- Clorox benefited from elevated demand for cleaning products earlier in the pandemic, but higher costs and supply disruptions are now squeezing growth and profitability. In response, the company is cutting costs and raising prices on 85% of its products.
- The stock has declined 18.7% in 2022 and has dropped 25.9% for the past one year.
Clorox misses by $0.19, beats on revs; guides FY22 EPS below consensus
- Reports Q2 (Dec) earnings of $0.66 per share, excluding non-recurring items, $0.19 worse than the S&P Capital IQ Consensus of $0.85; revenues fell 8.2% year/year to $1.69 bln vs the $1.66 bln S&P Capital IQ Consensus.
- The decline in net sales reflects a 10-point decline in volume and 2 points of favorable price mix. Foreign exchange was flat, and organic sales for the quarter declined 8%.
- "Although we expect cost pressures will continue through fiscal year 2022, we're confident we have the right strategy and are taking the right actions to strengthen our competitive position, build a stronger, more resilient company, and create long-term shareholder value."
- Co issues downside guidance for FY22, sees EPS of $4.25-4.50, excluding non-recurring items, vs. $5.44 S&P Capital IQ Consensus.
- Sees net sales decline of 1% to 4% (organic sales decline of 1% to 4%). Reflects a sales decline of 7% in the first half of fiscal year 2022, or an increase of 19% on a two-year stack basis, compared to 27% sales growth in the first half of fiscal year 2021. By the fourth quarter, the company expects sales to return to its long-term sales growth target of 3% to 5%.
- Gross margin decline of about 750 basis points, primarily due to higher than previously anticipated commodity and manufacturing & logistics costs, with the assumption of a return to gross margin expansion in the fourth quarter.
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