On November 1, 2023, Clorox Co (CLX, Financial) released its Q1 2024 earnings report, revealing a challenging quarter marked by the impact of a previously announced cyberattack. The company reported a 20% decrease in net sales to $1.4 billion, largely driven by lower volume resulting from the cyberattack. Despite these challenges, the company demonstrated resilience with a 240 basis point increase in gross margin to 38.4%, due to the benefits of pricing and cost-savings initiatives.
Financial Highlights
Clorox Co (CLX, Financial) reported diluted net earnings per share (EPS) of 17 cents, a 75% decrease from 68 cents in the year-ago quarter. This decrease includes current-period investments in the company's long-term strategic digital capabilities and productivity enhancements (17 cents) and incremental expenses resulting from the cyberattack (15 cents). Adjusted EPS decreased 47% to 49 cents from 93 cents in the year-ago quarter, due to lower volume partially offset by the benefits of pricing and ongoing cost-savings initiatives.
Year-to-date net cash provided by operations was $20 million, representing an 89% decrease from $178 million in the year-ago period. CEO Linda Rendle acknowledged the impact of the cyberattack on the company's short-term financial performance, but expressed confidence in the company's ability to deliver consistent, profitable growth over time.
Segment Performance
Clorox Co (CLX, Financial) reported lower sales in all segments and lower segment adjusted earnings before interest and income taxes (EBIT) in three of four segments due to the cyberattack. The Health and Wellness segment saw a 23% decrease in net sales and a 22% decrease in segment adjusted EBIT. The Household segment reported a 23% decrease in net sales and a 118% decrease in segment adjusted EBIT. The Lifestyle segment reported a 28% decrease in net sales and a 68% decrease in segment adjusted EBIT. The International segment reported a 5% decrease in net sales, but a 48% increase in segment adjusted EBIT.
Fiscal Year 2024 Outlook
Clorox Co (CLX, Financial) updated its fiscal year 2024 outlook, now expecting net sales to be down mid- to high single digits, reflecting the impact from the cyberattack. Gross margin is expected to be about flat, reflecting the combined benefit of pricing actions, cost savings, and supply chain optimization offset by input cost inflation and the impact from the cyberattack. The company's effective tax rate is now expected to be between 23% and 24%. Net of these factors, fiscal year diluted EPS is now expected to be between $2.10 and $2.60, or an increase of 75% to 117%, respectively.
Explore the complete 8-K earnings release (here) from Clorox Co for further details.
