Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

The Clorox Company (CLX - Analyst Report) came up with higher-than-expected earnings for fourth-quarter fiscal 2013. The company’s earnings of $1.38 per share surpassed the Zacks Consensus Estimate of $1.34 and increased nearly 4.5% from the year-ago quarter’s earnings of $1.32.

Quarterly earnings of the company were primarily driven by increased pricing and effective cost management, partially offset by adverse foreign currency exchange rates along with higher manufacturing and logistics costs.

Net sales marginally improved year over year to $1,547 million from $1,541 million in the year-ago quarter. Benefit from increased pricing, favorable product mix and reduced trade spending were mostly offset by unfavorable foreign exchange rates and reduced volume. Total volume declined 3% in the quarter. Moreover, total revenue came below the Zacks Consensus Estimate of $1,581 million.

Revenue by Segment

Sales in the Cleaning segment inched down 1% to $432 million, primarily due to a decline of 4% in volume. During the quarter, the segment witnessed volume growth in its Professional Products business while shipment of disinfecting wipes declined. Volume at Laundry business remained flat year over year.

Household sales inched up 2% to $568 million primarily due to the company’s increased pricing strategy, partially offset by a 1% decline in volume. Volumes in the quarter were adversely affected by a decline in charcoal resulting from cold weather in the U.S. in April and May. However, Cat Litter volumes improved on account of introduction of new products and increased merchandise support.

Sales at the Lifestyle segment hiked 2% to $239 million, primarily due to an increase of Brita products prices. Segment volume remained flat year over year.

In the International business segment, Clorox’s sales inched down 1% to $308 million, due to 6% decline in volume and unfavorable currency translation, partially offset by increased pricing and favorable product mix.

Costs and Margins

Clorox’s gross margin expanded 130 basis points (bps) to 44.0% from 42.7% in the year-ago quarter. The year-over-year increase in gross margin was primarily due to the company’s price increase and strong cost saving initiatives, partially offset by increased manufacturing and logistics costs. Operating margin improved 60 bps driven primarily by increased gross margin, partially offset by higher advertising and sales promotion expenses.

Balance Sheet and Cash Flow

Clorox ended the fiscal with cash and cash equivalents of $299 million and long-term debt of $2,170 million. During fiscal 2013, the company generated $777 million net cash from operations, exhibiting an increase of $157 million from the year-ago period.

Guidance

Looking ahead, Clorox reaffirmed its fiscal 2014 outlook with sales growth forecast of 2%–4% while earnings are expected to range from $4.55 – $4.70 per share.

The company, which competes with Church & Dwight Company Inc. (CHD - Snapshot Report), Colgate-Palmolive Company (CL - Analyst Report) and Procter & Gamble Company (PG - Analyst Report) continues to expect operating margin to expand by 25 to 50 basis points in fiscal 2014, on the back of strong cost savings, the benefit of price increases and flat commodity costs forecasts.

Headquartered in Oakland, CA, Clorox is primarily engaged in the production, marketing and sale of consumer products in the U.S. and international markets. This Zacks Rank #4 (Sell) company sells its products primarily through mass merchandisers, grocery stores and other retail outlets. Clorox manufactures products in more than 24 countries and markets them in more than 100 countries.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%