Company: CHD
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000950170-25-019801
Chunk: 19

Company: CHURCH & DWIGHT CO INC /DE/
Filing Date: 2025-02-13
Form: 10-K
Item: Item 1A
Chunk 19
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 affect our production cost. Additionally, increased tariffs, or proposed increases to tariffs, imposed by the U.S. or other countries could have the impact of increasing costs on a wide range of products and services, including on our products and items used to manufacture and deliver our products, and could lead to increased prices, price volatility and reduced demand for our products.  

From time to time, we use hedge agreements to mitigate the volatility of commodities and diesel fuel prices.  The hedge agreements are designed to add stability to product costs, enabling us to make pricing decisions and lessen the economic impact of abrupt changes in prices over the term of the contract.  However, in periods of declining fuel or other commodity prices, the hedge agreements can have the effect of locking us in at above-market prices.

•Loss of any of our principal customers could significantly decrease our sales and profitability.  

A limited number of customers account for a large percentage of our net sales and/or net sales of specific product lines.  Walmart is our largest customer, accounting for approximately 23% of net sales in 2024, 23% of net sales in 2023, and 24% of net sales in 2022.  Our top four customers accounted for approximately 43%, 44% and 42% of net sales in 2024, 2023 and 2022 respectively.  We expect that a significant portion of our net sales will continue to be derived from a small number of customers and that these percentages may increase if the growth of mass merchandisers continues.  As a result, changes in the strategies of any of our largest customers, including a reduction in the number of brands they carry or of shelf space they dedicate to private label products, could materially harm our net sales and profitability.  Any loss of or significant reduction in sales to one of our key customers could have a material adverse effect on our business, financial condition and results of operations.  Changes in consumer behavior, including continued shifting to online shopping instead of physical retail shopping, could also impact our sales to our largest customers.  Some of our retail customers have experienced and may experience in the future declining financial performance, which could affect their ability to pay amounts due to us on a timely basis or at all. If these impacts are prolonged, they can further increase the difficulty of planning for operations. Moreover, the use of evolving technology by our customers to develop more complex pricing models may lead to category pricing pressures.  We could also lose a significant customer due to customer 

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