Church & Dwight (NYSE: CHD) reported Q2 2026 net sales of $1.53 billion, up 1.6% from $1.506 billion a year earlier, while diluted EPS increased to $0.85 from $0.78. Organic sales grew 5.8%, led by volume, but adjusted EPS declined to $0.89 as higher marketing and acquisition-related SG&A absorbed the benefit of stronger sales and gross-margin expansion.
Core financial results
The gap between reported and organic growth was a defining feature of the quarter. Organic sales increased 5.8%, consisting of 4.3% volume growth and 1.5% favorable price and product mix, while the company’s 2025 strategic portfolio actions limited reported growth to 1.6%.
GAAP operating income and net income increased, but adjusted operating income and adjusted EPS declined. This divergence reflected higher brand investment and costs associated with the TOUCHLAND acquisition.
| Metric | Q2 2026 | Q2 2025 | Year-over-year change |
|---|---|---|---|
| Net sales | $1,530.0 million | $1,506.3 million | +1.6% |
| Gross profit and margin | $693.9 million; 45.4% | $647.0 million; approximately 43.0% | +7.2%; +240 bps |
| Adjusted gross margin | 45.4% | 45.0% | +40 bps |
| Operating income and margin | $276.4 million; approximately 18.1% | $261.7 million; approximately 17.4% | +5.6%; approximately +70 bps |
| Adjusted operating income | $287.2 million | Approximately $315.9 million | Approximately -9.1% |
| Net income | $202.8 million | $191.0 million | +6.2% |
| Diluted EPS | $0.85 | $0.78 | +9.0% |
| Adjusted EPS | $0.89 | $0.94 | -5.3% |
| Cash from operations | $286.8 million | — | +24.3% |
The adjusted gross-margin increase was driven by volume, productivity, and favorable mix from acquisitions and portfolio actions. Inflation and higher transportation costs provided a partial offset.
Business and segment performance
All three divisions generated positive organic growth, with Consumer International producing the fastest increase. Consumer Domestic showed the largest difference between reported and organic sales because acquired-brand contributions were offset by the effect of the prior-year portfolio actions.
| Segment | Q2 2026 net sales | Reported growth | Organic growth | Organic growth components |
|---|---|---|---|---|
| Consumer Domestic | $1,155.8 million | +0.1% | +5.1% | Volume +3.6%; price/mix +1.5% |
| Consumer International | $297.5 million | +7.2% | +9.1% | Volume +7.3%; price/mix +1.8% |
| Specialty Products | $76.7 million | +2.8% | +2.8% | Volume +1.3%; price/mix +1.5% |
Domestic organic growth was led by THERABREATH mouthwash and toothpaste, HERO, ARM & HAMMER cat litter, and ZICAM. International growth was broad-based, with THERABREATH, HERO, and BATISTE among the primary contributors.
Global e-commerce sales increased 22.7% and represented 25.5% of total consumer sales. The company also completed its acquisition of MISS MOUTH’S MESSY EATER in June and reported encouraging initial sales, although it did not quantify the brand’s quarterly contribution.
Management expects products launched during 2026 to account for approximately half of full-year organic growth. The innovation program includes additions across THERABREATH oral care, ARM & HAMMER cat litter, and HERO acne care.
Gross-margin gains were absorbed by marketing and acquisition-related SG&A
Marketing expense increased $8.2 million to $165.3 million and rose 40 basis points as a percentage of sales. The spending supported new products, distribution gains, and other brand-growth initiatives.
Reported SG&A increased to $252.2 million, including $6.3 million of restricted-stock charges related to the TOUCHLAND acquisition. Adjusted SG&A was $241.4 million, or 15.8% of sales, an increase of 220 basis points. The company attributed the increase primarily to TOUCHLAND amortization and operating expenses.
Consequently, adjusted operating income declined by $28.7 million even as organic sales and adjusted gross margin improved. A lower adjusted effective tax rate—20.3% versus 23.8% a year earlier—provided some earnings support, but adjusted EPS still fell 5.3%.
Cash flow and balance sheet
Second-quarter cash from operations increased 24.3% to $286.8 million. For the first six months, operating cash flow was $461.6 million, up 10.8% from $416.5 million, with the company citing higher cash earnings and disciplined working-capital management.
First-half capital expenditures rose to $61.8 million from $39.0 million. On a simple operating cash flow less capital expenditures basis, first-half free cash flow was approximately $399.8 million, compared with approximately $377.5 million a year earlier.
Cash declined from $409.0 million at the end of 2025 to $254.8 million on June 30, 2026. The cash flow statement included $300.0 million of acquisition spending, $180.5 million of payments for business-acquisition liabilities, and $145.8 million of dividends. Inventory increased from $534.8 million to $601.9 million over the same six-month period, while total debt stood at approximately $2.3 billion.
Guidance
Church & Dwight raised its full-year sales, adjusted EPS, and operating cash flow outlook following the stronger organic performance in the first half. The revised sales forecast also incorporates a contribution from MISS MOUTH’S.
| Metric | Latest 2026 guidance | Previous guidance | Change |
|---|---|---|---|
| Reported net sales growth | Flat to +1% | -1.5% to -0.5% | Both endpoints raised 1.5 percentage points |
| Organic sales growth | +4% to +5% | +3% to +4% | Both endpoints raised 1 percentage point |
| Adjusted EPS growth | +6% to +8% | +5% to +8% | Low end raised 1 percentage point |
| Cash from operations | Approximately $1.175 billion | Approximately $1.150 billion | +$25 million |
| Adjusted tax rate | Approximately 21% | 21.5% | Reduced by 50 bps |
The company now expects reported EPS to increase 20% to 22% and adjusted gross margin to expand 100 to 120 basis points. Volume, productivity, and acquisition and portfolio mix are expected to offset inflation, transportation, and tariff-related costs. Marketing is expected to equal or exceed 11% of sales, while full-year capital expenditures remain projected at approximately $130 million.
For Q3 2026, management expects organic sales growth of approximately 3%, but reported sales to decline approximately 1% because of the 2025 portfolio actions. Adjusted EPS is expected to be approximately $0.89, up 10% year over year, with marketing rising sequentially to approximately 12% of sales.
Recent insider transactions
The latest reported insider records include stock awards, derivative-security exercises, and sales. Several exercises and sales occurred on the same day; these records should not be treated as open-market purchases or interpreted on their own as a view on the company’s prospects.
| Insider | Role | Transaction | Ownership | Reported value | Date |
|---|---|---|---|---|---|
| Janet S. Vergis | Director | Stock award at $96.88 per share | Direct | $71,304 | Jul. 1, 2026 |
| Penry W. Price | Director | Stock award at $96.88 per share | Direct | $142,510 | Jul. 1, 2026 |
| Carlos G. Linares | Officer | Derivative-security exercise at $50.28 per share | Direct | $502,800 | Jun. 16, 2026 |
| Carlos G. Linares | Officer | Sale at $99.71 per share | Direct | $997,067 | Jun. 16, 2026 |
| Robert K. Shearer | Director | Derivative-security exercise at $77.33 per share | Direct | $665,038 | Jun. 11, 2026 |
| Robert K. Shearer | Director | Sale at $97.97 per share | Direct | $842,543 | Jun. 11, 2026 |
| Brian D. Buchert | Officer | Derivative-security exercise at $49.62 per share | Direct | $504,139 | Jun. 10, 2026 |
| Ravichandra Krishnamurty Saligram | Director | Derivative-security exercise at $49.62 per share | Indirect | $643,075 | Jun. 10, 2026 |
| Ravichandra Krishnamurty Saligram | Director | Sale at $98.00 per share | Indirect | $1,270,080 | Jun. 10, 2026 |
| Brian D. Buchert | Officer | Sale at $98.14 per share | Direct | $997,153 | Jun. 10, 2026 |
Risks investors need to watch
- Reported growth remains below organic growth. The effects of the 2025 portfolio actions are expected to produce an approximately 1% reported sales decline in Q3 even though organic sales are projected to grow about 3%.
- Reinvestment is pressuring adjusted profitability. Marketing spending and acquisition-related SG&A more than offset adjusted gross-margin expansion in Q2, and marketing is expected to rise to approximately 12% of sales in Q3.
- Inflation and transportation costs remain active pressures. Management expects to offset these costs, including inflation associated with the Middle East situation, but the expected margin expansion depends on productivity, volume, and favorable mix delivering as planned.
- Acquisitions add costs and balance-sheet demands. TOUCHLAND expenses weighed on adjusted earnings, while acquisition spending and related liability payments contributed to lower cash balances during the first half.
- The growth outlook relies heavily on innovation. New products are expected to provide approximately half of 2026 organic growth, making consumer adoption and distribution gains important to achieving the raised forecast.
Summary
Church & Dwight’s Q2 2026 results showed broad-based, volume-led organic growth and improved gross margins, supporting higher full-year sales, adjusted EPS, and cash flow guidance. The main counterweight was increased marketing and acquisition-related SG&A, which caused adjusted operating income and adjusted EPS to decline. The next key test is whether the company can sustain organic momentum while converting margin gains into earnings as marketing spending rises and portfolio actions continue to weigh on reported sales.
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