CHD · 10-Q · 2026Q3 · Full report

Gross Margin Drivers

CHURCH & DWIGHT CO INC /DE/ · 2026-10-30 · Importance 43 · Surprise 40 · No source text

Third-quarter 2026 gross profit increased $35.0 million to $749.4 million, and gross margin expanded 170 basis points to 46.8%. Productivity programs added 150 basis points, favorable volume and mix added 50 basis points, and acquisition mix and business exits added 160 basis points; higher manufacturing and transportation costs reduced margin by 180 basis points, partly offset by tariff refunds, while foreign exchange reduced it by 10 basis points. Nine-month gross profit increased $103.7 million to $2,124.7 million and gross margin rose 190 basis points to 46.2%; excluding prior-year exit-related costs, margin rose 120 basis points. In that adjusted nine-month comparison, productivity and volume/mix contributed 150 and 100 basis points, respectively, while higher manufacturing and transportation costs reduced margin by 260 basis points.

Key facts

• Third-quarter 2026 gross profit was $749.4 million, up $35.0 million, and gross margin increased 170 basis points year over year. source
• Gross profit for the first nine months of 2026 was $2,124.7 million, up $103.7 million, and gross margin increased 190 basis points year over year. source
• The Company paid approximately $23.0 million in IEEPA tariffs and received approximately $17.1 million in phase II refunds in the third quarter of 2026, recorded as a reduction in cost of sales. source
• Operating margin increased 210 basis points to 18.2% in the third quarter of 2026 and 90 basis points to 18.7% in the first nine months of 2026. source
• Third-quarter 2026 gross-margin change included 150 basis points from productivity, 50 basis points from favorable volume and mix, and 160 basis points from acquisition mix and business exits, offset by 180 basis points of higher manufacturing and transportation costs and 10 basis points of unfavorable foreign exchange. source
• Excluding prior-year one-time exit costs, first-nine-month 2026 gross margin increased 120 basis points, including 150 basis points from productivity, 100 basis points from favorable volume and mix, and 130 basis points from acquisitions and business exits, offset by 260 basis points of higher manufacturing and transportation costs. source

Impact estimates