Company: CHD
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000950170-25-061624
Chunk: 5

Company: CHURCH & DWIGHT CO INC /DE/
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 2
Chunk 5
---
 commodity cost volatility, and consumer and economic uncertainty primarily due to rapid changes in U.S. trade policies including recent sweeping tariff increases, as well as retaliatory tariffs by foreign countries.  This global uncertainty has also resulted in product purchase cancellations and boycotts by customers and consumers globally.  Additionally, U.S. consumers are increasingly worried about persistent inflation and looming tariffs, leading them to cut back on discretionary spending.  We believe that retailers are lowering their consumer-packaged goods inventories and making targeted decisions to build inventory of certain products in advance of additional tariffs.  We will continue to evaluate these evolving developments and have begun to take action to mitigate their impact on our business, including taking strategic actions for certain business lines (see Strategic Business Decisions), shifting production and relocating manufacturing operations, finding alternative sources of supply, most notably ceasing the import of Waterpik flossers from China into the U.S., potential price increases, adjusting inventories, lobbying and seeking exemptions with respect to tariffs.  While the tariff situation remains fluid, we are focused on managing through these challenges.  From a gross risk perspective, we are currently projecting a twelve-month run-rate gross tariff exposure of approximately $190.0.  We expect that the impact of our strategic business decisions and a series of rapid supply chain actions, such as ceasing the import of Waterpik flossers from China into the U.S., will reduce our tariff exposure by approximately 80%.  Over the next 12 months, we believe our remaining tariff exposure can be mitigated through additional supply chain efforts and surgical pricing.

Strategic Business Decisions

On May 1, 2025, we announced that we will be taking strategic actions for the Flawless, Spinbrush and Waterpik showerhead businesses, which includes shutting down or selling these businesses.  These businesses generate approximately $150.0 of annual Net Sales.  We expect to record a charge of $60.0 to $80.0 in the second quarter of 2025 as a direct result of these actions, primarily comprised of non-cash charges related to impairments of intangible and fixed assets, as well as inventory reserves.