American manufacturer and marketer of consumer and professional products, The Clorox Company (CLX), reported better-than-expected first-quarter results.
Despite the ongoing pricing pressures and falling consumer demand, Clorox surged past earnings and revenue expectations, aided by disciplinary pricing and cost reduction initiatives. CLX shares rose 5.1% during the extended trading session on November 1.
The company reported adjusted earnings of $1.21 per share, down 54% year-over-year but 18 cents higher than analyst estimates of $1.03 per share. (See Insiders’ Hot Stocks on TipRanks)
Similarly, net sales decreased by 6% at $1.81 billion year-over-year, but surpassed Street estimates of $1.7 billion. Net sales slumped due to a combination of unfavorable volume, pricing, and foreign exchange mix across all the company’s offerings.
Pleased with a solid start to the fiscal year 2022, Linda Rendle, CEO of Clorox said, “We made meaningful progress on restoring supply — which contributed to holding or gaining market share in the vast majority of our businesses — and we’re pulling multiple levers to manage through this inflationary period. This includes pricing actions and stepping up our cost reduction initiatives, which will help us rebuild margins and create fuel to reinvest in the business.”
The company has confirmed its full-year Fiscal 2022 guidance based on the current economic and inflationary environment. Net sales are expected to decline by 2%-6%, driven by the continuation of consumer demand moderation. FY22 adjusted earnings are expected to fall in the range of $5.40-$5.70 per share, while the consensus estimate is pegged at $5.46 per share.
Overall, the stock has a Moderate Sell rating, based on 1 Buy, 6 Holds, and 4 Sells. The average Clorox price target of $158 implies 3.3% downside potential to current levels. Shares have lost 24.4% over the past year.