On Tuesday, Clorox Co signalled the probability of lower sales for its products. The demand for bleaches, wipes and other surface cleaners are expected to slow down as accelerated vaccinations are helping ease COVID-19 curbs. Following the news, shares for Clorox Co also declined.
Clorox Co forecast fiscal 2022 sales to fall between 2% and 6%, while analysts expected a decline of 1%, according to Refinitiv IBES data.
Like Procter & Gamble Co and Britain’s Reckitt Benckiser Group Plc , Clorox had benefited from consumers stockpiling cleaning products at the height of the pandemic last year.
But with the opening up of the economy, sales in its mainstay health and wellness unit slumped 17% in the fourth quarter. The household business, which makes Glad trash bags and Kingston charcoal, reported an 8% drop in sales.
“This was a poor quarter,” said Edward Jones analyst John Boylan. He added that while the brokerage expected the first half to be difficult due to tough year-ago comparables, normalization of sales and profit would take longer than its initial estimations.
Clorox’s results also took a hit from rising costs of raw materials, such as pulp, resin and petrochemical products, that have prompted companies across sectors to increase prices.
Despite a price hike earlier in 2021, its gross margins declined by 970 basis points to 37.1%. That, in part, pulled down its adjusted earnings to 95 cents per share, which missed expectations of $1.35 per share.
Total net sales fell to $1.80 billion from $1.98 billion, falling short of estimates of $1.92 billion.
Read also: Risk Management of Trading in The Face of A Pandemic
Follow and join us on Youtube, Instagram, Facebook, and Twitter to be part of the trader community in Asia
