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Dec 31, 2019
Clorox Q2 2020 Earnings Report
Clorox reported a sales decrease and an increase in diluted net earnings per share for its second quarter of fiscal year 2020.
Key Takeaways
Clorox's Q2 2020 results showed a sales decrease of 2% but a diluted EPS increase of 4%. The company is confident in returning to growth in the back half of the fiscal year with investments in innovation.
Sales were down 2%, driven by unfavorable foreign currency exchange rates.
Organic sales were flat for the quarter.
Gross margin increased by 40 basis points to 44.1%.
Diluted EPS increased by 4% to $1.46.
Forward Guidance
Clorox confirms its fiscal year sales outlook of a low single-digit decrease to a 1% increase. Fiscal year organic sales is now expected to be about flat to 2% growth. Clorox now anticipates fiscal year 2020 diluted EPS to be between $6.10 and $6.25.
Positive Outlook
- Slightly more favorable foreign exchange impact.
- Gross margin is now expected to be up slightly, mainly reflecting lower input costs.
- Company remains on track to deliver record annual cost savings.
- Company remains on track to deliver strong cash flow for the year.
- Advertising and sales promotion spending is now projected to be slightly more than 10% of sales.
Challenges Ahead
- Increased promotional spending to address competitive activity in select categories.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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