Happi Staff02.05.20
The Clorox Company reported that net sales for the three months ended Dec. 31, 2019 were $1,449 million, down 2% from the prior year’s period. Net sales for the six months ended Dec. 31 2019 were $2,955 million, down 3%.
"I feel good about the progress we're making, which is reflected in our second-quarter results, particularly the fifth consecutive quarter of gross margin expansion and sequential improvement in organic sales," commented chair and CEO Benno Dorer. "We have confidence we're taking the right steps as we expect to return to growth in the back half of the fiscal year behind strong investments in our robust innovation plans to support distribution. Importantly, we remain committed to strong execution behind our IGNITE strategy to deliver long-term shareholder value."
Fiscal Second-Quarter Results
Sales were down 2% for the second quarter of fiscal year 2020 compared with the second fiscal quarter of 2019, driven primarily by 2 points of unfavorable foreign currency exchange rates. Organic sales were flat for the quarter.
The company's second-quarter gross margin increased by 40 basis points to 44.1% from 43.7% in the year-ago quarter, driven primarily by the benefits of cost savings initiatives and price increases, which were partially offset by higher trade promotion spending and manufacturing and logistics costs.
Year-to-date net cash provided by operations was $498 million, compared to $449 million in the year-ago period — an increase of 11%.
Key Segment Results
Following is a summary of key second-quarter results by reportable segment. All comparisons are with the second quarter of fiscal year 2019, unless otherwise stated:
Clorox Updates Fiscal Year 2020 Outlook
Clorox confirms its fiscal year sales outlook of a low single-digit decrease to a 1% increase. The company's fiscal year sales outlook now reflects a slightly more favorable foreign exchange impact, offset by increased promotional spending to address competitive activity in select categories.
"I'm pleased that we remain on track to deliver record annual cost savings as well as strong cash flow for the year, which will help provide the fuel necessary to keep investing in our brands and categories," said CFO Kevin Jacobsen. "Looking ahead, I believe we're continuing to take the right actions to generate growth that is more in line with our financial goals.”
"I feel good about the progress we're making, which is reflected in our second-quarter results, particularly the fifth consecutive quarter of gross margin expansion and sequential improvement in organic sales," commented chair and CEO Benno Dorer. "We have confidence we're taking the right steps as we expect to return to growth in the back half of the fiscal year behind strong investments in our robust innovation plans to support distribution. Importantly, we remain committed to strong execution behind our IGNITE strategy to deliver long-term shareholder value."
Fiscal Second-Quarter Results
Sales were down 2% for the second quarter of fiscal year 2020 compared with the second fiscal quarter of 2019, driven primarily by 2 points of unfavorable foreign currency exchange rates. Organic sales were flat for the quarter.
The company's second-quarter gross margin increased by 40 basis points to 44.1% from 43.7% in the year-ago quarter, driven primarily by the benefits of cost savings initiatives and price increases, which were partially offset by higher trade promotion spending and manufacturing and logistics costs.
Year-to-date net cash provided by operations was $498 million, compared to $449 million in the year-ago period — an increase of 11%.
Key Segment Results
Following is a summary of key second-quarter results by reportable segment. All comparisons are with the second quarter of fiscal year 2019, unless otherwise stated:
- Cleaning Segment sales, which includes laundry, home care and professional products, were $501 million for the second quarter of fiscal 2020. Sales were flat behind growth in Professional Products and Home Care, offset by decreases in Laundry as well as unfavorable mix from strong growth in nontracked channels.
- Lifestyle Segment sales were $347 million, up 4% from the prior year, led by Natural Personal Care, which was fueled by innovation in Burt's Bees Lip Care and Face Care categories. The Food and Water Filtration businesses also contributed to segment sales growth, driven by higher merchandising support for Hidden Valley products and by Brita innovation. Pretax earnings grew primarily behind higher sales.
- International Segment (outside the US) sales were down 2% to $241 million due to 8 points of negative foreign currency impact, primarily from Argentina, partially offset by the benefit of favorable price mix.
- The remaining $360 million came from the Household Segment (Bags and wraps, grilling, cat litter and digestive health).
Clorox Updates Fiscal Year 2020 Outlook
Clorox confirms its fiscal year sales outlook of a low single-digit decrease to a 1% increase. The company's fiscal year sales outlook now reflects a slightly more favorable foreign exchange impact, offset by increased promotional spending to address competitive activity in select categories.
"I'm pleased that we remain on track to deliver record annual cost savings as well as strong cash flow for the year, which will help provide the fuel necessary to keep investing in our brands and categories," said CFO Kevin Jacobsen. "Looking ahead, I believe we're continuing to take the right actions to generate growth that is more in line with our financial goals.”