Company: CHD
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000950170-25-019801
Chunk: 262

Company: CHURCH & DWIGHT CO INC /DE/
Filing Date: 2025-02-13
Form: 10-K
Item: Item 8
Chunk 262
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 on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.  The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Trade Names and Other Intangibles, Net –Vitamins and Waterpik — Refer to Notes 1 and 7 to the Consolidated Financial Statements

Critical Audit Matter Description

The Company owns trade names that are considered to have indefinite lives.  These trade names are required to be measured periodically for impairment. 

During the third quarter of 2024, the Company continued to experience a decline in market share and deterioration in the financial performance of its Vitamins, Minerals and Supplements (“VMS”) business, which includes the VITAFUSION and L’IL CRITTERS trade name, primarily due to competition from new category entrants, including private label.  The continued decline in profitability caused management to reassess its long-term strategy and financial outlook of the business.  The revised financial outlook reflected lower estimates of future sales growth and cash flow, which resulted in a triggering event.  The triggering event required the Company 

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to evaluate its ability to recover the carrying value of the trade name by comparing the carrying value of the trade name to its fair value.  The valuation resulted in a full impairment of the $281.3 million VITAFUSION and L’IL CRITTERS trade name as of September 30, 2024.   

Additionally, the Company’s global WATERPIK business has continued to experience a decline in customer demand for many of its products, primarily due to lower consumer spending for discretionary products and a growing number of water flosser consumers switching to more value-branded products.  As a result, the business has experienced declining sales and profits resulting in a reduction in expected