Net Sales Decrease 5% for The Clorox Company in Q3 2024

Net sales for the Clorox Company in Q3 2024 decreased 5% to $1.81 billion compared to a 6% net sales increase in the year-ago quarter. 

 

Officials said the decrease was driven largely by lower volume from temporary distribution losses resulting from the widescale disruptions caused by a cyberattack, as well as unfavorable foreign exchange rates, partially offset by favorable price mix. 

 

Organic sales were up 2%. Gross margin increased 40 basis points to 42.2% from 41.8% in the year-ago quarter, primarily driven by the benefit of pricing and cost savings, partially offset by higher manufacturing and logistics costs, unfavorable foreign exchange rates and higher trade promotion spending.

 

According to CEO Linda Rendle, the company made significant progress on its long-term strategies to drive profitable growth while continuing to recover from a cyberattack in Argentina. 

 

“We executed well against our IGNITE strategy by evolving our portfolio with the divestiture of the Argentina business, launching innovation, investing in our brands, and delivering another quarter of gross margin expansion,” she said. “While we experienced short-term cyberattack-related supply constraints in a few areas, which impacted sales, we expect to fully restore lost distribution by the end of the fourth quarter. We are on track to exit fiscal year 2024 with strong fundamentals and the right investments and plans in place to deliver against our strategic and financial objectives to enhance long-term shareholder value.”

 

The company introduced a new lineup of Pine-Sol concentrated multi-surface cleaners, and new Scentiva Disinfecting Mist and Toilet Bowl Cleaning Gel.

 

However, the in health and wellness sector, inclusive of cleaning and professional products, net sales decreased 6%, driven by 4 points of lower volume and 2 points of unfavorable price mix.

 

Cleaning sales also decreased, driven primarily by temporary distribution losses caused by the cyberattack.

 

In the lifestyle category, net sales decreased 11%, driven by 9 points of lower volume and 2 points of unfavorable price mix.

 

Natural personal care sales decreased, driven primarily by increased competitive activity and distribution losses mainly in the non-core portion of the portfolio, as well as supply chain constraints.

The company said it continues to expect net sales to be down low single digits. However, it is now expected to be at the low end of the range, reflecting the impact of the divestiture of the business in Argentina as well as third quarter results. 

 

The sales outlook now assumes three points of unfavorable foreign exchange rates, versus the previous assumption of five points, driven primarily by the divestiture of the Argentina business. Organic sales are still expected to be up low single digits, but also at the low end of the range.

 

Cleaning Is Caring & The Market Is Booming