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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.
Revenue by Segment
Revenue by Geographic Location
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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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