Church & Dwight Co., the parent company of Arm & Hammer and OxiClean, is raising prices to offset higher input and transportation costs.
The Ewing, New Jersey-based household products company will soon announce price hikes for 30% of its portfolio that will go into effect in the first quarter of next year. The increases follow actions taken in July and October that raised prices for an additional 50% of its products.
|CHD||CHURCH & DWIGHT CO. INC.||79.55||-1.76||-2.16%|
"Significant inflation of material, component and co-packer costs impacted our gross margin in Q3," Church & Dwight CEO Matthew Farrell said in a statement. "Looking forward, we expect input costs and transportation costs to remain elevated in Q4 and expect significant incremental cost increases in 2022."
Management expects inflationary pressures to continue and is examining additional pricing actions that can be put into place next year.
Church & Dwight’s gross margin fell 130 basis points to 44.2% due to the impact of Hurricane Ida, higher input and transportation costs, and tariffs that were partially offset by productivity and price increases.
The company spent $10 million less on marketing during the quarter due to lower fill rates and product availability caused by supply chain bottlenecks.
Church & Dwight on Friday reported a third-quarter profit of $230.4 million, or an adjusted 92 cents per share, as revenue rose 5.7% year over year to $1.31 billion. Analysts surveyed by Refinitiv were expecting adjusted earnings of 71 cents per share on revenue of $1.28 billion.
Despite the ongoing supply chain issues, 2021 is expected to be "another strong year both top and bottom line," Farrell said.
The company expects sales to grow 5.5% for the full year with organic sales growth of 4%. This, on top of the 9.6% organic growth in 2020.
Church & Dwight shares were down 2.2% this year through Thursday, compared with the S&P 500’s 22% gain.