Church & Dwight grew Q2 2026 organic sales 5.8% on volume, but 2025 business exits held reported sales to +1.6%; GAAP EPS rose 9% to $0.85 on easy comparisons while adjusted EPS fell to $0.89, and full-year guidance was raised.
Revenue
$1.5B
+1.6% YoY
Net income
$203M
+6.2% YoY
Diluted EPS
$0.85
+9.0% YoY
Operating margin
18.1%
Overview
Church & Dwight's reported second-quarter numbers look modest: net sales rose 1.6% to $1,530.0 million and diluted EPS rose 9.0% to $0.85. Both figures hide two opposite stories. Underneath, the brands the company kept are selling well. Organic sales, meaning sales growth after stripping out acquisitions, divestitures and currency moves, rose 5.8%, and most of that came from selling more units (volume +4.3%) rather than raising prices (price/mix +1.5%). The reported sales line barely moved because the vitamin, Flawless, Spinbrush and Waterpik showerhead businesses the company exited in 2025 took 7.4 points off growth. Recent acquisitions (Touchland and Miss Mouth's) added back 2.8 points.
On profit, GAAP earnings rose mostly because last year's Q2 carried $51.0 million of one-time charges for exiting those businesses. On the company's own adjusted basis, which excludes one-time items, earnings fell: adjusted EPS was $0.89 against $0.94 a year earlier (-5.3%). Higher marketing, Touchland's overhead and amortization, and much lower interest income on a smaller cash pile absorbed the gains from stronger sales and a better gross margin.
Key metrics (Q2 2026, quarter ended June 30)
Metric
Q2 2026
Q2 2025
YoY Change
Net sales
$1,530.0M
$1,506.3M
+1.6%
Organic sales growth (non-GAAP)
+5.8%
n/a
n/a
Gross margin
45.4%
43.0%
+240 bps
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Six-month (year-to-date) figures: net sales $2,999.3M (+0.9%), organic growth +5.4%, operating income $567.4M (+1.9%), net income $419.1M (+1.9%), diluted EPS $1.76 vs. $1.66 (+6.0%), adjusted EPS $1.84 vs. $1.86 (-1.1%). Organic and adjusted figures come from the company's July 31, 2026 earnings release (8-K Exhibit 99.1). All other figures come from the 10-Q.
Sales: what grew and what was removed
The 10-Q's bridge from last year's sales to this year's:
Driver
Q2 2026
First six months
Volume (units sold)
+4.3%
+4.8%
Price / product mix
+1.5%
+0.6%
Foreign exchange
+0.4%
+0.7%
Exited product lines
-7.4%
-7.6%
Acquisitions
+2.8%
+2.4%
Reported net sales growth
+1.6%
+0.9%
Volume and price/mix were positive in all three segments. The exits refer to the VitaFusion and L'il Critters vitamin brands (VMS), sold to Piping Rock on December 31, 2025, and to Flawless, Spinbrush and Waterpik showerheads, all wound down by the end of 2025. Those three smaller lines had 2025 sales of $29.3M, $53.6M and $35.5M. The VMS brands were less than 5% of 2025 sales. Because every exit was completed by year-end 2025, this drag continues through 2026. It is the reason the company guides to only flat-to-1% reported sales growth for the year while guiding to 4-5% organic growth.
Segment results
Segment
Q2 2026 sales
YoY reported
YoY organic (release)
Q2 2026 operating income
Q2 2025 operating income
Consumer Domestic
$1,155.8M
+0.1%
+5.1%
$223.4M
$217.4M
Consumer International
$297.5M
+7.2%
+9.1%
$41.6M
$32.4M
Specialty Products (SPD)
$76.7M
+2.8%
+2.8%
$11.4M
$11.9M
Consumer Domestic (about three-quarters of sales). Volume rose 3.6% and price/mix 1.5%. Exits took away 8.4 points and acquisitions added 3.4. The 10-Q credits organic growth to THERABREATH mouthwash and toothpaste, HERO acne products, ARM & HAMMER cat litter and ZICAM. Household products (laundry, deodorizing, cleaning) grew to $662.0M from $650.0M. Personal care slipped to $493.8M from $504.1M, since the exited lines were largely personal-care products. Segment operating income rose only $6.0M even though last year's quarter carried $47.2M of exit costs. The 10-Q's walk explains why. Volume, including acquisitions and net of the exits, added $21.5M, productivity programs added $19.5M and price/mix added $14.5M. Against that, inflation, "including Middle East conflict-related commodity and transportation costs," cost $56.4M and SG&A rose $37.7M, largely on Touchland and Miss Mouth's acquisition-related costs.
Consumer International was the fastest-growing segment. Volume rose 7.3%, price/mix 1.8% and currency 2.1%, with exits taking away 5.0 points. The 10-Q names THERABREATH and HERO in the Global Markets Group (the export business) and subsidiaries, BATISTE dry shampoo in Europe and Canada, and STERIMAR nasal spray as the drivers. Operating income rose $9.2M to $41.6M, helped by $8.9M of favorable price/mix, partly offset by $7.0M of higher SG&A and $5.4M more marketing.
Specialty Products (baking soda for industry and animal nutrition) grew 2.8% on sodium bicarbonate and animal nutrition. Operating income slipped $0.5M because of $2.3M of higher manufacturing costs.
Gross margin, tariffs and the Middle East
Gross margin is the share of each sales dollar left after the cost of making and shipping the product. It rose 240 basis points to 45.4% (100 basis points = 1 percentage point). Most of that is an accounting comparison, because last year's Q2 cost of sales included $30.4M of write-downs tied to the exits. Excluding those, the 10-Q says margin rose 40 bps. That breaks down as +180 bps from volume and mix, +150 bps from productivity programs and +110 bps from the richer mix of acquired brands plus the removal of exited lines. Together these were offset by 400 bps of higher manufacturing and logistics costs, covering labor, commodities, tariffs and transportation. That 400-bps cost hit is much larger than the 290 bps for the half-year as a whole, so cost pressure got worse during Q2.
The 10-Q attributes part of that pressure to the Middle East conflict disrupting shipping routes, including the Strait of Hormuz. Management says it can mitigate "a significant portion" of these "transitory impacts" in 2026. On tariffs, the Supreme Court ruled on February 20, 2026 that the IEEPA tariffs were unlawful. CHD says it paid about $23.0M of them and has recognized no recovery yet. It expects about $15.0M of "phase II" refunds in the second half and says it will spend the money on consumer-facing activities and on offsetting inflation, so the refund should not be counted as extra profit.
Where the profit went
Marketing rose 5.2% to $165.3M (10.8% of sales).
SG&A (selling, general and administrative overhead) rose 10.5% to $252.2M, or 16.5% of sales. The 10-Q attributes 160 bps of the increase to Touchland and Miss Mouth's acquisition-related expenses and to spending on growth initiatives, e-commerce and international. The release says SG&A included $6.3M of stock compensation for Touchland's founder and $4.5M of ERP project costs.
Interest income fell to $1.4M from $9.2M, which the 10-Q attributes to lower cash balances. Cash was $254.8M at June 30 against $923.2M a year earlier, after the Touchland deal ($656.0M at closing plus a $158.7M earnout paid in April 2026), 2025 share repurchases and Miss Mouth's ($300.0M cash in May).
A lower tax rate (20.8% vs. 23.8%, which the 10-Q attributes to tax planning) partly cushioned the result. Without it, net income growth would have been weaker than the 6.2% reported.
Share count helped per-share results: diluted shares fell to 238.2M from 246.4M because of last year's repurchases. That is why EPS grew faster (+9.0%) than net income (+6.2%). No shares were repurchased in the first half of 2026.
Portfolio moves and balance-sheet risks
Miss Mouth's Messy Eater stain remover was acquired on May 28, 2026 for $300.0M cash plus $25.0M deferred. It had about $80.0M of 2025 sales, which puts the price at roughly 4x sales. It is managed in Consumer Domestic, next to OxiClean. The release calls it "the #1 stain remover brand on Amazon."
Touchland (hand sanitizer), acquired July 16, 2025, still inflates reported growth until it laps its acquisition date in mid-July. The $158.7M earnout was paid in April 2026, and founder stock compensation ($50.0M vesting over two years) continues to weigh on SG&A.
Waterpik is the impairment risk to watch. The 10-Q says the business is seeing "customer distribution losses and a decline in consumer demand," as more shoppers choose value brands. At the last annual test (October 1, 2025), the WATERPIK trade name's fair value was only 117% of its $644.7M carrying value, down from 135%. The company warns that further declines could trigger an impairment charge. The company has also stopped importing substantially all Waterpik flossers from China into the U.S. because of tariffs.
Cash flow was solid. Operating cash flow for the half was $461.6M (+10.8%), helped by longer payment terms with suppliers (days payable rose to 81 from 77) and lower inventory days (63 vs. 69). Capex was $61.8M. Net commercial paper borrowings were $49.9M.
Takeaway: The core brands are growing on volume, which is the healthiest kind of growth in household products: 5.8% organic, 4.3 points of it from units sold. But investors are not yet getting that in earnings. Adjusted EPS fell 5.3%, because the gross-margin gain (+40 bps underlying) was spent on marketing, Touchland overhead and amortization, and lost interest income. The reported +9% EPS reflects last year's exit charges dropping out of the comparison, not stronger underlying profit.
Outlook
In the July 31 earnings release, management raised its full-year 2026 outlook:
Item
New 2026 outlook
Prior
Organic sales growth
+4% to 5%
+3% to 4%
Reported net sales
Flat to +1%
-1.5% to -0.5%
Adjusted gross margin
+100 to 120 bps
n/a
Reported EPS
+20% to 22% ($3.61-$3.68)
n/a
Adjusted EPS
+6% to 8% ($3.74-$3.81)
+5% to 8%
Cash from operations
~$1.175B
~$1.150B
Marketing
At or above 11% of sales
n/a
For Q3 the company guides to about 3% organic growth, a small reported sales decline (the release text says about 1% while its reconciliation table shows -0.5%), marketing stepping up to about 12% of sales, and adjusted EPS of about $0.89 (+10%). Reported full-year EPS growth of 20-22% mostly reflects 2025's $0.18 VMS divestiture charge and $0.14 of exit impairments not recurring.
Our read. First-half adjusted EPS was down 1.1% ($1.84 vs. $1.86). Hitting $3.74-$3.81 for the year therefore requires second-half adjusted EPS of $1.90-$1.97, against $1.67 in the second half of 2025, an increase of roughly 14-18%. That is plausible for two reasons. Touchland's costs are in both years from Q3 on, so the comparison gets easier, and the second half gets the tariff refund. But it depends on the Middle East cost spike actually proving "transitory." Q2's 400-bps cost headwind was already heavier than the half-year average. The things to watch in Q3 are whether volume growth holds as the company pushes marketing to ~12% of sales, how Miss Mouth's performs in its first full quarter, and any further deterioration at Waterpik ahead of the fourth-quarter impairment test.