Church & Dwight Co., Inc. (NYSE:CHD) Q2 2023 Earnings Call Transcript

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Chris Carey: Okay. Thanks so much.

Matt Farrell: Yes.

Operator: Your next question comes from Rupesh Parikh from Oppenheimer. Please go ahead.

Rupesh Parikh: Good morning. Thanks for taking that question. Also, congrats on a really nice quarter.

Matt Farrell: Yes. Thanks.

Rupesh Parikh: So just going back to your comment here in the U.S. consumer business where I think you gained six – share on six – gain to maintain share on six out of your 14 power brands category. How are you thinking about this for the balance of year? Do you expect that metric to improve as we get to Q3 and Q4, especially as maybe some of your advertising picks up?

Rick Dierker: Hey, Rupesh, we do think we’re going to improve that as we go through the year as our marketing investments behind it. As our fill levels comp year-over-year are comparable. But I think even a better metric is instead of 6 of 14, we’ve been talking about 65% of our net sales have gained share. So that’s our large brands are winning.

Matt Farrell: Yes. And Rupesh, some of the categories in personal care that, that are down or like battery pregnancy test kits, cold shortening, these are small categories, so but they count as one of the 14. So we’re trying to get the focus more on the big brands and how they’re performing.

Rupesh Parikh: Okay. Great. And then given we’ve seen margins approved not only for you guys, but also other players out there just curious what you’re seeing the competitor promotional backdrop right now, then just how you think about the promotional environment for the balance of the year.

Matt Farrell: Yes. Well, look, as far as promotions go, generally the conversation goes around household. So if you look at the laundry category in total, it’s sequentially, it’s up about 80, 90 bps from Q1 to Q2. And if you look at liquid laundry detergent, that’s up a couple of hundred basis points in sold on deal from Q1 to Q2. On the other hand, if you look at unit dose sequentially, it’s down 340 basis points from Q1 to Q2. So all in, I’d say if you look at the laundry category in total, it’s not any – not significantly more promotional in Q2 than Q1. And then if you look at laundry, or pardon me, a litter sold on deal, just the last few quarters, it’s been pretty steady. It’s been around 15% sold on deal.

So I would – and then the last one would be a vitamin business VMS. That actually is, it’s less promotional in Q2 than Q1. So I would say that from where we sit and we look at our most promotional categories, we think it’s that things are pretty steady.

Rupesh Parikh: Okay. Great. Thank you. I’ll pass it along.

Matt Farrell: Okay.

Operator: Hey, your next question comes from Peter Grom from UBS. Please go ahead.

Bryan Adams: Good morning, guys. This is Bryan Adams on for Peter. Thanks for taking a question. So just looking at the implied I think you said up to or the back half that implies around up to 2.2% or a little over 2% growth in volumes in the second half. Should we be thinking about that as a sequential build or is it more just looking at the year ago comparisons with how challenging 3Q was? Is it reasonable to expect that 3Q volumes might be on par or even above that of 4Q?

Rick Dierker: Yes. Hey, Bryan. We’ve kind of said up to 50% in the second half is going to be volume driven. We think that is impactful. It inflects positively, I think because of the comp, maybe Q3 is a little bit better than Q4.

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