Clorox Earnings vs. Expectations
In the Q3 earnings report for the consumer product business, Clorox generated $1.781 billion in total sales. This figure represents a net sales drop of $2 million compared to the same quarter last year as business saw no strong increases or decreases in a relatively flat Q3 report.
The company also could not maintain earnings, with the flat sales numbers proving to be a major detriment. In fact, the consumer product company reported a diluted net loss of $0.49 per share. This is a 126% decrease in comparison to the same quarter just one year ago. However, Clorox did report adjusted earnings of $1.62 per share. This figure actually beat out analyst expectations for the company, which had only projected Clorox to report earnings of $1.47 per share.
While many portions of business for Clorox actually saw solid growth, the sharp decline in disinfecting products, and other parts of the health sector, took on an 8% sales decrease. In addition to the 8% drop in sales, the health and wellness portion of Clorox experienced a 187% drop in pretax earnings; showing how hard the sector has cratered without the COVID-19 pandemic causing panic buying. Household items and international business both saw strong numbers with increases in sales in comparison to the same quarter last year coming in at 6% and 9%, respectively.
Future Outlook and Stock Market Reaction
While the consumer goods company still expects to see an increase in sales between 10% and 13%, both diluted and adjusted annual earnings per share figures project decreases in comparison to the 2020 fiscal year. Diluted earnings per share in particular looks to see a drop of anywhere between 16% and 19%, as the drop in overall demand will weigh heavy on the company in 2021.
Clorox has seen the flat sales numbers and lowered annual guidance reflect in the stock market as well. The company was down over 3.5% in early premarket trading as many investors expect similar sales trends in the health and wellness business sector to continue trending downward as the pandemic wanes. Company stock has lost over $7 in value per share, now trading at just $178.
In a statement released alongside the Q3 earnings report, Clorox CEO Linda Rendle said, “As expected, we delivered flat sales in the third quarter compared to 15% growth in the year-ago quarter. What's important is that we're on track to deliver our best full-year top-line growth in more than 20 years. Looking ahead, our portfolio continues to play a meaningful role in addressing consumer megatrends that have accelerated in the last 12 months, positioning us well to fulfill our ambition to accelerate long-term, profitable growth.”
About the Author
Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.