Clorox forecasts strong annual profit on higher prices, steady demand
Reuters
Published Aug 02, 2023 04:17PM ET
Updated Aug 02, 2023 04:27PM ET
By Ananya Mariam Rajesh and Kailyn Rhone
(Reuters) - Clorox (NYSE:CLX) on Wednesday forecast annual profit above Wall Street estimates after fourth-quarter results beat expectations, boosted by price hikes and steady demand for its household products.
The company's better-than-expected results mirror peers Procter & Gamble (NYSE:PG) and Kimberly-Clark (NYSE:KMB), indicating that consumer goods makers across the globe have been able to pass on rising costs to consumers in the form of higher product prices without much pushback.
Consumer prices in the U.S. rose modestly in June, registering the smallest annual increase in more than two years as inflation subsided, signaling a boost to purchasing power for consumers.
"We are not seeing any meaningful trade down to private labels, (and we do see) value-seeking behavior with our consumers but we are seeing that move within our brands," said Chief Financial Officer Kevin Jacobsen in an interview with Reuters.
"In some cases, we see them (consumers) buying multiple boxes and trying to get the best price per unit in other cases or buying smaller sizes."
Clorox's Health and Wellness segment saw prices increase by 16 points and volume fall 2 points, while its Household segment saw a 17-point price rise and a 3-point drop in volumes in the fourth quarter, compared with steeper declines in the third quarter.
The company expects 2024 adjusted profit between $5.60 and $5.90 per share, compared with analysts' estimates of $5.63, according Refinitiv IBES data.
The Pine-Sol manufacturer's annual net sales are expected to be flat to up 2%, compared with estimates for a 2.9% rise.
"In our outlook, we have assumed a mild recession in the U.S. and the back half of our fiscal year, which equates to the front half of calendar year 2024," Jacobsen said.
The household staples maker's fourth-quarter revenue rose 12% to $2.02 billion, beating expectations of $1.88 billion. Adjusted profit of $1.67 per share surpassed estimates of $1.18.
Its gross margin increased 560 basis points to 42.7% from 37.1% a year earlier.
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Written By: Reuters
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