Company: CHD
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000950170-25-019801
Chunk: 27

Company: CHURCH & DWIGHT CO INC /DE/
Filing Date: 2025-02-13
Form: 10-K
Item: Item 1A
Chunk 27
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 success is directly dependent on the reputation and success of our brands, particularly our power brands.  Seven of our brands are designated as "power brands" because they compete in large categories, and we believe they have the potential for significant global expansion.  Those seven brands are ARM & HAMMER®; OXICLEAN®; VITAFUSION® and L’IL CRITTERS®; BATISTE®; WATERPIK®; THERABREATH®; and HERO® and represent approximately 70% of our net sales and profits.  The effectiveness of these brands could suffer if our marketing plans or product initiatives do not have the desired impact on a brand’s image or its ability to attract consumers.  Our brands could suffer damage to their reputations due to real or perceived, sustainability, quality or safety issues, including as a result of, among other things, significant product recalls, product-related litigation, defects or impurities in our products, product misuse, changing consumer perceptions of certain ingredients or environmental impacts (including packaging, energy and water use and waste management), or allegations of product tampering.  In addition, as our sales on various e-commerce platforms grow, we may be unable to prevent sales of counterfeit, pirated, or stolen goods, unlawful or unethical sales, unauthorized resellers online, or sales in violation of our policies. During the third quarter of 2024, the Company continued to experience a decline in market share and a deterioration in the financial performance for its Vitamins, Minerals and Supplements (“VMS”) business, which includes the VITAFUSION and L’IL CRITTERS trade names, primarily due to significant product competition coming from new category entrants, including private label, and supply chain challenges that resulted in increased shelf space and/ or display for certain of our competitors.  The continued decline in profitability caused management to reassess its long-term strategy and financial outlook of the business.  The revised financial outlook reflects lower estimates of future sales growth and cash flows which resulted in a triggering event in the third quarter.  The triggering event required the Company to review the carrying value of long-lived assets supporting the business in connection with the preparation of the Company’s financial statements, resulting in impairment charges of $357.1 in the quarter ended September 30, 2024.

Additionally, claims made in our marketing campaigns may become subject to litigation alleging false advertising and could cause us to alter our marketing plans and may affect sales or result in the imposition of significant damages against us.