Financial Trends -- 5/10
CHD presents a mixed financial picture heading into 2026. Organic growth collapsed to +0.7% in
2025 (well below the 3-4% evergreen target), Consumer Domestic organic went negative for the first
time, and EBITDA contracted -1.6%. Gross margins reversed -100bps after two years of recovery.
On the positive side, FCF hit a record $1,083M (+10% YoY), cash conversion was 147%, and the company
returned $900M to shareholders. Portfolio cleanup (exiting ~$400M of lower-margin brands) positions
the go-forward portfolio for re-acceleration, but 2026 guidance still needs proof.
Weight: 25%
2025 Revenue
$6,203M
+1.6% YoY | organic just +0.7%
2025 Adj EPS
$3.53
+2.6% YoY | decelerating from +8.5%
2025 Gross Margin
44.7%
-100bps YoY | reversed 2yr recovery
2025 FCF
$1,083M
+10% YoY | record, 147% conversion
Revenue Trajectory (Annual, USD M)
Organic growth collapsed to +0.7% in 2025, well below the 3-4% evergreen target.
Revenue growth decelerated from +9.2% (2023) to +4.1% (2024) to just +1.6% (2025). Organic growth
fell even more sharply: +5.3% to +4.6% to +0.7%. The reported number was dragged by portfolio exits
(Flawless, Spinbrush, Waterpik showerheads, VMS divestiture). Excluding VMS, underlying organic was
~2% -- still below the long-term algorithm. Consensus expects a return to 3-4% organic in 2026,
implying ~$6.4B revenue.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Revenue ($M) | $4,895.8M | $5,190.1M | $5,375.6M | $5,867.9M | $6,107.1M | $6,203.2M |
| YoY Growth | — | 6.0% | 3.6% | 9.2% | 4.1% | 1.6% |
| Organic Growth | 9.6% | 4.3% | 1.4% | 5.3% | 4.6% | 0.7% |
2026E ~$6.4B, 2027E ~$6.7B consensus. Organic growth of +0.7% is weakest in 5-year window. Data sourced from Daloopa.
Gross Margin Trajectory (Annual)
Gross margin reversed -100bps to 44.7% in 2025 after two years of recovery.
GM expanded from the 41.9% trough (2022) to 45.7% (2024) before pulling back in 2025 due to
inflation, tariffs, and promotional activity in vitamins. The quarterly trajectory improved within
2025: 45.0% to 43.0% to 45.1% to 45.8%, with H2 rebound driven by productivity programs and
Touchland higher-margin mix. Management guided +100bps GM improvement for 2026 (above evergreen
model of 25-50bps), driven by portfolio exits removing lower-margin businesses.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Gross Margin | 45.2% | 43.6% | 41.9% | 44.1% | 45.7% | 44.7% |
| YoY Change (bps) | — | -160 | -170 | 220 | 160 | -100 |
2026 guidance: +100bps GM improvement. Evergreen model is 25-50bps annually. Data sourced from Daloopa.
Adj EBITDA and EPS Trajectory (Annual)
EBITDA contracted -1.6% in 2025 -- first decline since 2022; EPS growth decelerated to +2.6%.
Adj EBITDA fell from $1,518M (2024) to $1,495M (2025) after +10.2% growth the prior year. Adj EPS
of $3.53 is a fresh record but growth decelerated materially from +8.5% to +2.6%. Management guided
5-8% EPS growth for 2026 ($3.71-$3.81 implied), which would represent a recovery but is below the
2024 growth rate. The EBITDA contraction despite positive organic growth reflects margin pressure
and portfolio transition costs.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Adj EBITDA ($M) | $1,294.8M | $1,376.4M | $1,308.4M | $1,377.2M | $1,518.2M | $1,494.6M |
| EBITDA YoY Growth | — | 6.3% | -4.9% | 5.3% | 10.2% | -1.6% |
| Adj EPS | $2.8 | $3.0 | $3.0 | $3.2 | $3.4 | $3.5 |
| EPS YoY Growth | — | 6.7% | -1.7% | 6.7% | 8.5% | 2.6% |
2026E: EPS $3.71-$3.81 (management guidance 5-8% growth). EBITDA consensus ~$1,570M. Data sourced from Daloopa.
Free Cash Flow Trajectory (Annual, USD M)
FCF is the strongest trend line -- record $1,083M in 2025, up +10% YoY.
Free cash flow has compounded at ~10% CAGR over 3 years, driven by strong CFO ($1,206M, also a record)
and normalized capex ($122M vs $180M prior year). FCF conversion (FCF/Net Income) of 147% in 2025 is
excellent for a consumer staples company. The company returned $900M to shareholders in 2025 via
dividends and buybacks. This is the one clear bright spot in the CHD financial profile and provides
a floor on valuation support.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| CFO ($M) | $990.3M | $993.8M | $885.2M | $1,039.7M | $1,164.4M | $1,205.6M |
| FCF ($M) | $891.4M | $875.0M | $706.4M | $816.2M | $984.6M | $1,083.2M |
| FCF YoY Growth | — | -1.8% | -19.3% | 15.5% | 20.6% | 10.0% |
| Diluted Shares (M) | 252.2 | 249.6 | 246.3 | 247.6 | 246.9 | 244.3 |
FCF = CFO minus capex. Shares declined to 239.6M in Q4 2025, indicating accelerating buyback pace. Data sourced from Daloopa.
Quarterly Revenue and Organic Growth
Quarterly organic showed a V-shape in 2025 but ended weak at +0.7% in Q4.
Organic growth decelerated steadily through 2024 (from +5.2% to +4.2%) then collapsed in Q1 2025
to -1.2%, driven by ~300bps of retailer destocking and weak consumer demand. Q3 2025 rebounded
sharply to +3.4% (broad-based +4.0% volume growth), but Q4 slipped back to +0.7%, dragged by VMS
(ex-VMS organic was +1.8%). The inconsistency raises questions about sustainable run-rate.
| Metric | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 | Q2 24 | Q3 24 | Q4 24 | Q1 25 | Q2 25 | Q3 25 | Q4 25 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue ($M) | $1,429.8M | $1,454.2M | $1,455.9M | $1,528.0M | $1,503.3M | $1,511.2M | $1,510.6M | $1,582.0M | $1,467.1M | $1,506.3M | $1,585.6M | $1,644.2M |
| Organic Growth | 5.7% | 5.4% | 4.8% | 5.3% | 5.2% | 4.7% | 4.3% | 4.2% | -1.2% | 0.1% | 3.4% | 0.7% |
| Gross Margin | 43.5% | 43.9% | 44.4% | 44.6% | 45.7% | 47.1% | 45.2% | 44.7% | 45.0% | 43.0% | 45.1% | 45.8% |
| Adj EPS | $0.8 | $0.9 | $0.7 | $0.7 | $1.0 | $0.9 | $0.8 | $0.8 | $0.9 | $0.9 | $0.8 | $0.9 |
Q1 2025 organic included ~300bps retailer destocking drag. Q3 2025 volume growth +4.0%. Data sourced from Daloopa.
Quarterly Gross Margin Trend
Quarterly GM improved through H2 2025, exiting at 45.8% in Q4.
After peaking at 47.1% in Q2 2024, GM dropped to 43.0% in Q2 2025 (the weakest quarter in 2 years).
However, the H2 2025 trajectory was encouraging: 45.1% (Q3) and 45.8% (Q4), driven by productivity
programs, moderating tariffs, and the higher-margin Touchland acquisition. The Q4 exit rate supports
management guidance for +100bps GM expansion in 2026.
Q2 2024 peak of 47.1% reflects favorable commodity timing. H2 2025 rebound is encouraging. Data sourced from Daloopa.
Organic Growth by Segment (Annual)
Consumer Domestic organic went negative (-0.5%) for the first time -- a serious deterioration.
The core domestic segment decelerated from +5.7% (2023) to +3.5% (2024) to -0.5% (2025). This is
particularly concerning as domestic is the largest segment and the traditional engine of growth.
International decelerated from +9.0% to +5.5% but remains healthy. Specialty Products swung from
-7.9% (2023) to +7.1% (2024) to +2.6% (2025), showing volatility. The 2026 recovery plan hinges
on domestic re-acceleration through innovation (TheraBreath toothpaste, ARM and HAMMER Deep Clean).
| Segment | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Consumer Domestic | 10.7% | 3.6% | 0.9% | 5.7% | 3.5% | -0.5% |
| Consumer International | 8.6% | 5.0% | 2.8% | 8.5% | 9.0% | 5.5% |
| Specialty Products | 0.4% | 12.0% | 3.7% | -7.9% | 7.1% | 2.6% |
Consumer Domestic is ~65% of revenue. International ~20%. Specialty ~15%. Data sourced from Daloopa.
Quarterly Organic Growth by Segment (Q1 2024 - Q4 2025)
International is the most consistent grower; Domestic is volatile around zero.
Consumer International maintained positive organic every quarter, ranging from +3.6% to +9.6%.
Consumer Domestic turned negative in Q2 2025 (-1.0%) and Q4 2025 (-0.1%), raising concerns about
the core US business. Specialty Products showed sharp volatility, from +10.3% (Q4 2024) to +0.1%
(Q2 2025). The divergence between domestic and international performance is widening.
| Segment | Q1 24 | Q2 24 | Q3 24 | Q4 24 | Q1 25 | Q2 25 | Q3 25 | Q4 25 |
|---|---|---|---|---|---|---|---|---|
| Consumer Domestic | 4.3% | 3.8% | 3.3% | 2.7% | 3.0% | -1.0% | 2.3% | -0.1% |
| Consumer International | 8.8% | 9.3% | 8.1% | 9.6% | 5.8% | 4.8% | 7.7% | 3.6% |
| Specialty Products | 7.2% | 3.9% | 7.5% | 10.3% | 3.2% | 0.1% | 4.2% | 2.8% |
Quarterly segment organic growth. Consumer Domestic negative in Q2 and Q4 2025. Data sourced from Daloopa.
Adj EPS Trajectory
EPS growth decelerating but still compounding -- $3.53 is a fresh record.
Adj EPS grew from $2.83 (2020) to $3.53 (2025), a 3.7% 5-year CAGR. Growth decelerated from
+8.5% (2024) to +2.6% (2025). The 2022 dip ($2.97, -1.7% YoY) was the only contraction, driven
by the gross margin trough. Quarterly EPS shows Q1 and Q2 are the strongest quarters seasonally.
Management guidance of 5-8% growth for 2026 implies $3.71-$3.81. Consensus at ~$3.76 (2026E)
and ~$4.00 (2027E) reflects moderate confidence in re-acceleration.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Adj EPS | $2.8 | $3.0 | $3.0 | $3.2 | $3.4 | $3.5 |
| EPS YoY Growth | — | 6.7% | -1.7% | 6.7% | 8.5% | 2.6% |
2026E ~$3.76, 2027E ~$4.00 consensus. Management 2026 guidance: 5-8% EPS growth. Data sourced from Daloopa.
Acceleration / Deceleration Analysis
| Signal | Detail | Direction |
|---|---|---|
| Revenue / Organic Growth | Organic +5.3% (2023) to +4.6% (2024) to +0.7% (2025); severe miss vs 3-4% target | Decelerating |
| Consumer Domestic | +5.7% (2023) to +3.5% (2024) to -0.5% (2025); turned negative for first time | Contracting |
| Consumer International | +9.0% (2024) to +5.5% (2025); decelerating but still healthy mid-single-digit | Decelerating (healthy) |
| Gross Margin | 41.9% trough (2022) to 45.7% (2024) to 44.7% (2025); reversed after 2yr recovery | Mixed / Slight Decline |
| Adj EPS | +8.5% (2024) to +2.6% (2025); $3.53 is a record but growth slowed materially | Decelerating |
| EBITDA | +10.2% (2024) to -1.6% (2025); first contraction since 2022 | Contracting |
| Free Cash Flow | +20.6% (2024) to +10.0% (2025); record $1,083M, 147% conversion | Accelerating |
| Share Count | 246.9M to 244.3M (-1.1%); Q4 dropped to 239.6M, accelerating buyback pace | Improving |
| H2 2025 Momentum | Q3 organic +3.4%, GM improving Q3-Q4, volume-driven growth returning | Improving |
Score Derivation
| Factor | Assessment | Impact |
|---|---|---|
| Base Score | Consistent mid-single-digit organic grower with strong FCF; 4.1% organic CAGR over 10 years; defensive staples model | 6.0 |
| Organic growth collapse | FY25 organic +0.7% vs 3-4% evergreen; Consumer Domestic went negative; EBITDA contracted | -2.0 |
| FCF strength + H2 momentum | Record FCF, improving H2 trajectory, Q3 organic +3.4% proved brand engine works | +0.5 |
| Tariff mitigation + portfolio cleanup | Reduced $190M tariff exposure to $25M; exited ~$400M lower-margin brands; buybacks accelerating | +0.5 |
| Net Adjustment | -2.0 + 0.5 + 0.5 = -1.0 | -1.0 |
| Final Score | Base 6.0 minus 1.0 net adjustment | 5/10 |
Data sourced from Daloopa and CHD earnings transcripts (FY2024, FY2025). Calendar fiscal year, reports in USD.