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The Clorox Company

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Clorox outperformed the industry in the past three months driven by a robust earnings surprise history. In fourth-quarter fiscal 2018, the company reported seventh straight earnings beat. Although sales missed estimates, it increased year over year owing to gains from the Nutranext acquisition. The improvement was somewhat compensated by negative impact of both Aplicare divestiture and foreign currency exchange rates, particularly in Argentina. Higher volumes driven by innovation and rise in prices also contributed to revenue growth. For fiscal 2019, management issued an encouraging outlook. However, the company has been witnessing strained gross margins for a while now due to higher elevated commodity and logistics expenses. Unfortunately, this is likely to continue in fiscal 2019. Nevertheless, the company remains well on track with its 2020 Strategy, which is aimed at bolstering growth for the improvement of categories and overall market share.


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