- Clorox Co CLX reported a first-quarter FY22 sales decline of 6% year-on-year, to $1.81 billion, beating the analyst consensus of $1.70 billion. Organic sales for the quarter declined 5%.
- The decline in net sales reflects a 2-point decrease in volume, 3 points of unfavorable price mix, and 1 point of unfavorable foreign exchange.
- Revenues from Health and Wellness fell 8% Y/Y, Household fell 12% Y/Y, Lifestyle increased 4%, and International grew 1%.
- Gross profit declined 27.2% Y/Y to $670 million, while gross margin contracted by 1090 basis points Y/Y to 37%, driven primarily by higher commodity, manufacturing, and logistics costs.
- Adjusted EBIT margin contracted 1220 basis points Y/Y to 12.2%.
- Adjusted EPS of $1.21 surpassed the analyst consensus of $1.03.
- Clorox generated $41 million in operating cash flow, down 89% from $383 million a year ago. It held $210 million in cash and equivalents as of September 30, 2021.
- "Although the environment remains volatile and we expect cost pressures to persist, our first-quarter performance, coupled with the actions we're taking, put us on track to meet our fiscal 2022 outlook," said CEO Linda Rendle.
- Outlook: Clorox reaffirms FY22 adjusted EPS of $5.40 - $5.70, versus the consensus of $5.46.
- Outlook for net sales decline of 2% - 6% (organic sales decline of 2% - 6%) is unchanged.
- Gross margin decline of 300 - 400 basis points, assuming a return to gross margin expansion in Q4.
- Price Action: CLX shares are trading higher by 2.21% at $167.01 in premarket on the last check Tuesday.
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