Clorox lifts annual profit view after beating quarterly estimates on solid demand
Adds shares in paragraph 11, analyst comment in paragraph 7
By Anuja Bharat Mistry and Jessica DiNapoli
Oct 30 (Reuters) -Clorox CLX.N raised its annual profit forecast after beating quarterly results on Wednesday, betting on robust demand for its cleaning and homecare products, after lapping the impact from a cyberattack last year.
The bleach maker's first-quarter sales surged as its efforts of introducing new and improved products through increased advertising investments across categories helped in attracting value-seeking consumers.
The Pine-Sol maker's volumes jumped after increased promotions further strengthened sales after declining for two consecutive quarters.
The company's net sales rose 38% in the health and wellness business, which contributes 35% to total revenue, while the segment's volumes were up 38 percentage points.
With waning impact from supply chain disruptions caused by the cyberattack, Clorox's margins were bolstered by higher volumes and cost-saving benefits.
"We saw consumption slowing down at the end of last fiscal year," CFO Kevin Jacobsen told Reuters, adding that the company expects consumers to remain under pressure this year.
While discounts and promotions helped Clorox win back customers in the reported quarter, that strategy has its limits as the company, like other CPG brands, "faces a challenging environment in which value-conscious consumers are on the hunt for a deal," Zak Stambor, analyst with eMarketer said.
Clorox's quarterly gross margin expanded 740 basis points to 45.8%.
While Clorox and Colgate-Palmolive CL.N reported an uptick in sales volumes, Kimberly-Clark KMB.N was hit by consumers swapping its pricey goods for cheaper alternatives.
Clorox's revenue rose 27% to $1.76 billion in the quarter ended Sept. 30, beating estimates of an 18.8% increase to $1.65 billion.
Shares of the company, which maintained annual sales forecast, were up about 3% in extended trading.
On an adjusted basis, it earned $1.86 per share, compared with analysts' estimate of $1.39 per share, as per data compiled by LSEG.
For fiscal 2025, the company expects earnings per share to be between $6.65 and $6.90, compared with its prior forecast range of $6.55 to $6.80.
Reporting by Anuja Bharat Mistry in Bengaluru and Jessica DiNapoli in New York; Editing by Maju Samuel
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