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Mar 31, 2022
Clorox Q3 2022 Earnings Report
Clorox reported a net sales increase of 2% and adjusted EPS decreased by 19% due to lower gross margin.
Key Takeaways
Clorox reported Q3 fiscal year 2022 results with a net sales increase of 2% to $1.8 billion. Diluted EPS increased significantly due to a noncash impairment in the Vitamins, Minerals and Supplements business during the year-ago period, while adjusted EPS decreased due to lower gross margin. The company updated its outlook to reflect higher than previously anticipated commodity and manufacturing and logistics costs.
Net sales increased 2% to $1.8 billion, with organic sales also growing 2%.
Diluted EPS increased 347% to $1.21, while adjusted EPS decreased 19% to $1.31.
Gross margin decreased to 35.9% due to higher manufacturing, logistics, and commodity costs.
The company updated its fiscal year 2022 outlook, expecting net sales to decrease 1% to 4% and adjusted EPS to be between $4.05 and $4.30.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Clorox updated its outlook for fiscal year 2022, expecting net sales to decrease 1% to 4% and adjusted EPS to be between $4.05 and $4.30, reflecting higher commodity and manufacturing and logistics costs.
Positive Outlook
- Net sales are still expected to decrease 1% to 4% (organic sales decrease of 1% to 4%), reflecting a 7% sales decrease in the first half of fiscal year 2022 as the company lapped 27% growth in that period and sales growth in the back half of this fiscal year.
- Selling and administrative expenses are now expected to be at 14% to 15% of net sales, reflecting about 1 point of impact from the company’s strategic investments in digital capabilities and productivity enhancements.
- Advertising and sales promotion spending remains at about 10% of net sales, reflecting the company’s ongoing commitment to invest behind its brands.
- Effective tax rate continues to be between 22% and 23%, with the year-over-year increase primarily reflecting the lapping of several one-time benefits in the prior fiscal year.
- The company’s adjusted EPS outlook excludes the long-term strategic investment in digital capabilities and productivity enhancements to provide greater visibility into the underlying operating performance of the business.
Challenges Ahead
Revenue & Expenses
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Historical Earnings Impact
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