$CHD · CHURCH & DWIGHT CO INC /DE/
Church & Dwight filed its Q3 FY2026 10-Q, reporting net sales of $1.602B (+1.0% YoY), net income of $212.2M, and diluted EPS of $0.89 (+18.7% YoY). Gross margin expanded 170 bps to 46.8% and operating margin rose 210 bps to 18.2%. The board authorized a new $1.0B share repurchase program on October 27, 2026, replacing the prior 2021 program.
- Q3 diluted EPS of $0.89 rose 18.7% YoY from $0.75, driven by gross margin expansion and lower marketing spend.
- Gross margin expanded 170 bps to 46.8% as cost of sales fell to $852.7M from $871.2M despite 1% revenue growth.
- Operating margin jumped 210 bps to 18.2%, with operating income up 14.5% to $291.4M.
- Board authorized a new $1.0B share repurchase program on October 27, 2026, replacing the prior 2021 program.
- Nine-month operating cash flow was $841.2M, down slightly from $852.0M, with inventory build consuming $98.2M.
CHD shares rose 2.09% to $108.22 in the regular session following the filing, reflecting a positive reaction to the 18.7% EPS growth and $1B buyback authorization on a $25.67B market cap.
An 18.7% EPS jump on just 1% revenue growth demonstrates exceptional operating leverage, and the concurrent $1B buyback authorization signals management's confidence in sustained cash generation.
Church & Dwight's margin expansion stands out in consumer staples, where many peers are still battling input-cost inflation. The 170 bps gross margin gain to 46.8% was achieved through lower cost of sales despite only 1% top-line growth, suggesting effective cost management and favorable commodity trends.
Nine-month interest income collapsed to $6.6M from $21.4M YoY, while interest expense ticked up to $72.3M from $70.6M — a combined $17.1M swing in net interest that could pressure earnings if rates stay elevated. SG&A rose 8.1% YTD to $770.5M, outpacing the 0.9% revenue growth.