"), a Japan-based distributor focused on consumer goods primarily in the Japanese market (the “Graphico Acquisition”). We paid $19.9, net of cash acquired, at closing. We acquired the remaining minority shares for approximately $2.0 in July 2024. Graphico’s annual net sales for the year ended December 31, 2023 were approximately $38.0. The Graphico Acquisition was financed with cash on hand, is expected to contribute to greater expansion of our business in the Asia-Pacific (APAC) region, and is managed in the Consumer International segment.

During the second quarter of 2024, we sold our Passport food safety business, Passport Food Safety Solutions, Inc., with assets of $7.0, inclusive of intangible assets of $2.7 and corresponding goodwill of $1.0, for cash proceeds of $6.6 and $0.5 held in escrow for a gain of $0.1.

During the second quarter of 2024, we received a favorable tariff ruling from the U.S. government associated with certain products imported from China. This ruling resulted in a $26.1 reduction of Cost of goods sold during the second quarter of 2024.

Other

For additional discussion, please refer to Item 1A, Risk Factors, and Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K.

Results of Operations

Consolidated results

	Three Months Ended				Change vs.		Three Months Ended
	June 30, 2024				Prior Year		June 30, 2023
Net Sales	$	1,511.2			3.9%		$	1,454.2
Gross Profit	$	712.1			11.5%		$	638.9
Gross Margin		47.1	%		320 basis points			43.9	%
Marketing Expenses	$	152.4			15.3%		$	132.2
Percent of Net Sales		10.1	%		100 basis points			9.1	%
Selling, General & Administrative Expenses	$	222.8			4.6%		$	213.1
Percent of Net Sales		14.7	%		10 basis points			14.6	%
Income from Operations	$	336.9			14.7%		$	293.6
Operating Margin		22.3	%		210 basis points			20.2	%
Net income per share - Diluted	$	0.99			11.2%		$	0.89
	Six Months Ended				Change vs.		Six Months Ended
	June 30, 2024				Prior Year		June 30, 2023
Net Sales	$	3,014.5			4.5%		$	2,884.0
Gross Profit	$	1,399.1			11.0%		$	1,260.9
Gross Margin		46.4	%		270 basis points			43.7	%
Marketing Expenses	$	304.4			19.6%		$	254.5
Percent of Net Sales		10.1	%		130 basis points			8.8	%
Selling, General & Administrative Expenses	$	452.8			7.6%		$	420.9
Percent of Net Sales		15.0	%		40 basis points			14.6	%
Income from Operations	$	641.9			9.6%		$	585.5
Operating Margin		21.3	%		100 basis points			20.3	%
Net income per share - Diluted	$	1.91			11.0%		$	1.72

Net Sales

Net sales for the quarter ended June 30, 2024 were $1,511.2, an increase of $57.0 or 3.9% as compared to the same period in 2023. Net sales for the six months ended June 30, 2024 were $3,014.5, an increase of $130.5 or 4.5% over the comparable six month period of 2023. The components of the net sales increase are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Net Sales - Consolidated	2024				2024
Product volumes sold(1)		3.5	%			3.6	%
Pricing/Product mix(2)		1.2	%			1.3	%
Foreign exchange rate fluctuations		(0.1	%)			0.1	%
Exit of product lines (net of acquisition)(3)		(0.7	%)			(0.5	%)
Net Sales increase		3.9	%			4.5	%

(1)

For both the three and six months ended June 30, 2024, the volume change reflects increased product unit sales in all three segments.

(2)

For the three months ended June 30, 2024, price/mix was favorable in the Consumer Domestic and Consumer International segments, partially offset by the SPD segment. For the six months ended June 30, 2024, price/mix was favorable in all three segments.

(3)

In the first quarter of 2024, we exited the MEGALAC supplement portion of the SPD Animal Nutrition business. In the second quarter of 2024 we acquired substantially all of Graphico and sold the Passport food safety business.

Gross Profit / Gross Margin

Our gross profit was $712.1 for the three months ended June 30, 2024, a $73.2 increase as compared to the same period in 2023. Gross margin increased 320 basis points (“bps”) in the second quarter of 2024 compared to the same period in 2023, due to a favorable tariff ruling of 180 bps, the impact of productivity programs of 120 bps, and favorable price/mix/volume of 80 bps, offset by the impact of higher manufacturing costs including labor and commodities of 50 bps and unfavorable foreign exchange of 10 bps. Gross profit was $1,399.1 for the six months ended June 30, 2024, a $138.2 increase compared to the same period in 2023. Gross margin increased 270 bps in the first six months of 2024 compared to the same period in 2023, due to the impact of productivity programs of 120 bps, favorable price/mix/volume of 110 bps, and a favorable tariff ruling of 90 bps, offset by the impact of higher manufacturing costs including labor and commodities of 40 bps and unfavorable foreign exchange of 10 bps.

Operating Expenses

Marketing expenses for the three months ended June 30, 2024 were $152.4, an increase of $20.2 or 15.3% as compared to the same period in 2023. Marketing expenses as a percentage of net sales in the second quarter of 2024 increased by 100 bps to 10.1% as compared to 9.1% in the same period in 2023 due to 130 bps on higher expense primarily from increased marketing spend to support new product introductions, offset by 30 bps of leverage on higher net sales. Marketing expenses for the six months ended June 30, 2024 were $304.4, an increase of $49.9 or 19.6% as compared to the same period in 2023. Marketing expenses as a percentage of net sales for the first six months of 2024 increased by 130 bps to 10.1% as compared to 8.8% in the same period in 2023 due to 170 bps on higher expense, primarily from increased marketing spend to support new product introductions, offset by 40 bps of leverage on higher net sales.

SG&A expenses were $222.8 in the second quarter of 2024, an increase of $9.7 or 4.6% as compared to the same period in 2023. SG&A as a percentage of net sales increased 10 bps to 14.7% in the second quarter of 2024 as compared to 14.6% in the same period in 2023. The increase is due to 60 bps on higher expenses, primarily due to growth investments in our international division, Research and Development ("R&D") and Information Technology ("IT"), and the Graphico acquisition, offset by 50 bps of leverage associated with higher sales. SG&A expenses for the first six months of 2024 were $452.8, an increase of $31.9 or 7.6% as compared to the same period in 2023. SG&A as a percentage of net sales increased 40 bps to 15.0% in the first six months of 2024 compared to 14.6% in 2023 due to 100 bps on higher expenses, primarily due to growth investments in our international division, R&D and IT, offset by 60 bps of leverage associated with higher sales.

Other income for the three and six months ended June 30, 2024 increased $2.0 and $3.7, respectively, as compared to the same periods in 2023, primarily due to higher investment income.

Interest expense for the three and six months ended June 30, 2024 decreased $4.7 and $8.5 to $23.2 and $48.2, respectively, as compared to the same periods in 2023, primarily due to lower average outstanding debt.

Income Taxes

The effective tax rate for the three months ended June 30, 2024 was 24.0%, compared to 17.9% in the same period in 2023. The effective tax rate for the six months ended June 30, 2024 was 22.1%, compared to 21.1% in the same period in 2023.

The increase in the tax rate for both periods is primarily from a lower tax benefit on reduced stock option exercises in 2024 compared to 2023.

Segment results

We operate three reportable segments: Consumer Domestic, Consumer International and SPD. These segments are determined based on differences in the nature of products and organizational structure. We also have a Corporate segment.

Segment			Products
Consumer Domestic			Household and personal care products
Consumer International			Primarily personal care products
SPD			Specialty chemical products

The Corporate segment income consists of equity in earnings of affiliates. As of June 30, 2024, we held 50% ownership interests in each of Armand and ArmaKleen, respectively. Our equity in earnings of Armand and ArmaKleen, totaling $3.1 and $2.0

for the three months ended June 30, 2024 and 2023, respectively, and $4.2 and $6.4 for the six months ended June 30, 2024 and 2023, respectively, are included in the Corporate segment. Certain subsidiaries that are included in the Consumer International segment manufacture and sell personal care products to the Consumer Domestic segment. These sales are eliminated from the Consumer International segment results set forth below.

Segment net sales and income before income taxes for the three and six months ended June 30, 2024 and June 30, 2023 are as follows:

	Consumer				Consumer
	Domestic				International				SPD				Corporate**(3)**				Total
Net Sales**(1)**
Second Quarter 2024	$	1,170.6			$	263.7			$	76.9			$	0.0			$	1,511.2
Second Quarter 2023		1,128.2				241.9				84.1				0.0				1,454.2
First Six Months of 2024	$	2,335.8			$	518.7			$	160.0			$	0.0			$	3,014.5
First Six Months of 2023		2,245.1				472.5				166.4				0.0				2,884.0
Income before Income Taxes**(2)**
Second Quarter 2024	$	273.2			$	32.9			$	11.3			$	3.1			$	320.5
Second Quarter 2023		230.7				27.5				9.2				2.0				269.4
First Six Months of 2024	$	512.4			$	65.9			$	22.1			$	4.2			$	604.6
First Six Months of 2023		459.4				56.4				16.0				6.4				538.2

(1)

Intersegment sales from Consumer International to Consumer Domestic, which are not reflected in the table, were $7.0 and $3.4 for the three months ended June 30, 2024 and June 30, 2023, respectively, and were $12.6 and $7.0 for the six months ended June 30, 2024 and June 30, 2023, respectively.

(2)

In determining income before income taxes, interest expense, investment earnings and certain aspects of other income and expense were allocated among the segments based upon each segment’s relative income from operations.

(3)

Corporate segment consists of equity in earnings of affiliates from Armand and ArmaKleen for the three and six months ended June 30, 2024 and June 30, 2023.

Product line revenues from external customers are as follows:

	Three Months Ended								Six Months Ended
	June 30,				June 30,				June 30,				June 30,
	2024				2023				2024				2023
Household Products	$	653.2			$	619.2			$	1,292.1			$	1,220.8
Personal Care Products		517.4				509.0				1,043.7				1,024.3
Total Consumer Domestic		1,170.6				1,128.2				2,335.8				2,245.1
Total Consumer International		263.7				241.9				518.7				472.5
Total SPD		76.9				84.1				160.0				166.4
Total Consolidated Net Sales	$	1,511.2			$	1,454.2			$	3,014.5			$	2,884.0

Household Products include laundry, deodorizing, and cleaning products. Personal Care Products include condoms, pregnancy kits, oral care products, skin care and hair care products, cold and remedy products, and gummy dietary supplements.

Consumer Domestic

Consumer Domestic net sales in the second quarter of 2024 were $1,170.6, an increase of $42.4 or 3.8% as compared to the same period in 2023. Consumer Domestic net sales for the six months ended June 30, 2024 were $2,335.8, an increase of $90.7 or 4.0% as compared to the same period in 2023. The components of the net sales change are the following:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
Net Sales - Consumer Domestic		2024				2024
Product volumes sold			3.3	%			3.3	%
Pricing/Product mix			0.5	%			0.7	%
Net Sales increase			3.8	%			4.0	%

The increase in net sales for the three months ended June 30, 2024, includes growth from THERABREATH® mouth wash, ARM & HAMMER® Cat Litter, HERO® acne treatment products, ARM & HAMMER® Liquid Detergent, and XTRA® liquid detergent, partially offset by declines in VITAFUSION® and L’IL CRITTERS® gummy dietary supplements, FINISHING TOUCH FLAWLESS® Hair Removal Products and WATERPIK® Shower Heads. The increase in net sales for the six-month period ending June 30, 2024, includes growth from THERABREATH® mouth wash, HERO® acne treatment products, ARM & HAMMER® Cat Litter, XTRA® liquid detergent, ARM & HAMMER® Liquid Detergent, and BATISTE® Dry Shampoo, partially offset by declines in VITAFUSION® and L’IL CRITTERS® gummy vitamins, WATERPIK® Shower Heads, and FINISHING TOUCH FLAWLESS® Hair Removal Products.

Consumer Domestic income before income taxes for the second quarter of 2024 was $273.2, a $42.5 increase as compared to the second quarter of 2023. The increase is primarily due to a favorable tariff ruling of $26.1, the impact of higher sales volumes of $21.1, the benefit of productivity programs of $16.4, favorable interest and other expenses of $4.1 and favorable price/mix of $0.8, partially offset by higher marketing expenses of $15.1, higher SG&A expenses of $12.0 and higher manufacturing and distribution expenses of $2.6. For the six-month period ended June 30, 2024, income before income taxes was $512.4, a $53.0 increase as compared to the first six months of 2023. The increase is due primarily to the impact of higher sales volumes of $42.0, a favorable tariff ruling of $26.1, the benefit of productivity programs of $34.6, favorable interest and other expenses of $11.6 and favorable price/mix of $10.0, partially offset by higher marketing expenses of $39.8, higher SG&A expenses of $31.7 and higher manufacturing and distribution expenses of $1.9.

Consumer International

Consumer International net sales were $263.7 in the second quarter of 2024, an increase of $21.8 or 9.0% as compared to the same period in 2023. Consumer International net sales in the first six months of 2024 were $518.7, an increase of $46.2 or 9.8% as compared to the same period in 2023. The components of the net sales change are the following:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
Net Sales - Consumer International		2024				2024
Product volumes sold			4.6	%			5.1	%
Pricing/Product mix			4.7	%			4.0	%
Foreign exchange rate fluctuations			(0.4	%)			0.6	%
Acquired product line(1)			0.1	%			0.1	%
Net Sales increase			9.0	%			9.8	%

(1)

The Graphico acquisition is included in our results since June 1, 2024, the date of acquisition.

Excluding the impact of foreign exchange rates, sales growth in the second quarter ended June 30, 2024 was driven by VITAFUSION® and L’IL CRITTERS® gummy vitamins, THERABREATH® mouth wash, STERIMAR® nasal congestion relief, OXICLEAN® stain removers and ARM & HAMMER® Baking Soda in GMG, HERO® acne treatment products and WATERPIK® Flossers in Canada, ARM & HAMMER® Liquid Detergent and STERIMAR® nasal congestion relief in Mexico, and HERO® acne treatment products in Europe and Australia. The increase in net sales for the six-month period ending June 30,2024, was driven by STERIMAR® nasal congestion relief, and VITAFUSION® and L’IL CRITTERS® gummy vitamins in GMG, STERIMAR® nasal

congestion relief and ARM & HAMMER® Liquid Detergent in Mexico, HERO® acne treatment products and ANUSOL in Europe, HERO® acne treatment products and WATERPIK® Flossers in Canada, and HERO® acne treatment products in Australia.

Consumer International income before income taxes was $32.9 in the second quarter of 2024, a $5.4 increase as compared to the second quarter of 2023. The increase is due primarily to a favorable price/mix of $11.7, the impact of higher sales volumes of $4.5, and favorable interest and other expenses of $0.6, partially offset by higher marketing expenses of $5.7, higher SG&A expenses of $4.3 (including Graphico), unfavorable foreign exchange rates of $1.5 and higher manufacturing and commodity costs of $0.2. For the first six months of 2024, income before income taxes was $65.9, an $9.5 increase as compared to the same period in 2023. The increase is due primarily to a favorable price/mix of $22.0, the impact of higher sales volumes of $10.9, and favorable interest and other expenses of $0.6, partially offset by higher marketing expenses of $11.8, higher SG&A expenses of $11.2 (including Graphico), unfavorable foreign exchange rates of $0.9 and higher manufacturing and distribution expenses of $0.3.

Specialty Products (“SPD”)

SPD net sales were $76.9 in the second quarter of 2024, a decrease of $7.2 or 8.6% as compared to the same period in 2023. SPD net sales were $160.0 for the first six months of 2024, a decrease of $6.4, or 3.8% as compared to the same period in 2023. The components of the net sales change are the following:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
Net Sales - SPD		2024				2024
Product volumes sold			4.1	%			3.5	%
Pricing/Product mix			(0.2	%)			2.0	%
Exit of product lines (1)			(12.5	%)			(9.3	%)
Net Sales decrease			(8.6	%)			(3.8	%)

(1)

We exited the MEGALAC supplement portion of the Animal Nutrition business in the first quarter of 2024 and sold the Passport food safety business in the second quarter of 2024.

Net sales excluding product line divestitures increased in the three and six months ended June 30, 2024 primarily due to strong growth internationally for our animal nutrition segment and domestically for our specialty chemicals segment.

SPD income before income taxes was $11.3 in the second quarter of 2024, an increase of $2.1 as compared to the same period in 2023 due to lower SG&A and other costs of $1.3, favorable manufacturing costs of $0.8, and lower marketing costs of $0.4, partially offset by lower volumes of $0.3 (including the exit of MEGALAC) and unfavorable price/mix of $0.2. SPD income before income taxes was $22.1 in the first six months of 2024, an increase of $6.1 as compared to the same period in 2023 due primarily to favorable price/product mix of $3.2, lower marketing expenses of $1.5, lower SG&A and other costs of $1.4 and the impact of higher sales volumes of $0.9 (including the exit of MEGALAC), partially offset by unfavorable manufacturing costs of $0.8.

The Corporate segment includes equity in earnings of affiliates from Armand and ArmaKleen in the three and six months of 2024 and 2023. The Corporate segment income before income taxes was $3.1 in the second quarter of 2024, as compared to $2.0 in the same period in 2023. The Corporate segment income before income taxes was $4.2 for the first six months of 2024, as compared to $6.4 in the same period in 2023.

Liquidity and Capital Resources

On June 16, 2022, we entered into a credit agreement (the “Credit Agreement”) that provides for our $1,500.0 unsecured revolving credit facility (the “Revolving Credit Facility”) that matures on June 16, 2027, unless extended. We have the ability to increase our borrowing up to an additional $750.0, subject to lender commitments and certain conditions as described in the Credit Agreement. Borrowings under the Credit Agreement are available for general corporate purposes and are used to support our $1,500.0 commercial paper program.

As of June 30, 2024, we had $491.7 in cash and cash equivalents, and approximately $1,495.0 available through the Revolving Credit Facility and our commercial paper program. To preserve our liquidity, we invest cash primarily in government money market funds, prime money market funds, short-term commercial paper and short-term bank deposits.

In the first quarter of 2024, we repaid the remaining $200.0 of our Term Loan due December 22, 2024 with cash on hand.

The current economic environment presents risks that could have adverse consequences for our liquidity. See “Unfavorable economic conditions could adversely affect demand for our products” under “Risk Factors” in Item 1A of the Form 10-K. We continue to manage all aspects of our business including, but not limited to, monitoring the financial health of our customers, suppliers and other third-party relationships, implementing gross margin enhancement strategies and developing new opportunities for growth. We do not anticipate that current economic conditions will adversely affect our ability to comply with the financial covenant in the Credit Agreement. We currently are, and anticipate that we will continue to be, in compliance with the maximum leverage ratio requirement under the Credit Agreement.

On October 28, 2021, the Board authorized the Company’s share repurchase program, under which we may repurchase up to $1,000.0 in shares of Common Stock (the “2021 Share Repurchase Program”). The 2021 Share Repurchase Program does not have an expiration and replaced the 2017 Share Repurchase Program. The 2021 Share Repurchase Program did not modify our evergreen share repurchase program, authorized by the Board on January 29, 2014, under which we may repurchase, from time to time, Common Stock to reduce or eliminate dilution associated with issuances of Common Stock under our incentive plans. There have been no stock repurchases in 2024 under the 2021 Share Repurchase Program.

As of June 30, 2024, there remains $658.9 of share repurchase availability under the 2021 Share Repurchase Program.

On January 31, 2024, the Board declared a 4% increase in the regular quarterly dividend from $0.2725 to $0.28375 per share, equivalent to an annual dividend of $1.135 per share, payable to stockholders of record as of February 15, 2024. The increase raises the annual dividend payout from $267.0 to approximately $276.0 on an annualized basis.

We anticipate that our cash from operations, together with our current borrowing capacity, will be sufficient to fund our share repurchase programs to the extent implemented by management, pay debt and interest as it comes due, pay dividends at the latest approved rate, and meet our capital expenditure program costs, which are expected to be approximately $180.0 in 2024 primarily for manufacturing capacity investments in laundry and litter to support expected future sales growth. Cash, together with our current borrowing capacity, may be used for acquisitions that would complement our existing product lines or geographic markets.

Cash Flow Analysis

	Six Months Ended
	June 30,				June 30,
	2024				2023
Net cash provided by operating activities	$	499.9			$	509.2
Net cash used in investing activities	$	(91.5	)		$	(69.2	)
Net cash used in financing activities	$	(257.4	)		$	(315.4	)

Net Cash Provided by Operating Activities – Our primary source of liquidity is the cash flow provided by operating activities, which is dependent on net income and changes in working capital. Our net cash provided by operating activities in the six months ended June 30, 2024 decreased by $9.3 to $499.9 as compared to $509.2 in the same period in 2023 as an increase in cash earnings (net income adjusted for non-cash items) was more than offset by higher working capital. The higher working capital is primarily related to higher accounts receivable balances as we reduced our accounts receivable factoring program in response to higher interest rates and the tariff refund receivable. In addition, we had higher incentive compensation payments in 2024 compared to 2023. We measure working capital effectiveness based on our cash conversion cycle. The following table presents our cash conversion cycle information for the quarters ended June 30, 2024 and 2023:

	As of
	June 30, 2024				June 30, 2023				Change
Days of sales outstanding in accounts receivable ("DSO")		34				28				6
Days of inventory outstanding ("DIO")		67				73				(6	)
Days of accounts payable outstanding ("DPO")		72				73				1
Cash conversion cycle		29				28				1

Our cash conversion cycle (defined as the sum of DSO and DIO less DPO) which is calculated using a two-period average method, increased one day from the prior year. The increase in DSO is related to a reduction in our accounts receivable factoring program in response to higher interest rates and the tariff refund receivable. The decrease in DIO is a result of the timing of inventory purchases for most of our brands and a reduction in inventory purchases related to our discretionary brands. We continue to focus on reducing our working capital requirements.

Net Cash Used in Investing Activities – Net cash used in investing activities during the first six months of 2024 was $91.5, primarily reflecting $76.6 for property, plant and equipment additions and $19.9 for the Graphico Acquisition, partially offset by $6.6 of proceeds from the sale of assets. Net cash used in investing activities during the first six months of 2023 was $69.2, primarily reflecting $63.2 for property, plant and equipment additions.

Net Cash Used in Financing Activities – Net cash used in financing activities during the first six months of 2024 was $257.4 reflecting $197.7 of net debt payments and $138.2 of cash dividend payments, partially offset by $79.5 of proceeds from stock option exercises. Net cash used in financing activities during the first six months of 2023 was $315.4 reflecting $270.6 of net debt payments and $133.0 of cash dividend payments, partially offset by $88.3 of proceeds from stock option exercises.

Market risk

For quantitative and qualitative disclosures about market risk affecting the Company, see “Quantitative and Qualitative Disclosures About Market Risk” in Item 7A of Part II in the Form 10-K.

a) Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) at the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this report, are effective to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission (the “Commission”), and (ii) accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding the disclosure.

b) Change in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurring during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

CAUTIONARY NOTE ON FORWARD-LOOKING INFORMATION

This report contains forward-looking statements, including, among others, statements relating to net sales and earnings growth; gross margin changes; trade and marketing spending; marketing expense as a percentage of net sales; sufficiency of cash flows from operations; earnings per share; the impact of new accounting pronouncements; cost savings programs; recessionary conditions; interest rates; inflation; consumer demand and spending; the effects of competition; the effect of product mix; volume growth, including the effects of new product launches into new and existing categories; the decline of condom usage; the Company’s hedge programs; the impact of foreign exchange, and commodity price fluctuations; impairments and other charges; the Company’s investments in joint ventures; the impact of acquisitions and divestitures; capital expenditures; the Company’s effective tax rate; the

impact of tax audits; tax changes; the effect of the credit environment on the Company’s liquidity and capital resources; the Company’s fixed rate debt; compliance with covenants under the Company’s debt instruments; the Company’s commercial paper program; the Company’s current and anticipated future borrowing capacity to meet capital expenditure program costs; the Company’s share repurchase programs; payment of dividends; environmental and regulatory matters; the availability and adequacy of raw materials, including trona reserves and the conversion of such reserves; and the customers and consumer acceptance of certain ingredients in our products. Other forward-looking statements in this report are generally identified by the use of such terms as “may,” “could,” “expect,” “intend,” “believe,” “plan,” “estimate,” “forecast,” “project,” “anticipate,” “to be,” “to make” or other comparable terms. These statements represent the intentions, plans, expectations and beliefs of the Company, and are based on assumptions that the Company believes are reasonable but may prove to be incorrect. In addition, these statements are subject to risks, uncertainties and other factors, many of which are outside the Company’s control and could cause actual results to differ materially from such forward-looking statements. Factors that could cause such differences include a decline in market growth, retailer distribution and consumer demand (as a result of, among other things, political, economic and marketplace conditions and events), including those relating to the outbreak of contagious diseases; the impact of new legislation such as the U.S. CARES Act, the EU Medical Device Regulation, new cosmetic and device regulations in Mexico, and the U.S. Modernization of Cosmetic Regulation Act; the impact on the global economy of the Russia/Ukraine war or increased conflict in the Middle East, including the impact of export controls and other economic sanctions; potential recessionary conditions or economic uncertainty; the impact of continued shifts in consumer behavior, including accelerating shifts to on-line shopping; unanticipated increases in raw material and energy prices, including as a result of the Russia/Ukraine war or conflict in the Middle East; delays and increased costs in manufacturing and distribution; increases in transportation costs; labor shortages; the impact of price increases for our products; the impact of inflationary conditions; the impact of supply chain and labor disruptions; the impact of severe weather on raw material and transportation costs; adverse developments affecting the financial condition of major customers and suppliers; competition; changes in marketing and promotional spending; growth or declines in various product categories and the impact of customer actions in response to changes in consumer demand and the economy, including increasing shelf space or on-line share of private label and retailer-branded products or other changes in the retail environment; consumer and competitor reaction to, and customer acceptance of, new product introductions and features; the Company’s ability to maintain product quality and characteristics at a level acceptable to our customers and consumers; disruptions in the banking system and financial markets; the Company’s borrowing capacity and ability to finance its operations and potential acquisitions; higher interest rates; foreign currency exchange rate fluctuations; transition to, and shifting economic policies in the United States; potential changes in export/import and trade laws, regulations and policies of the United States and other countries, including any increased trade restrictions; increased or changing regulation regarding the Company’s products and its suppliers in the United States and other countries where it or its suppliers operate; market volatility; issues relating to the Company’s information technology and controls; the impact of natural disasters, including those related to climate change, on the Company and its customers and suppliers, including third party information technology service providers; integrations of acquisitions or divestiture of assets; the outcome of contingencies, including litigation, pending regulatory proceedings and environmental matters; and changes in the regulatory environment in the countries where we do business.

The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the United States federal securities laws. You are advised, however, to consult any further disclosures the Company makes on related subjects in its filings with the United States Securities and Exchange Commission (the “Commission”).

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

General

The Company, in the ordinary course of its business, is subject of, or party to, various pending or threatened legal actions, government investigations and proceedings from time to time, including, without limitation, those relating to commercial transactions, product liability, purported consumer class actions, employment matters, antitrust, environmental, health, safety and other compliance related matters. Such proceedings are subject to many uncertainties and the outcome of certain pending or threatened legal actions may not be reasonably predictable and any related damages may not be estimable. Certain legal actions could result in an adverse outcome for us, and any such adverse outcome could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Item 1A, “Risk Factors” in the Form 10-K, which could materially affect the Company’s business, financial condition or future results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company repurchases shares of its Common Stock from time to time pursuant to its publicly announced share repurchase programs.

During the second quarter of 2024 the Company did not repurchase any shares of Common Stock pursuant to its share repurchase programs. The following table contains information for shares repurchased during the second quarter of 2024, which was solely due to shares of Common Stock withheld by the Company to satisfy tax withholding obligations in connection with the vesting of restricted stock.

As a result of the Company’s stock repurchases, there remains $658.9 of share repurchase availability under the 2021 Share Repurchase Program as of June 30, 2024.

Period		Total Number of Shares Purchased				Average Price Paid per Share				Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs				Approximate Dollar Value of Shares that May Yet Be Purchased Under All Programs
4/1/2024 to 4/30/2024			8,977			$	100.32				-			$	658,905,959
5/1/2024 to 5/31/2024			-				-				-			$	658,905,959
6/1/2024 to 6/30/2024			370				102.70				-			$	658,905,959
Total			9,347			$	100.41				-

ITE****M 5. OTHER INFORMATION

Securities Trading Plans of Directors and Executive Officers

During the three months ended June 30, 2024, none of our directors or executive officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company's securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.” (as defined in Item 408(a) of Regulation S-K).

ITE****M 6. EXHIBITS

Exhibit Index

		(3.1)		Amended and Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Company’s quarterly report on Form 10-Q filed on June 30, 2020.
		(3.2)		Amendment to the Company’s Amended and Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K filed on April 30, 2021.
		(3.3)		Amendment to the Company’s Amended and Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K filed on May 6, 2024.
		(3.4)		By-laws of the Company, amended and restated as of April 27, 2023, incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K filed on April 28, 2023.
		(21)		List of the Company’s subsidiaries, incorporated by reference to Exhibit 21 to the Company’s current report on Form 8-K filed on May 17, 2024.
		(31.1)		Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act.
		(31.2)		Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act.
		(32.1)		Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350.
		(32.2)		Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350.
		(101.INS)		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
		(101.SCH)		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
		(104)		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

Indicates documents filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

				CHURCH & DWIGHT CO., INC.
				(REGISTRANT)
DATE:		August 2, 2024		/s/ Richard A. Dierker
				RICHARD A. DIERKER
				Executive Vice President
				and Chief Financial Officer
				(Principal Financial Officer)
DATE:		August 2, 2024		/s/ Joseph J. Longo
				JOSEPH J. LONGO
				VICE PRESIDENT AND
				CONTROLLER
				(PRINCIPAL ACCOUNTING OFFICER)