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Church & Dwight Sees Q4 Adj. EPS Below Market, Lifts FY21 Sales Growth View; Plans $1 Bln Buyback

While announcing higher third-quarter results, Church & Dwight Co. Inc. (CHD) Friday issued fourth-quarter adjusted earnings view below market estimates. The company further trimmed fiscal 2021 margin view, maintained earnings growth forecast, and lifted sales growth view.

Further, the company said its Board of Directors on October 28 authorized a new stock repurchase program under which up to $1 billion of its stock may be repurchased. The previously authorized share repurchase program has been terminated. Currently, the company has approximately 250 million shares outstanding.

Regarding the outlook, Matthew Farrell, Chief Executive Officer, said, "Despite the COVID-19 pandemic, supply chain disruptions and global economy challenges, we continue to expect 2021 to be another strong year both top and bottom line. Our categories are growing, and our brands are performing well."

In the fourth quarter, adjusted earnings per share is expected to be $0.61, up 15 percent from last year's adjusted earnings.

On average, eight analysts polled by Thomson Reuters expect earnings of $0.69 per share for the quarter. Analysts' estimates typically exclude special items.

Reported sales growth would be approximately 3 percent and organic sales growth would be around 2 percent as the company is temporarily constrained by supply. Meanwhile, the consumption is expected to continue to be strong in the fourth quarter.

For the year 2021, the company still expects adjusted earnings per share growth of 6 percent, on top of 15 percent adjusted EPS growth in 2020. As a result of expected incremental costs, full-year gross margin is expected to decrease 170 basis points, compared to previous expectation of gross margin to decline 75 basis points. Adjusted operating profit margin expansion would be 70 basis points.

Further, the company now expects full year 2021 reported sales growth to be approximately 5.5 percent, higher than previously expected reported sales growth of around 5 percent. Organic sales growth is still expected to be approximately 4 percent.

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