Clorox Cleans Up in Q1

The Clorox Company reported sales growth of 27% and an increase in diluted net earnings per share (diluted EPS) of 103% for its first quarter of fiscal year 2021, which ended Sept. 30, 2020. 

“We delivered another quarter of outstanding results to have a strong start to the fiscal year, with broad-based strength across our portfolio, driving double-digit sales growth in all reportable segments,” said CEO Linda Rendle. “At a time of global uncertainty, these results speak to the strength of our brands and passion of our people as they stepped up to meet the needs of consumers around the world. Moving forward, we'll drive our momentum by leaning into our IGNITE strategy. We'll invest strongly in superior brand experiences and strategic growth initiatives in support of our ambition of accelerating long-term profitable growth for the company.”  

According to Rendle, the company’s “priority remains maximizing the supply of our products — leveraging all available resources to help ensure people can access what they need — and continuing to play 100% offense on all our businesses, with a focus on delivering value and innovation that allows us to convert new users to loyal consumers.”

In the first quarter, sales increased 27%, driven by double-digit growth in eight of 10 business units due to COVID-19 and people spending more time at home. 

Additionally, sales results include 1 point of growth from the company's acquisition of a majority interest in its joint venture in the Kingdom of Saudi Arabia, offset by 1 point of unfavorable foreign currency exchange rates. On an organic basis, sales grew 27%.
 
Clorox’s health and wellness segment—cleaning, professional products; vitamins, minerals and supplements—reprted a 28% sales increase in Q1. Segment sales were up behind double-digit growth in all three business units, said the company. The gains were largely driven by continued strong shipments in the cleaning and professional products portfolios due to higher demand for disinfecting and cleaning products used both in and out of the home. Higher pretax earnings were driven by sales growth and gross margin expansion, which were partially offset by higher investments in advertising and in people to support increased demand.

Clorox’s lifestyle segment, which includes its natural personal care products, reported a 17% sales increase. Segment sales grew behind double-digit increases in the food and water filtration businesses, driven by higher consumer demand. 
International Q1 sales rose 18% (17% organically). 

Clorox has updated its fiscal 2021 outlook; it notes that fiscal year sales are now expected to grow between 5% and 9%, reflecting strong first-quarter sales results as well as the expectation of stronger sales results over the balance of the fiscal year, including double-digit sales growth in the second quarter. With the company lapping double-digit growth from the period when the initial COVID-19 spike occurred, a deceleration is still anticipated in the back half of fiscal year 2021, said the company. Back-half sales results are still expected to be significantly stronger relative to pre-pandemic levels.