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Will Clorox's (CLX) 2020 Strategy Help Improve Q1 Earnings?
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The Clorox Company (CLX - Free Report) , the manufacturer and marketer of consumer and professional products, is slated to report first-quarter fiscal 2018 results on Nov 1. In the trailing four quarters, it has outperformed the Zacks Consensus Estimate by an average of 0.4%. In the preceding quarter, the company witnessed a positive earnings surprise of 2.7%.
Consumer goods behemoth is riding on its 2020 Strategy, cost containment efforts and other growth initiatives. However, the company remains vulnerable to the threats of rising commodity costs and stiff competition in the industry. Will these hurdles limit Clorox’s growth? Let’s delve deeper and find out.
How are Estimates Shaping Up?
The current Zacks Consensus Estimate for the quarter under review is $1.41, reflecting an increase of more than 3% from the prior-year period. The consensus estimate has increased by a penny in the past 30 days. Although the bottom line is portraying year-over-year growth, the rate has sharply declined from 21% witnessed in the final quarter of fiscal 2017.
Analysts polled by Zacks expect first-quarter revenue to be $1,478 million, up 2.4% from the year-ago quarter. In the preceding quarter, net sales had advanced nearly 3%.
Factors at Play
Despite a competitive retail environment, analysts anticipate higher volumes, better pricing and benefits from RenewLife (acquired in May 2016) are likely to augment sales performance. Further, focus on 2020 strategy and continued investments in innovating products and brands are also likely to have a favorable impact on the performance.
Clorox remains keen on the smooth execution of its 2020 Strategy, which is meant to be achieved through investment in brands, development of e-commerce and technological advancements. These are aim at boosting overall market share on the back of healthy performance across Cleaning, Household, Lifestyle, and International.
Per the analysts polled by Zacks, sales at Cleaning segment are expected to come in at $542 million (up 1.5% year-over-year), while for Household the same is projected to be $436 million (up 3.3%). Sales at the Lifestyle segment are envisioned to be $245 million (up 1.2%), while for International segment sales are forecasted to be $254 million (up 3.8%).
However, management has earlier pointed that competition has intensified — especially across core categories like litter and trash bags — which remains a threat to margins. Further, the company remains troubled by inflationary pressure and escalating commodity expenses. Apart from this, unfavorable currency translations, a tough pricing environment and difficult economic conditions in the International region remain causes of concern.
Clorox Company (The) Price, Consensus and EPS Surprise
Our proven model does not conclusively show that Clorox is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Clorox carries a Zacks Rank #4 (Sell) and has an Earnings ESP of -0.29%, consequently making the surprise prediction difficult.
Stocks with Favorable Combination
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Ralph Lauren Corporation (RL - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank #2.
The Hain Celestial Group, Inc. (HAIN - Free Report) has an Earnings ESP of +5.22% and a Zacks Rank #2.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
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Will Clorox's (CLX) 2020 Strategy Help Improve Q1 Earnings?
The Clorox Company (CLX - Free Report) , the manufacturer and marketer of consumer and professional products, is slated to report first-quarter fiscal 2018 results on Nov 1. In the trailing four quarters, it has outperformed the Zacks Consensus Estimate by an average of 0.4%. In the preceding quarter, the company witnessed a positive earnings surprise of 2.7%.
Consumer goods behemoth is riding on its 2020 Strategy, cost containment efforts and other growth initiatives. However, the company remains vulnerable to the threats of rising commodity costs and stiff competition in the industry. Will these hurdles limit Clorox’s growth? Let’s delve deeper and find out.
How are Estimates Shaping Up?
The current Zacks Consensus Estimate for the quarter under review is $1.41, reflecting an increase of more than 3% from the prior-year period. The consensus estimate has increased by a penny in the past 30 days. Although the bottom line is portraying year-over-year growth, the rate has sharply declined from 21% witnessed in the final quarter of fiscal 2017.
Analysts polled by Zacks expect first-quarter revenue to be $1,478 million, up 2.4% from the year-ago quarter. In the preceding quarter, net sales had advanced nearly 3%.
Factors at Play
Despite a competitive retail environment, analysts anticipate higher volumes, better pricing and benefits from RenewLife (acquired in May 2016) are likely to augment sales performance. Further, focus on 2020 strategy and continued investments in innovating products and brands are also likely to have a favorable impact on the performance.
Clorox remains keen on the smooth execution of its 2020 Strategy, which is meant to be achieved through investment in brands, development of e-commerce and technological advancements. These are aim at boosting overall market share on the back of healthy performance across Cleaning, Household, Lifestyle, and International.
Per the analysts polled by Zacks, sales at Cleaning segment are expected to come in at $542 million (up 1.5% year-over-year), while for Household the same is projected to be $436 million (up 3.3%). Sales at the Lifestyle segment are envisioned to be $245 million (up 1.2%), while for International segment sales are forecasted to be $254 million (up 3.8%).
However, management has earlier pointed that competition has intensified — especially across core categories like litter and trash bags — which remains a threat to margins. Further, the company remains troubled by inflationary pressure and escalating commodity expenses. Apart from this, unfavorable currency translations, a tough pricing environment and difficult economic conditions in the International region remain causes of concern.
Clorox Company (The) Price, Consensus and EPS Surprise
Clorox Company (The) Price, Consensus and EPS Surprise | Clorox Company (The) Quote
What Does the Zacks Model Say?
Our proven model does not conclusively show that Clorox is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Clorox carries a Zacks Rank #4 (Sell) and has an Earnings ESP of -0.29%, consequently making the surprise prediction difficult.
Stocks with Favorable Combination
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Avon Products, Inc. has an Earnings ESP of +2.94% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ralph Lauren Corporation (RL - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank #2.
The Hain Celestial Group, Inc. (HAIN - Free Report) has an Earnings ESP of +5.22% and a Zacks Rank #2.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>