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Looming Cyber Attack Effects to Hurt Clorox's (CLX) Q1 Earnings
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The Clorox Company (CLX - Free Report) is likely to register top and bottom-line declines when it reports first-quarter fiscal 2024 earnings on Nov 1. The company’s results are likely to have been affected by the pressures from the recent cyber attack incident and the resulting delays.
The Zacks Consensus Estimate for quarterly revenues is pegged at $1.3 billion, suggesting a decline of 25.5% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for the quarterly loss has moved down significantly in the past 30 days from earnings of $1.42 to a loss per share of 20 per share. The consensus mark indicates a significant decline from the earnings of 93 cents reported in the prior-year quarter.
The consumer and professional products company has a trailing four-quarter earnings surprise of 36.1%, on average. CLX delivered an earnings surprise of 40.3% in the last reported quarter.
Clorox has recently been facing the impacts of a recent cyber security attack, which is likely to have weighed significantly on its first-quarter fiscal 2024 performance. The company’s recently released preliminary results for the fiscal first quarter indicated soft top and bottom lines due to the significant financial impacts of the cybersecurity attack, which was first disclosed in August 2023.
CLX revealed that the cyber attack resulted in order processing delays and significant product shortages, which are expected to have affected its sales performance in the fiscal first quarter.
On the preliminary release, Clorox expected first-quarter fiscal 2024 net sales to decrease 28-23% year over year. The decline can be primarily attributed to the disruptions caused by the cybersecurity attack. This is a significant deviation from the company's prior expectation of mid-single-digit sales growth.
Organic sales are expected to decrease 26-21% for the quarter in contrast to the earlier stated mid-single-digit growth. We anticipate organic sales to decline 21.9% in the fiscal first quarter, backed by a 31.5% decline in volume caused by the order processing delays and product shortages, offset by a 9.6% rise in pricing.
Clorox anticipated an increase in the gross margin. However, the company’s preliminary expectations for the gross margin indicate a decline from the year-ago quarter’s reported figure. The impacts of the cybersecurity attack, including lower cost absorption due to reduced volume, have more than offset the benefits of pricing, cost savings and supply-chain optimization.
Our estimate for the company’s gross margin is pegged at 28.8% for the fiscal first quarter, indicating a decline of 720 basis points (bps) from the year-ago quarter.
On the preliminary release, the company predicted an adjusted EPS between a loss of 40 cents and a break even. The cybersecurity attack's impacts, including lower cost absorption and fixed operating expenses, offset the benefits of pricing, cost savings and supply-chain improvements. On a GAAP basis, the company anticipates a loss of 35-75 cents per share.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Clorox this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Clorox has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00%.
Stocks Poised to Beat Earnings Estimates
Here are some companies that have the right combination of elements to post an earnings beat:
e.l.f. Beauty (ELF - Free Report) currently has an Earnings ESP of +0.42% and sports a Zacks Rank #1. The company is expected to register year-over-year top and bottom-line growth when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for e.l.f. Beauty’s quarterly revenues is pegged at $197.3 million, calling for growth of 61.2% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for ELF’s quarterly EPS is pegged at 54 cents, indicating an improvement of 50% from the year-ago quarter. e.l.f. Beauty has an earnings surprise of 108.3% in the last reported quarter.
Church & Dwight Co. (CHD - Free Report) currently has an Earnings ESP of +2.21% and a Zacks Rank #3. The company’s top line is expected to increase year over year when it reports third-quarter results. The Zacks Consensus Estimate for CHD’s quarterly revenues is pegged at $1.43 billion, suggesting a rise of 8.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Church & Dwight’s quarterly EPS is pegged at 68 cents, which indicates a 10.5% decline from the year-ago reported figure. CHD has a trailing four-quarter earnings surprise of 12.1%, on average.
Monster Beverage (MNST - Free Report) currently has an Earnings ESP of +1.98% and a Zacks Rank #3. MNST is likely to register year-over-year top and bottom-line growth when it reports the third-quarter 2023 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.86 billion, which suggests growth of 14.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Monster Beverage’s quarterly earnings is pegged at 40 cents per share, suggesting an increase of 33.3% from the year-ago quarter’s reported number. MNST has delivered an earnings beat of 2.2%, on average, in the trailing four quarters.
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Looming Cyber Attack Effects to Hurt Clorox's (CLX) Q1 Earnings
The Clorox Company (CLX - Free Report) is likely to register top and bottom-line declines when it reports first-quarter fiscal 2024 earnings on Nov 1. The company’s results are likely to have been affected by the pressures from the recent cyber attack incident and the resulting delays.
The Zacks Consensus Estimate for quarterly revenues is pegged at $1.3 billion, suggesting a decline of 25.5% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for the quarterly loss has moved down significantly in the past 30 days from earnings of $1.42 to a loss per share of 20 per share. The consensus mark indicates a significant decline from the earnings of 93 cents reported in the prior-year quarter.
The consumer and professional products company has a trailing four-quarter earnings surprise of 36.1%, on average. CLX delivered an earnings surprise of 40.3% in the last reported quarter.
The Clorox Company Price and EPS Surprise
The Clorox Company price-eps-surprise | The Clorox Company Quote
Factors to Note
Clorox has recently been facing the impacts of a recent cyber security attack, which is likely to have weighed significantly on its first-quarter fiscal 2024 performance. The company’s recently released preliminary results for the fiscal first quarter indicated soft top and bottom lines due to the significant financial impacts of the cybersecurity attack, which was first disclosed in August 2023.
CLX revealed that the cyber attack resulted in order processing delays and significant product shortages, which are expected to have affected its sales performance in the fiscal first quarter.
On the preliminary release, Clorox expected first-quarter fiscal 2024 net sales to decrease 28-23% year over year. The decline can be primarily attributed to the disruptions caused by the cybersecurity attack. This is a significant deviation from the company's prior expectation of mid-single-digit sales growth.
Organic sales are expected to decrease 26-21% for the quarter in contrast to the earlier stated mid-single-digit growth. We anticipate organic sales to decline 21.9% in the fiscal first quarter, backed by a 31.5% decline in volume caused by the order processing delays and product shortages, offset by a 9.6% rise in pricing.
Clorox anticipated an increase in the gross margin. However, the company’s preliminary expectations for the gross margin indicate a decline from the year-ago quarter’s reported figure. The impacts of the cybersecurity attack, including lower cost absorption due to reduced volume, have more than offset the benefits of pricing, cost savings and supply-chain optimization.
Our estimate for the company’s gross margin is pegged at 28.8% for the fiscal first quarter, indicating a decline of 720 basis points (bps) from the year-ago quarter.
On the preliminary release, the company predicted an adjusted EPS between a loss of 40 cents and a break even. The cybersecurity attack's impacts, including lower cost absorption and fixed operating expenses, offset the benefits of pricing, cost savings and supply-chain improvements. On a GAAP basis, the company anticipates a loss of 35-75 cents per share.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Clorox this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Clorox has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00%.
Stocks Poised to Beat Earnings Estimates
Here are some companies that have the right combination of elements to post an earnings beat:
e.l.f. Beauty (ELF - Free Report) currently has an Earnings ESP of +0.42% and sports a Zacks Rank #1. The company is expected to register year-over-year top and bottom-line growth when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for e.l.f. Beauty’s quarterly revenues is pegged at $197.3 million, calling for growth of 61.2% from the figure reported in the prior-year quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ELF’s quarterly EPS is pegged at 54 cents, indicating an improvement of 50% from the year-ago quarter. e.l.f. Beauty has an earnings surprise of 108.3% in the last reported quarter.
Church & Dwight Co. (CHD - Free Report) currently has an Earnings ESP of +2.21% and a Zacks Rank #3. The company’s top line is expected to increase year over year when it reports third-quarter results. The Zacks Consensus Estimate for CHD’s quarterly revenues is pegged at $1.43 billion, suggesting a rise of 8.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Church & Dwight’s quarterly EPS is pegged at 68 cents, which indicates a 10.5% decline from the year-ago reported figure. CHD has a trailing four-quarter earnings surprise of 12.1%, on average.
Monster Beverage (MNST - Free Report) currently has an Earnings ESP of +1.98% and a Zacks Rank #3. MNST is likely to register year-over-year top and bottom-line growth when it reports the third-quarter 2023 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.86 billion, which suggests growth of 14.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Monster Beverage’s quarterly earnings is pegged at 40 cents per share, suggesting an increase of 33.3% from the year-ago quarter’s reported number. MNST has delivered an earnings beat of 2.2%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.