CHURCH DWIGHT CO INC DE
For the period ended Mar 31, 2025. Filed May 1, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 1, 2025
CHD$109.33-1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-01.
0000950170-24-120026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0000950170-25-061624
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 76 previous paragraphs and 65 current paragraphs.
24 unchanged; 25 reworded; 16 added; 27 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
Global Economic Conditions and Trade Policies
Current report
We are experiencing increased supply chain challenges, commodity cost volatility, and consumer and economic uncertainty primarily due to rapid changes in U.S. trade policies including recent sweeping tariff increases, as well as retaliatory tariffs by foreign countries. This global uncertainty has also resulted in product purchase cancellations and boycotts by customers and consumers globally. Additionally, U.S. consumers are increasingly worried about persistent inflation and looming tariffs, leading them to cut back on discretionary spending. We believe that retailers are lowering their consumer-packaged goods inventories and making targeted decisions to build inventory of certain products in advance of additional tariffs. We will continue to evaluate these evolving developments and have begun to take action to mitigate their impact on our business, including taking strategic actions for certain business lines (see Strategic Business Decisions), shifting production and relocating manufacturing operations, finding alternative sources of supply, most notably ceasing the import of Waterpik flossers from China into the U.S., potential price increases, adjusting inventories, lobbying and seeking exemptions with respect to tariffs. While the tariff situation remains fluid, we are focused on managing through these challenges. From a gross risk perspective, we are currently projecting a twelve-month run-rate gross tariff exposure of approximately $190.0. We expect that the impact of our strategic business decisions and a series of rapid supply chain actions, such as ceasing the import of Waterpik flossers from China into the U.S., will reduce our tariff exposure by approximately 80%. Over the next 12 months, we believe our remaining tariff exposure can be mitigated through additional supply chain efforts and surgical pricing.
Current report
Strategic Business Decisions
Current report
On May 1, 2025, we announced that we will be taking strategic actions for the Flawless, Spinbrush and Waterpik showerhead businesses, which includes shutting down or selling these businesses. These businesses generate approximately $150.0 of annual Net Sales. We expect to record a charge of $60.0 to $80.0 in the second quarter of 2025 as a direct result of these actions, primarily comprised of non-cash charges related to impairments of intangible and fixed assets, as well as inventory reserves.
Current report
(1)The volume change reflects decreased product unit sales in the Consumer Domestic segment, partially offset by increased product unit sales in the Consumer International and SPD segments.
Current report
(2) Price/mix was favorable in the Consumer Domestic and SPD segments, partially offset by the Consumer International segment.
Current report
Marketing expenses for the three months ended March 31, 2025 were $136.6, a decrease of $15.4 or 10.1% as compared to the same period in 2024. Marketing expenses as a percentage of net sales in the first quarter of 2025 decreased by 80 bps to 9.3% as compared to 10.1% in the same period in 2024 due to 100 bps on lower expense primarily due to marketing program timing.
Current report
SG&A expenses were $227.7 in the first quarter of 2025, a decrease of $2.3 or 1.0% as compared to the same period in 2024. SG&A as a percentage of net sales increased 20 bps to 15.5% in the first quarter of 2025 as compared to 15.3% in the same period in 2024. The increase is due to 40 bps from lower sales partially offset by 20 bps on lower expenses. The lower expenses for the three-month period ended March 31, 2025 compared to 2024 are primarily due to lower expense on Company issued equity awards.
Current report
The effective tax rate for the three months ended March 31, 2025 was 22.0%, compared to 19.9% in the same period in 2024. The increase in the tax rate is primarily from a lower tax benefit on reduced stock option exercises in 2025 compared to 2024.
Current report
The decrease in net sales for the three months ended March 31, 2025, includes declines from VITAFUSION® and L’IL CRITTERS® gummy dietary supplements, OXICLEAN® Stain Fighters and ARM & HAMMER® cat litter, partially offset by growth from THERABREATH® mouth wash and ZICAM® cold shortening and relief products.
Current report
Consumer Domestic income from operations for the first quarter of 2025 was $244.8, a decrease of $12.7 as compared to the first quarter of 2024. The decrease is due primarily to higher manufacturing and distribution expenses of $25.4, the impact of lower sales volumes of $22.2, and unfavorable price/mix of $3.4, partially offset by the benefit of productivity programs of $20.6, lower marketing expenses of $14.1, and lower SG&A expenses of $3.6.
Current report
Excluding the impact of foreign exchange rates, sales growth is driven by ARM & HAMMER® Liquid Detergent, THERABREATH® mouth wash, NAIR® depilatories, and ARM & HAMMER® dental care in Mexico, HERO® acne treatment products, WATERPIK® Flossers and THERABREATH® mouth wash in Canada, HERO® acne treatment products, BATISTE® Dry Shampoo and ANUSOL in Europe, and HERO® acne treatment products in Australia.
Current report
Consumer International income from operations was $37.7 in the first quarter of 2025, an increase of $1.8 as compared to the first quarter of 2024. The increase is due primarily to favorable product mix of $7.5, the impact of higher sales volumes of $7.2, and lower marketing expenses of $1.7, partially offset by unfavorable foreign exchange rates of $7.8, higher manufacturing and commodity costs of $3.5, and higher SG&A expenses of $3.2.
Current report
SPD income from operations was $12.8 in the first quarter of 2025, an increase of $1.2 as compared to the same period in 2024, due to favorable price/product mix of $2.1 and favorable SG&A expenses of $2.1 mainly from divestitures, partially offset by the impact of lower sales volumes of $1.9 and unfavorable manufacturing costs of $1.1.
Current report
Equity in Earnings of Affiliates
Current report
Equity in earnings of affiliates represents the results of Armand in the first three months of 2025 and 2024 and ArmaKleen in the first three months of 2024. In October 2024, the Company sold its 50% interest in ArmaKleen to our joint venture partner.
Removed paragraphs (27)
Previous report
In October 2021, members of the Organisation for Economic Co-operation and Development (“OECD”) agreed to a global minimum tax rate of 15%. In December 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. In December 2022, the European Union (“EU”) Member States formally adopted the EU’s Pillar Two Directive. January 1, 2024 marked the official effective date of the 15% global corporate minimum tax imposed by the EU's Pillar Two Directive. We are monitoring developments and evaluating the impacts of the Pillar Two rules on our tax rate. We have evaluated the impact of the Pillar Two rules based on current legislation and available guidance, and do not anticipate a material impact to the Company.
Previous report
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 three months ended September 30, 2024 and 2023 were $0.0 and $8.1, respectively. Net sales for the nine months ended September 30, 2024 and 2023 were $7.6 and $29.7, respectively.
Previous report
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.
Previous report
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. Net sales for the three months ended September 30, 2024 and 2023 were $0.0 and $3.3, respectively. Net sales for the nine months ended September 30, 2024 and 2023 were $6.4 and $9.2, respectively.
Previous report
During the second quarter of 2024, we received a favorable tariff ruling from the U.S. government associated with certain products imported from China, which resulted in $37.6 of cash refunds (pre tax) in the nine months ended September 30,2024. The refunds resulted in a $3.2 and $29.3 reduction of Cost of goods sold during the three and nine months ended September 30, 2024 and an increase in Interest income from interest of $4.6 during both the three and nine months ended September 30, 2024.
Previous report
During the third quarter of 2024, the Company continued to experience a decline in market share and a deterioration in the financial performance for its Vitamins, Minerals and Supplements ("VMS") business, which includes the VITAFUSION and L'IL CRITTERS tradename, primarily due to significant product competition coming from new category entrants, including private label. The continued decline in profitability has caused management to reassess its long-term strategy and financial outlook of the business. The revised financial outlook reflects lower estimates of future sales growth and cash flows resulting in a triggering event in the third quarter. The triggering event requires the Company to review the carrying value of assets supporting the business resulting in impairment charges of $357.1 in the quarter ended September 30, 2024.
Previous report
The Company’s 50% interest in The Armakleen Company was sold to an unrelated third party in October of 2024. The transaction is not material to the Company’s results of operations or cash flows.
Previous report
For both the three and nine months ended September 30, 2024, the volume change reflects increased product unit sales in all three segments.
Previous report
For both the three and nine months ended September 30, 2024, price/mix was favorable in all three segments.
Previous report
Marketing expenses for the three months ended September 30, 2024 were $185.8, an increase of $18.0 or 10.7% as compared to the same period in 2023. Marketing expenses as a percentage of net sales in the third quarter of 2024 increased by 80 bps to 12.3% as compared to 11.5% in the same period in 2023 due to 120 bps on higher expense primarily from increased marketing spend to support new product introductions, offset by 40 bps of leverage on higher net sales. Marketing expenses for the nine months ended September 30, 2024 were $490.2, an increase of $67.9 or 16.1% as compared to the same period in 2023. Marketing expenses as a percentage of net sales for the first nine months of 2024 increased by 110 bps to 10.8% as compared to 9.7% in the same period in 2023 due to 150 bps on higher expense, primarily from increased marketing spend to support new product introductions, offset by 40 bps of leverage on higher net sales.
Previous report
SG&A expenses were $231.7 in the third quarter of 2024, an increase of $9.0 or 4.0% as compared to the same period in 2023. SG&A as a percentage of net sales was 15.3% in the third quarter of 2024 and 2023. SG&A expenses were higher by 60 bps, primarily due togrowth investments in our international division, Research and Development ("R&D") and Information Technology ("IT"), and the Graphico acquisition, offset by 60 bps of leverage associated with higher sales. SG&A expenses for the first nine months of 2024 were $684.5, an increase of $40.9 or 6.4% as compared to the same period in 2023. SG&A as a percentage of net sales increased 30 bps to 15.1% in the first nine months of 2024 compared to 14.8% in 2023 due to 90 bps on higher expenses, primarilydue togrowth investments in our international division, R&D and IT, offset by 60 bps of leverage associated with higher sales.
Previous report
Tradename and other asset impairment charges were $357.1 million for the three and nine months ended September 30, 2024 related to non-cash charges to adjust the carrying value of intangible assets and property, plant, and equipment related to the VMS business. The impairment was due to a continued decline in market share and a deterioration in the financial performance for the VMS business, which includes the VITAFUSION and L'IL CRITTERS tradename, primarily due to significant product competition coming from new category entrants, including private label. See Note 11, “Goodwill and Other Intangibles, Net” to the Condensed Consolidated Financial Statements included herein for additional information.
Previous report
The effective tax rate for the three months ended September 30, 2024 was a benefit of 25.9% as compared to an expense of 24.1% in the same period in 2023. The effective tax benefit of 25.9% for the three months ended September 30, 2024 was impacted by the non-cash VMS impairment charge. Excluding the VMS impairment charge, the effective tax rate for the three months ended September 30, 2024 was 23.8%.
Previous report
The effective tax rate for the nine months ended September 30, 2024 was 21.3%, compared to 22.1% in the same period in 2023. The effective tax rate for the nine months ended September 30, 2024 was impacted by the non-cash VMS impairment charge. Excluding the VMS impairment charge, the effective tax rate for the nine months ended September 30, 2024 was 22.6% which was higher than the 2023 rate due to a lower benefit from stock option exercises.
Previous report
The Corporate segment income consists of equity in earnings of affiliates. As of September 30, 2024, we held 50% ownership interests in each of Armand and ArmaKleen, respectively. Our equity in earnings of Armand and ArmaKleen, totaling $3.0 and $1.7 for the three months ended September 30, 2024 and 2023, respectively, and $7.2 and $8.1 for the nine months ended September 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.
Previous report
Intersegment sales from Consumer International to Consumer Domestic, which are not reflected in the table, were $7.0 and $4.7 for the three months ended September 30, 2024 and September 30, 2023, respectively, and were $19.6 and $11.7 for the nine months ended September 30, 2024 and September 30, 2023, respectively.
Previous report
In determining income (loss) 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 (loss) from operations.
Previous report
Corporate segment consists of equity in earnings of affiliates from Armand and ArmaKleen for the three and nine months ended September 30, 2024 and September 30, 2023. The Company’s 50% interest in Armakleen was sold to an unrelated third party in October of 2024. The transaction is not material to the Company’s results of operations or cash flows.
Previous report
In the third quarter and first nine months of 2024, the results include the VMS non-cash intangible and PP&E impairment charges of $357.1 in SG&A expenses, of which $327.4 was recorded in the Consumer Domestic segment and $29.7 was recorded in the Consumer International segment.
Previous report
The increase in net sales for three months ended September 30, 2024 includes growth from HERO® acne treatment products, THERABREATH® mouth wash, ZICAM® cold shortening and relief products, SPINBRUSH® battery-operated toothbrushes, ARM & HAMMER® baking soda, and ARM & HAMMER® scent boosters, partially offset by declines in VITAFUSION® and L’IL CRITTERS® gummy vitamins, and FINISHING TOUCH FLAWLESS® hair removal products. The increase in net sales for the nine-month period ending September 30, 2024, includes growth from THERABREATH® mouth wash, HERO® acne treatment products, ARM & HAMMER® cat litter, ARM & HAMMER® baking soda, and BATISTE® dry shampoo, partially offset by declines in VITAFUSION® and L’IL CRITTERS® gummy vitamins, FINISHING TOUCH FLAWLESS® hair removal products, and WATERPIK® Shower Heads.
Previous report
Consumer Domestic loss before income taxes for the third quarter of 2024 was $(107.1), a decrease of $310.5 as compared to the third quarter of 2023. The decrease is dueto the VMS non-cash intangible and PP&E impairment charges of $327.4. Excluding the non-cash impairment charges, Consumer Domestic income before income taxes increased by $16.9 and was impacted byhigher sales volumes of $22.1, the benefit of productivity programs of $19.6, favorable price/mix of $10.8, and favorable interest and other expenses of $10.6 (including interest related to tariff recoveries of $4.6), partially offset by the impact ofhigher manufacturing and distribution expenses of $28.1, higher marketing expenses of $13.7, andhigher SG&A expenses of $4.5. For the nine-month period ended September 30, 2024, income before income taxes was $405.3, a $257.5 decrease as compared to the first nine months of 2023. The decrease is due tothe VMS non-cash intangible and PP&E impairment charges of $327.4. Excluding the non-cash impairment charges, Consumer Domestic income before income taxes increased $69.9 and was impacted byhigher sales volumes of $64.1, the benefit of productivity programs of $54.2, favorable price/mix of $20.5, a favorable tariff ruling of $29.3 and favorable interest and other expenses of $22.2 (including interest related to tariff recoveries of $4.6), partially offset by higher marketing expenses of $53.4, higher SG&A expenses of $34.1, andhigher manufacturing and distribution expenses of $33.0.
Previous report
Excluding the impact of foreign exchange rates and the Graphico acquisition, sales growth in the third quarter ended September 30, 2024 was driven by OXICLEAN® stain removers, THERABREATH® mouth wash, ULTRAMAX® antiperspirant deodorant, and VITAFUSION® and L’IL CRITTERS® gummy vitamins, in GMG (the "Global Markets Group"), and HERO® acne treatment products in Europe, Canada and Australia. The increase in net sales for the nine-month period ending September 30, 2024, was driven by OXICLEAN® stain removers, THERABREATH® mouth wash, ULTRAMAX® antiperspirant deodorant, and VITAFUSION® and L’IL CRITTERS® gummy vitamins, in GMG, HERO® acne treatment products in Europe, HERO® acne treatment products in Canada, and THERABREATH® mouth wash in Mexico.
Previous report
Consumer International loss before income taxes was $(4.7) in the third quarter of 2024, a $27.4 decrease as compared to the third quarter of 2023 due to the VMS non-cash intangible and PP&E impairment charges of $29.7. Excluding the non-cash impairment charges, Consumer International income before income taxes increased $2.3 and was impacted by higher sales volumes of $6.5, a favorable price/mix of $4.5, lower manufacturing and commodity costs of $1.6, and favorable interest and other expenses of $1.1, offset by the impact of higher SG&A expenses of $6.0, higher marketing expenses of $4.3 and unfavorable foreign exchange rates of $1.1. For the first nine months of 2024, income before income taxes was $61.2, a $17.9 decrease as compared to the same period in 2023. The decrease is due to the VMS non-cash intangible and PP&E impairment charges of $29.7. Excluding the non-cash impairment charges, Consumer International income before income taxes increased $11.8, and was impacted by a favorable price/mix of $26.6, higher sales volumes of $17.5, favorable interest and other expenses of $1.7, and lower manufacturing and commodity costs of $1.3, partially offset by higher SG&A expenses of $17.2, higher marketing expenses of $16.1 and unfavorable foreign exchange rates of $2.0.
Previous report
SPD income before income taxes was $7.4 in the third quarter of 2024, an increase of $1.2 as compared to the same period in 2023 due to a favorable price/mix of $2.6, favorable manufacturing costs of $1.0, lower SG&A and other costs of $0.5, and lower marketing costs of $0.1, offset by the impact of lower sales volumes of $3.0 due to the exit of certain product lines. SPD income before income taxes was $29.5 in the first nine months of 2024, an increase of $7.3 as compared to the same period in 2023 to favorable price/product mix of $5.9, lower marketing expenses of $1.6, lower SG&A and other costs of $1.9, and favorable manufacturing costs of $0.2, partially offset by the impact of lower sales volumes of $2.2 due to the exit of certain product lines.
Previous report
Corporate
Previous report
The Corporate segment includes equity in earnings of affiliates from Armand and ArmaKleen in the three and nine months of 2024 and 2023. The Corporate segment income before income taxes was $3.0 in the third quarter of 2024, as compared to $1.7 in the same period in 2023. The Corporate segment income before income taxes was $7.2 for the first nine months of 2024, as compared to $8.1 in the same period in 2023. In October 2024 the Company sold its 50% interest in Armakleen to an unrelated third party. The transaction is not material to the Company’s results of operations or cash flows.
Previous report
In the first quarter of 2024, we repaid the remaining $200.0 of our Term Loan due December 22, 2024 with cash on hand.
Reworded paragraphs (25)
Previous wording
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; BATISTE® dry shampoo; WATERPIK® water flossers and showerheads; THERABREATH® oral care products; HERO® acne treatment products; VITAFUSION® and L’IL CRITTERS® gummy dietary supplements for adults and children, respectively; 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®; BATISTE®; WATERPIK®; THERABREATH®; HERO® and VITAFUSION® and L’IL CRITTERS®; and represent approximately 70% of our net sales and profits.
Current wording
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; THERABREATH® oral care products; HERO® acne treatment products; TROJAN condoms, lubricants and vibrators; 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.
Previous wording
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 distributors.
Current wording
We sell our consumer products under a variety of brands 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.
Previous wording
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.
Current wording
For additional discussion, please refer to Item 1A, "Risk Factors", and Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K.
Previous wording
Net sales for the quarter ended September 30, 2024 were $1,510.6, an increase of $54.7 or 3.8% as compared to the same period in 2023. Net sales for the nine months ended September 30, 2024 were $4,525.1, an increase of $185.2 or 4.3% over the comparable nine month period of 2023. The components of the net sales increase are as follows:
Current wording
Net sales for the quarter ended March 31, 2025 were $1,467.1, a decrease of $36.2 or 2.4% as compared to the same period in 2024. The components of the net sales decrease are as follows:
Previous wording
Our gross profit was $683.1 for the three months ended September 30, 2024, a $36.8 increase as compared to the same period in 2023. Gross margin increased 80 basis points (“bps”) in the third quarter of 2024 compared to the same period in 2023, due to the positive impact of productivity programs of 140 bps, favorable price/volume/mix of 130 bps, a favorable tariff ruling of 20 bps, and benefits from the Graphico Acquisition of 10 bps, offset by the impact ofhigher manufacturing costs, including labor and commodities, of 220 bps. Gross profit was $2,082.2 for the nine months ended September 30, 2024, a $175.0 increase compared to the same period in 2023. Gross margin increased 210 bps in the first nine months of 2024 compared to the same period in 2023, due to the impact of productivity programs of 130 bps, favorable price/volume/mix of 120 bps, and a favorable tariff ruling of 70 bps, offset bythe impact of higher manufacturing costs including labor and higher commodities of 100 bps and unfavorable foreign exchange of 10 bps.
Current wording
Our gross profit was $659.6 for the three months ended March 31, 2025, a $27.4 decrease as compared to the same period in 2024. Gross margin decreased 70 basis points (“bps”) in the first quarter of 2025 compared to the same period in 2024, due to higher manufacturing costs including labor and commodities of 230 bps, unfavorable foreign exchange of 20 bps, partially offset by the impact of productivity programs of 160 bps, benefits from the Graphico Acquisition of 10 bps and favorable price/mix/volume of 10 bps.
Previous wording
Interest income for the three and nine months ended September 30, 2024 increased $6.1 and $10.5 to $10.6 and $17.7, respectively, as compared to the same periods in 2023, due to higher interest income primarily associated with the favorable Waterpik tariff ruling and higher interest rates.
Current wording
Interest income for the three months ended March 31, 2025 increased $5.9 to $9.3, as compared to the same period in 2024, due to higher interest income primarily associated with higher cash balances.
Previous wording
Interest expense for the three and nine months ended September 30, 2024 decreased $3.8 and $12.3 to $23.4 and $71.6, respectively, as compared to the same periods in 2023, primarily due to lower average outstanding debt.
Current wording
Interest expense for the three months ended March 31, 2025 decreased $1.7 to $23.3, as compared to the same period in 2024, primarily due to lower average outstanding debt.
Previous wording
Other income (expense), net was nominal for the three and nine months ended September 30, 2024 and 2023.
Current wording
Other income (expense) was nominal for the three months ended March 31, 2025 and 2024.
Previous wording
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.
Current wording
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 equity in earnings of affiliates which is not reflected in a reportable segment.
Previous wording
Segment net sales and income (loss) before income taxes for the three and nine months ended September 30, 2024 and September 30, 2023 are as follows:
Current wording
Segment net sales and income from operations for the three months ended March 31, 2025 and March 31, 2024 are as follows:
Previous wording
Consumer Domestic net sales in the third quarter of 2024 were $1,170.8, an increase of $37.7 or 3.3% as compared to the same period in 2023. Consumer Domestic net sales for the nine months ended September 30, 2024 were $3,506.6, an increase of $128.4 or 3.8% as compared to the same period in 2023. The components of the net sales change are the following:
Current wording
Consumer Domestic net sales in the first quarter of 2025 were $1,129.8, a decrease of $35.4 or 3.0% as compared to the same period in 2024. The components of the net sales change are the following:
Previous wording
Consumer International net sales were $267.7 in the third quarter of 2024, an increase of $23.3 or 9.5% as compared to the same period in 2023. Consumer International net sales in the first nine months of 2024 were $786.4, an increase of $69.5 or 9.7% as compared to the same period in 2023. The components of the net sales change are the following:
Current wording
Consumer International net sales were $261.9 in the first quarter of 2025, an increase of $6.9 or 2.7% as compared to the same period in 2024. The components of the net sales change are the following:
Previous wording
SPD net sales were $72.1 in the third quarter of 2024, a decrease of $6.3 or 8.0% as compared to the same period in 2023. SPD net sales were $232.1 for the first nine months of 2024, a decrease of $12.7, or 5.2% as compared to the same period in 2023. The components of the net sales change are the following:
Current wording
SPD net sales were $75.4 in the first quarter of 2025, a decrease of $7.7 or 9.3% as compared to the same period in 2024. The components of the net sales change are the following:
Previous wording
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.
Current wording
(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.
Previous wording
Net sales excluding product line divestitures increased in the three and nine months ended September 30, 2024 primarily due to growth in our animal nutrition and specialty chemicals segments.
Current wording
Net sales excluding product line divestitures increased in the first quarter of 2025 primarily due to growth in our Performance Products and Commercial & Professional businesses.
Previous wording
As of September 30, 2024, we had $752.1 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.
Current wording
As of March 31, 2025, we had $1,074.5 in cash and cash equivalents, and approximately $1,494.0 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.
Previous wording
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 our Annual Report on 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 interest coverage ratio requirement under the Credit Agreement.
Current wording
The current economic environment presents risks that could have adverse consequences for our liquidity. See “Our operating results have been, and could be in the future, adversely affected by natural disasters, public health crises, political crises, or other catastrophic events, or unfavorable worldwide, regional and local economic and financial market conditions” 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 because we currently are, and anticipate that we will continue to be, in compliance with the maximum leverage ratio requirement under the Credit Agreement.
Previous wording
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.
Current wording
On October 28, 2021, the Board authorized a 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. We continue to maintain 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 its incentive plans.
Previous wording
As of September 30, 2024, there remains $658.9 of share repurchase availability under the 2021 Share Repurchase Program.
Current wording
We have $658.9 of share repurchase availability under the 2021 Share Repurchase Program as of March 31, 2025.
Previous wording
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.
Current wording
On January 29, 2025, the Board declared a 4% increase in the regular quarterly dividend from $0.28375 to $0.295 per share, equivalent to an annual dividend of $1.18 per share payable to stockholders of record as of February 14, 2025. The increase raises the annual dividend payout from $277.0 to approximately $287.0 on an annualized basis.
Previous wording
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.
Current wording
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 $130.0 in 2025 including manufacturing capacity investments for Therabreath and Sterimar and an enterprise resource planning (ERP) project. Cash, together with our current borrowing capacity, may be used for acquisitions that would complement our existing product lines or geographic markets.
Previous wording
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 nine months ended September 30, 2024 increased by $68.8 to $863.9 as compared to $795.1 in the same period in 2023 primarily due to an increase in cash earnings (net income adjusted for non-cash items). We measure working capital effectiveness based on our cash conversion cycle. The following table presents our cash conversion cycle information for the quarters ended September 30, 2024 and 2023:
Current wording
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 three months ended March 31, 2025 decreased by $77.3 to $185.7 as compared to $263.0 in the same period in 2024 due to an increase in working capital and a decrease in cash earnings (net income adjusted for non-cash items). The increase in working capital is primarily related to lower accounts payable and accrued expense balances because of the timing and management strategy related to marketing spend plus higher inventory partially offset by higher cash collections. The higher inventory balance is mainly due to lower sales in our consumer domestic business. We measure working capital effectiveness based on our cash conversion cycle. The following table presents our cash conversion cycle information for the quarters ended March 31, 2025 and 2024:
Previous wording
Our cash conversion cycle (defined as the sum of DSO and DIO less DPO) which is calculated using a two-period average method, increased 2 days 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. 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.
Current wording
Our cash conversion cycle (defined as the sum of DSO and DIO less DPO) which is calculated using a two-period average method, was the same as the prior year. The increase in DSO is primarily due to higher accounts receivable balances as we reduced our accounts receivable factoring program in response to higher interest rates. Higher DIO is generally the result of lower sales in the first quarter of 2025. The increase in DPO is primarily from agreeing to extended payment terms with some vendors. We continue to focus on reducing our working capital requirements.
Previous wording
Net Cash Used in Investing Activities – Net cash used in investing activities during the first nine months of 2024 was $138.1, primarily reflecting $125.2 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 nine months of 2023 was $128.4, primarily reflecting $121.5 property, plant and equipment additions.
Current wording
Net Cash Used in Investing Activities – Net cash used in investing activities during the first three months of 2025 was $16.7, primarily reflecting $16.5 for property, plant and equipment additions. Net cash used in investing activities during the first three months of 2024 was $46.8, primarily reflecting $46.3 for property, plant and equipment additions.
Previous wording
Net Cash Used in Financing Activities – Net cash used in financing activities during the first nine months of 2024 was $318.3 reflecting $200.4 of net debt payments and $207.4 of cash dividend payments, partially offset by $90.3 of proceeds from stock option exercises. Net cash used in financing activities during the first nine months of 2023 was $363.0, reflecting $199.9 of cash dividend payments and $270.6 of net debt repayments, partially offset by $107.6 of proceeds from stock option exercises.
Current wording
Net Cash Used in Financing Activities – Net cash used in financing activities during the first three months of 2025 was $61.0 reflecting $72.4 of cash dividend payments and $5.9 related to the payment of a business acquisition liability, partially offset by $19.3 of proceeds from stock option exercises. Net cash used in financing activities during the first three months of 2024 was $209.1 reflecting $200.0 of net debt payments, $69.0 of cash dividend payments, partially offset by $59.9 of proceeds from stock option exercises.