Clorox (CLX) Tops Q3 EPS by 32c, Updates Guidance

Clorox (NYSE: CLX) reported Q3 EPS of $1.31, $0.32 better than the analyst estimate of $0.99. Revenue for the quarter came in at $1.8 billion versus the consensus estimate of $1.81 billion.

GUIDANCE:

Clorox sees FY2022 EPS of $4.05-$4.30, versus the consensus of $4.18.

• 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.
• Gross margin is now expected to decrease up to 800 basis points, primarily due to higher than previously anticipated commodity and manufacturing and logistics costs.
• 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.
• Diluted EPS is now expected to be between $3.60 and $3.85, or a decrease between 35% and 31%, respectively.
• Adjusted EPS is now expected to be between $4.05 and $4.30, or a decrease between 44% and 41%, respectively. 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.
• Of the company's approximately $90 million investment in long-term strategic digital capabilities and productivity enhancements in fiscal year 2022, about $73 million, or 45 cents, is still expected to flow through to the profit and loss statement, mostly in selling and administrative expenses.

For earnings history and earnings-related data on Clorox (CLX) click here.

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