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  "docSlug": "8b6a62f49fba",
  "documentTitle": "Church & Dwight Co., Inc. (CHD)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-09-05 00:00:00",
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  "pageNumber": 38,
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  "notes": "Uses a CEO quote to contradict the market's expectations for growth.",
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      "text": "The most recent cycle of innovation has just not driven those behaviors resulting in a soft cycle for the cosmetics category in the U.S. as innovation and newness price the market has not driven the expected growth.",
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      "kind": "chart",
      "text": "ULTA's Shares Crash 30%",
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      "kind": "image",
      "text": "CHD's Brands At ULTA",
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      "kind": "paragraph",
      "text": "On August 29th, ULTA Beauty (Nasdaq: ULTA) blindsided investors with a guidance reduction. As a leading retailer of women's cosmetics and related accessories, ULTA is a bellwether for category demand. The CEO's comments about a soft cycle in cosmetics where recent product innovation has not driven expected growth should be a wake-up warning for CHD investors. FLAWLESS has proven to be a product with limited staying power and short-cycle demand. In fact, both FLAWLESS and Batiste are distributed through ULA.",
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      "kind": "quote",
      "text": "We believe that the main issue driving this softer cycle in cosmetics is that the newness and innovation that have been the focus of most brands this year has just not driven the kind of incremental growth we've enjoyed for some period of time...",
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      "kind": "quote",
      "text": "We believe that the main issue driving this softer cycle in cosmetics is that the newness and innovation that have been the focus of most brands this year has just not driven the kind of incremental growth we've enjoyed for some period of time. Over the past several years, we've seen strong growth in cosmetics driven by new rituals and application techniques, like contouring and brow styling, and innovative new product formats like liquid lip, palettes and minis. This innovation resulted in new makeup routines requiring new products which drove strong incremental growth. The most recent cycle of innovation has just not driven those behaviors resulting in a soft cycle for the cosmetics category in the U.S. as innovation and newness price the market has not driven the expected growth. — ULTA CEO Q2 2019 Conf Call",
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      "kind": "source-note",
      "text": "Source: Bloomberg",
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      "kind": "source-note",
      "text": "Source: ULTA Batiste and ULTA FLAWLESS",
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      "kind": "title",
      "text": "Warning From ULTA Beauty",
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      "evidence": "The document extensively details the problems with CHD, including rising debt, low-quality EBITDA, worrisome strategy shifts, and concerning CEO history.",
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      "name": "Cost Of Inaction",
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      "evidence": "The overall thesis implies that failing to act on Spruce Point's analysis could lead to significant financial losses for investors holding onto CHD stock.",
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      "objective": "The cost of not selling CHD",
      "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point",
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