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Dec 31, 2021
Clorox Q2 2022 Earnings Report
Clorox's financial performance declined due to decreased net sales and gross margin, impacted by higher manufacturing & logistics and commodity costs.
Key Takeaways
Clorox reported a decline in net sales by 8% to $1.7 billion, driven by a 10-point decline in volume, though favorable price mix contributed 2 points. Gross margin decreased significantly by 1240 basis points to 33%. Diluted EPS decreased by 72% to $0.56, and adjusted EPS declined by 67% to $0.66.
Net sales decreased by 8% to $1.7 billion, reflecting a 10-point decline in volume and 2 points of favorable price mix.
Gross margin decreased to 33% from 45% due to higher manufacturing & logistics and commodity costs.
Diluted EPS decreased by 72% to $0.56, primarily driven by lower gross margin and lower net sales.
Adjusted EPS decreased by 67% to $0.66, excluding investments in long-term strategic digital capabilities and productivity enhancements.
Clorox
Clorox
Clorox Revenue by Segment
Clorox Revenue by Geographic Location
Revenue by Segment
Household Revenue
CapyFin.comLifestyle Revenue
CapyFin.comInternational Revenue
CapyFin.comRevenue by Geographic Location
International Revenue
CapyFin.com Forward Guidance
The company updated its fiscal year 2022 outlook, projecting a net sales decline of 1% to 4% and diluted EPS between $3.80 and $4.05.
Positive Outlook
- Company expects sales to return to its long-term sales growth target of 3% to 5% by the fourth quarter.
- Advertising and sales promotion spending at about 10% of net sales, reflecting the company’s ongoing commitment to invest behind its brands.
- Selling & administrative expenses at about 15% of net sales, reflecting about 1 point of impact from the company’s strategic investments in digital capabilities and productivity enhancements.
- Company is driving cost savings and pricing to mitigate inflationary headwinds.
- Company is investing in innovation, its brands and strategic digital capabilities.
Challenges Ahead
- Net sales decline of 1% to 4% (organic sales decline of 1% to 4%).
- Gross margin decline of about 750 basis points, primarily due to higher than previously anticipated commodity and manufacturing & logistics costs.
- Diluted EPS between $3.80 and $4.05, or a decrease between 32% and 27%, respectively.
- Adjusted EPS between $4.25 and $4.50, or a decrease between 41% and 38% respectively.
- Cost pressures will continue through fiscal year 2022
Revenue & Expenses
Visualization of income flow from segment revenue to net income