Clorox Reports Flat Net Sales in Q4

Net sales for Clorox in Q4 remained flat at $1.8 billion versus the prior-year quarter, as lower shipments were offset by the benefit of pricing. 

 

Organic sales were up 1%. The three-year average growth rate for net sales was 3%.

 

The results reflect the fourth quarter, which ended June 30.

 

Gross margin of 37.1% was flat versus the year-ago quarter, due mainly to ongoing elevated commodity costs and manufacturing and logistics costs, offset by the benefits of pricing and cost savings initiatives.

 

Diluted net earnings per share (diluted EPS) increased 4% to 81 cents from 78 cents in the year-ago quarter, reflecting the previous year's 17-cent noncash charge in connection with investments and related arrangements made with a Professional Products business unit supplier. This was partially offset by a 12-cent charge in the current period related to investments in the company's long-term strategic digital capabilities and productivity enhancements.

 

Adjusted EPS decreased 2% to 93 cents versus 95 cents in the year-ago quarter, driven mainly by a higher effective tax rate, partially offset by lower advertising.

 

“Over this quarter and the fiscal year, we navigated through challenging operating conditions by taking pro-active steps to rebuild margin and invest in the areas of the business that would best position Clorox for long-term success,” said CEO Linda Rendle. “This has allowed us to report results in line with our expectations and deliver another quarter of sequential margin improvement. The streamlined operating model we announced today to create a faster, simpler company is designed to increase efficiency, move decision-making closer to consumers and customers, and enable us to better meet their needs. This is another important step in implementing our IGNITE strategy of reimagining how we work, complementing the digital transformation initiative that's already underway.”

Net sales decreased 5%, with lower sales in all three businesses. The decrease was driven by 18 points of lower volume, which was partially offset by 13 points of favorable price mix.

Cleaning sales decreased, driven by the continued normalization of consumer demand and reduction in retailer inventories of disinfecting wipes, which were partially offset by favorable price mix. Professional Products sales decreased, primarily as the result of reduced demand in the commercial cleaning sector due to low office occupancy rates and a tight labor market for cleaning professionals.

 

VMS sales decreased, primarily due to the ongoing shift away from noncore brands and a reduction in retailer inventories.