Things You Need To Know Before Clorox's (CLX) Q2 Earnings
Zacks Investment Research | Jan 29, 2020 08:20PM ET
The Clorox Company (NYSE:CLX) (NYSE:CL) is slated to report second-quarter fiscal 2020 results on Feb 4, before the market opens. This Oakland, CA-based manufacturer and marketer of consumer products has a trailing four-quarter positive earnings surprise of 2.2%, on average. Investors are counting on another beat by Clorox in the to-be-reported quarter. If all goes well, this will be the third straight quarter of earnings beat.
Key Factors to Note
Clorox has been witnessing operational headwinds in the Charcoal, and Bags and Wraps businesses, which have been hurting its Household segment, and in turn the top line for a while now. Management had earlier guided a decline in sales during first-half fiscal 2020. In the last earnings call, the company projected sales decline for the quarter under review, primarily due to unfavorable currency environment, partly offset by growth in organic sales. Meanwhile, the Zacks Consensus Estimate for total revenues suggests year-over-year decline of 3% to $1,429 million.
We note that the Zacks Consensus Estimate for sales for Household segment is pegged at $365 million, which indicates year-over-year decline of 7%. Meanwhile, the consensus estimates for sales for Cleaning and International segments stand at $488 million and $233 million, which suggest declines of 2.5% and 5%, respectively, from the year-ago period. However, the consensus estimates for Lifestyle segment indicates an improvement of 5% to $352 million.
Notably, headwinds related to trade promotional spending, unfavorable mix, manufacturing and logistics expenses, and advertising and sales promotion spending cannot be ignored. These might show on margins, and in turn the bottom line. The consensus estimate for earnings is pegged at $1.31, which indicates a decline of 6.4% from the year-ago quarter.
Nevertheless, to mitigate the impact of aforementioned headwinds, the company has been concentrating on pricing and cost containment efforts. It is progressing well with its IGNITE Strategy that focuses on maximizing opportunities in core international business and concentrates on increasing demand for more sustainable products such as new Clorox compostable cleaning wipes.
The Clorox Company Price, Consensus and EPS Surprise
Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.