Church & Dwight revises growth forecast on tariff challenges; plans strategic actions

(Reuters) -Church & Dwight joined its peers with a dour forecast due to the impact of tariffs, and announced strategic actions, including shutting or selling less profitable businesses, sending its shares down 5% in premarket trading.

The company expects a Q2 charge of $60–80 million, mainly from non-cash asset impairments and inventory charges tied to sell-through.

WHY IT’S IMPORTANT?

Church & Dwight (NYSE:CHD), which sources products such as Waterpik flossers from China for the U.S. market, has now taken a significant hit from global trade war sparked by President Trump’s sweeping import tariffs.

The company said it expects about $190 million in gross tariff exposure on a 12-month run-rate basis.

U.S. economy shrunk for the first time in three years in the first quarter, signaling that consumers have cut back spending on expensive items as they brace for a surge in product prices.

CONTEXT

Church & Dwight is experiencing rising manufacturing costs and lower sales from its biggest consumer domestic segment, offsetting gains from recent price hikes.

Peers including Procter & Gamble (NYSE:PG) as well as Kimberly-Clark (NYSE:KMB) also provided dour annual profit forecasts.

KEY QUOTE

"In the first quarter, the Domestic Division declined 3.0% organically, as retailers reduced inventory levels and consumption slowed," said CEO Rick Dierker.

Trojan condom maker said it can offset remaining tariffs through supply chain tweaks and selective pricing.

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BY THE NUMBERS

Oxiclean maker projects annual organic sales growth to range from flat to a 2% increase, compared with the prior forecast 3% to 4% rise.

It also expects annual adjusted earnings per share to remain flat or increase by up to 2%, compared with the prior forecast of 7% to 8% growth.

Church & Dwight’s net sales of $1.47 billion, missed the analysts’ estimate of $1.51 billion, as per data compiled by LSEG.

Its adjusted profit of 91 cents per share edged past estimates of 90 cents.

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