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Clorox's Annual Report Reveals Significant Progress, Stock Up

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The Clorox Company (CLX - Free Report) released the seventh integrated annual report (fiscal 2018), encompassing information regarding the brands’ success in both business and corporate responsibility matters. The report reveals that Clorox’s sales grew 3% in fiscal 2018 compared with a 4% increase registered a year ago. Further, it shows that product innovation contributed to nearly 3 points to sales in the fiscal year, marking the eighth straight year of growth. Moreover, product portfolio with sustainability improvements gained nearly 15 percentage point, summing up to 49%, nears to 50% that is anticipated to be achieved by 2018-end.

Through this integrated annual report, Clorox emphasizes on its brands, thus reinventing itself to offer best products to consumers. Also, these are important actions to all its stakeholders, and thus achieving sustainable and profitable growth.

Following the release of this integrated report, shares of Clorox increased 1.2% yesterday. In the past three months, this Zacks Rank #2 (Buy) stock has advanced 15.4%, outperforming the industry’s 5.4% rally.



 

Growth Strategies

Clorox's is performing exceedingly well, courtesy of its solid growth initiatives, including 2020 Strategy, Go Lean Strategy, enhancement of e-commerce business and disciplined capital allocation.  

Additionally, the company remains keen on the smooth execution of its 2020 Strategy, which is aimed at improving categories and overall market share. Clorox intends to achieve certain long-term aspirations, including net sales growth of 3-5%, EBIT margin expansion of 25-50 bps and free cash flow of 10-12% of sales, all on a yearly basis, through this strategy. Notably, its investments in brands; e-commerce development; technological advancements; enhancement of growth culture and focus on the 3Ds - desire, decision and delight are likely to act as key catalysts behind these aspirations. Also, the company is nearing its 2020 target of $500 million from e-commerce sales.

This apart, management seems to be well on track with its Go Lean Strategy to drive margins. Clorox’s commitment toward investing in product and brand differentiation to safeguard value proposition is also commendable. The company remains focused on strong investments in demand building, including digital marketing, e-commerce and product innovation pipeline as well. Internationally, the Go Lean Strategy consistently focuses on improving margins through operational efficiencies.

Other Key Picks in the Consumer Staples Space

The Chefs' Warehouse, Inc. (CHEF - Free Report) has an impressive long-term earnings growth rate of 19% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Procter & Gamble Company (PG - Free Report) has an expected long-term earnings growth rate of 7% and a Zacks Rank #2.

Archer Daniels Midland Company (ADM - Free Report) pulled off an average positive earnings surprise of 18.6% in the trailing four quarters. The company carries a Zacks Rank of 2.

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