Feb 2, 2023
Clorox Boosts Full-Year Forecast on Price Hikes, Cost Cuts
(Bloomberg) -- Clorox Co. raised its annual forecast as it benefits from higher prices across its diverse portfolio of household staples.
The company now expects organic sales, which excludes currency fluctuations, to be at least flat for the year ended in June, compared with a prior assumption for a decline of as much as 3%. Adjusted earnings per share are projected to be between $4.05 and $4.30 per share, up from a previous outlook of $3.85 to $4.22 per share, Clorox said Thursday.
The maker of cleaning supplies, cat litter and ranch dressing has raised prices as it juggles higher costs for commodities and manufacturing. That, along with cost cuts and supply-chain improvements, has helped Clorox overcome a drop in unit sales in three of its four segments in the most recent quarter. The company said volume declined 10% across all of its products.
“We’re holding share in spite of taking a significant amount of pricing,” Chief Financial Officer Kevin Jacobsen said in an interview. “And we’re not seeing any meaningful trade down to private label.”
Revenue and organic sales growth surpassed analyst estimates in the quarter ended Dec. 31. Gross margin, a measure of profitability, also topped estimates, rising from the year-earlier period for the first time in seven quarters. The company maintained its gross margin guidance for the year.
Consumer demand for cleaning products has normalized since a wave of panic buying in the early days of the pandemic. Sales of professional products are lower in part because people aren’t in the office as much as they used to be, Clorox said. At the same time, shoppers are snapping up more bags and wraps, and cat litter sales also increased from a year ago.
Shares of Clorox rose 2.8% in postmarket trading at 4:13 p.m. New York time.
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