CHD Q3 Deep Dive: Value Brands, Premium Personal Care, and Acquisition Momentum Support Results

Household products company Church & Dwight (NYSE:CHD) announced better-than-expected revenue in Q3 CY2025, with sales up 5% year on year to $1.59 billion. The company expects next quarter’s revenue to be around $1.64 billion, close to analysts’ estimates. Its non-GAAP profit of $0.81 per share was 9.9% above analysts’ consensus estimates.

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StockStory’s Take

Church & Dwight delivered a notably positive third quarter, with management attributing performance to broad-based share gains across both value and premium products. CEO Richard Dierker emphasized the success of ARM & HAMMER in value laundry, as well as strong growth from personal care brands like THERABREATH and HERO. The recent acquisition of TOUCHLAND, which exceeded early expectations in the hand sanitizer category, also contributed to the company’s outperformance. Dierker noted, "Our innovation is performing well and all in all, our brands are made for environments like this," highlighting the company’s ability to navigate a challenging consumer landscape with a balanced portfolio.

Looking ahead, management expects continued momentum from innovation and increased marketing investments, especially as TOUCHLAND and other premium brands expand their reach. Dierker outlined that the upcoming launch of new THERABREATH toothpaste variants and further growth in international markets are central to sustaining performance. CFO Lee McChesney added that higher marketing spend, now targeted above 11% of sales, aims to build on this momentum into 2026. Dierker stated, "We're excited about our pipeline of new products...they're a key driver of our success," while reaffirming the company’s commitment to disciplined execution in an uncertain macro environment.

Key Insights from Management’s Remarks

Management pointed to share gains in both value and premium products, strong performance from recent acquisitions, and strategic investments in innovation and marketing as the main drivers of the quarter's results.

• TOUCHLAND acquisition outperformance: The recently acquired TOUCHLAND brand saw double-digit growth and exceeded internal expectations, with strong traction at Sephora, Ulta, and Amazon. Management views TOUCHLAND as having substantial runway for growth, given its low household penetration in a large category.
• ARM & HAMMER value positioning: ARM & HAMMER laundry and litter products continued to grow share, driven by consumer shifts toward value brands. Despite reduced promotional spending, ARM & HAMMER liquid laundry achieved increased household penetration and outpaced a flat category.
• Premium brand momentum: Personal care brands like THERABREATH and HERO delivered significant growth, with THERABREATH mouthwash consumption up 17% even as the overall category declined. HERO continued to lead in acne care, benefiting from low household penetration relative to the category.
• Strategic review of vitamin business: Management is evaluating options for the underperforming vitamin segment, including supply chain streamlining, joint ventures, or divestiture. Some "green shoots" have emerged, but the segment remains a drag on growth and price/mix.
• International and product innovation: International sales grew 8.4% year over year, led by HERO, THERABREATH, and BATISTE, with broad-based growth across markets. New product launches, such as THERABREATH toothpaste and TROJAN G.O.A.T. condoms, are expected to sustain brand momentum into upcoming quarters.

Drivers of Future Performance

Church & Dwight’s outlook is shaped by ongoing innovation, continued marketing investment, and shifts in consumer behavior toward value and premium offerings.

• Increased marketing to drive growth: Management plans to raise marketing spend above 11% of sales, leveraging improved sales and margin performance to fuel product launches and brand awareness, particularly for new and acquired brands like TOUCHLAND and expanded THERABREATH lines.
• Product pipeline and innovation: Upcoming rollouts, including retail launches of THERABREATH toothpaste and further ARM & HAMMER laundry innovation, are expected to support volume and share gains in both value and premium segments. Management sees innovation as essential for maintaining long-term growth outpacing category averages.
• Risks from macro and category trends: The unstable consumer environment and increased promotional activity in some categories present risks. Management also highlighted the ongoing strategic review of the vitamin business and potential commodity and tariff impacts, though recent productivity gains have mitigated some margin pressures.

Catalysts in Upcoming Quarters

In the coming quarters, our team will be monitoring (1) the continued integration and sales trajectory of TOUCHLAND, (2) household penetration and share gains for key brands like ARM & HAMMER and THERABREATH, and (3) progress on the strategic review and potential restructuring of the vitamin business. Execution of new product launches and navigation of evolving consumer value trends will also be important markers for sustained momentum.

Church & Dwight currently trades at $85.18, up from $81.77 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).

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