Clorox Jumps After Quarterly Sales Top Estimates
(Bloomberg) -- Clorox Co. shares rose after the maker of cleaning products reported better-than-expected sales, backing up Chief Executive Officer Linda Rendle’s bet that higher demand for cleaning products will outlast the pandemic.
- Revenue of $1.8 billion in its fiscal first quarter, which ended Sept. 30, topped analyst projections of $1.7 billion. While sales fell from the year-ago period due to pandemic-related behavior, the increase shows Clorox is holding on to some its gains.
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- Wall Street was pleased that Clorox grew or held its market share across the majority of its businesses. Demand for the company’s cleaning products, like disinfecting wipes, rose as the delta variant stoked virus fears again.
- Commodity and logistics inflation remains a key challenge, but Clorox’s Rendle said the company is “pulling multiple levels” to bring it under control. This includes higher prices and “stepping up our cost-reduction initiatives,” she said in a statement.
- The report may fuel optimism for Clorox’s broader portfolio. Sales of its cat litter and Brita products both grew by double digits due to merchandising improvements and back-to-school sales.
- Gross margin, a measure of profitability, was 37% -- above expectations. However, there’s pressure on the horizon this fiscal year. The company expects the gauge to decline by 300 to 400 basis points, “primarily due to higher commodity costs and manufacturing and logistics costs.” Clorox expects “a return to gross margin expansion in the fourth quarter.”
- The stock rose as much as 5.5% in late trading in New York. Shares declined 19% in 2021 through Monday’s close.
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