On August 1, 2024, Clorox Co (CLX, Financial) released its 8-K filing reporting results for the fourth quarter and fiscal year 2024, which ended June 30, 2024. The company also announced a definitive agreement to divest its Better Health Vitamins, Minerals, and Supplements (VMS) business to Piping Rock Health Products, LLC.
Company Overview
Since its inception more than 100 years ago, Clorox has grown to play in a variety of categories across the consumer products space, including cleaning supplies, laundry care, trash bags, cat litter, charcoal, food dressings, water-filtration products, and natural personal-care products. Beyond its namesake brand, the firm's portfolio includes Liquid-Plumr, Pine-Sol, S.O.S, Tilex, Kingsford, Fresh Step, Glad, Hidden Valley, KC Masterpiece, Brita, and Burt's Bees. Just less than 85% of Clorox's sales stem from its home turf.
Q4 Fiscal Year 2024 Summary
Clorox Co (CLX, Financial) reported a 6% decrease in net sales to $1.9 billion for Q4 FY24 compared to the same quarter last year. This decline was driven by the impacts of the Argentina divestiture, unfavorable price mix, and lower volume. Organic sales decreased by 3%. Despite the revenue decline, the company saw a 22% increase in diluted net earnings per share (EPS) to $1.73, surpassing the analyst estimate of $1.41. Adjusted EPS increased by 9% to $1.82, driven by higher gross margin and lower selling and administrative expenses.
Performance and Challenges
Clorox Co (CLX, Financial) faced significant challenges, including the impacts of a cyberattack and the divestiture of its Argentina business. The cyberattack caused substantial disruption and consumption loss, but the company managed to restore supply and distribution, recovering nearly all of its market share. The divestiture of the Argentina business also impacted net sales negatively.
Financial Achievements
Despite these challenges, Clorox Co (CLX, Financial) achieved notable financial milestones. The gross margin increased by 380 basis points to 46.5%, primarily due to lower manufacturing and logistics costs, cost savings initiatives, and favorable commodity costs. The company also completed the implementation of its streamlined operating model, which is expected to deliver ongoing cost savings of approximately $100 million annually.
Segment Performance
| Segment | Net Sales Growth | Adjusted EBIT Growth |
|---|---|---|
| Health and Wellness | Flat | 15% |
| Household | -10% | -31% |
| Lifestyle | -2% | -9% |
| International | -11% | 20% |
Fiscal Year 2024 Summary
For the full fiscal year 2024, Clorox Co (CLX, Financial) reported a 4% decrease in net sales, with flat organic sales. The gross margin increased by 360 basis points to 43.0%. Diluted EPS saw a significant increase of 88% to $6.17, while adjusted EPS increased by 21% to $6.17. Net cash provided by operations was $695 million, representing a 40% decrease from the previous fiscal year.
Strategic and Operational Highlights
Clorox Co (CLX, Financial) continued to invest in its brands and innovations, such as the Clorox Toilet Bomb Foaming Toilet Bowl Cleaner and Pine-Sol concentrated multi-surface cleaner. The company also achieved its seventh consecutive quarter of gross margin expansion and was named a Best Company to Work For by U.S. News & World Report.
Outlook for Fiscal Year 2025
Looking ahead, Clorox Co (CLX, Financial) expects net sales to be flat to down 2% for fiscal year 2025. The company anticipates a gross margin increase of about 100 basis points and adjusted EPS to be between $6.55 and $6.80, reflecting an increase of 6% to 10%.
We closed out the fiscal year with strong margin expansion and double-digit adjusted EPS growth despite substantial disruption and consumption loss from the cyberattack. While fully restoring supply and distribution, as well as recovering nearly all of our market share, we remained relentless in driving our IGNITE strategy forward," said Chair and CEO Linda Rendle.
For more detailed financial information, visit the company’s Quarterly Results.
Explore the complete 8-K earnings release (here) from Clorox Co for further details.
