March 7, 2021

Clorox Net Income Dips on Increasing Costs

OAKLAND, Calif. (AP) — Clorox Co.’s fourth-quarter net income dipped 1 percent as rising commodity costs took a toll and the consumer product maker said it plans to raise prices again soon to compensate.

The company that makes Glad trash bags and household cleaners kept its earnings outlook for the fiscal year in line with what it previously forecast, however, as it reported its earnings Wednesday. And it reduced its commodity cost estimate for fiscal 2012.

Many of Clorox’s peers also are facing higher prices for the materials they need to make and transport their products, and many have raised their prices. The Oakland, Calif., company and its competitors also must persuade customers to keep buying as they get squeezed by higher gas and grocery prices.

Clorox now expects its commodity costs to rise between $140 million and $150 million from fiscal 2011. It earlier forecast an increase of $160 million to $170 million.

The company is dealing with takeover bids from billionaire investor Carl Icahn, who has offered twice since mid-July to buy the company. His first offer was for $76.50 a share. After Clorox rejected that, he offered $80 per share but continued to urge the company to find a better offer from a competitor. Clorox’s board said his offers weren’t credible or big enough.

Clorox said it earned $169 million, or $1.26 per share, in the quarter that ended June 30. That’s down from $171 million, or $1.20 per share, a year earlier.

But it’s better than the adjusted earnings of $1.19 per share that analysts expected on average, according to FactSet.

The company said it bought back $655 million worth of its shares in fiscal 2011. That boosted its earnings per share.

Clorox said spending more on advertising to support new products and build brand awareness pinched its performance a bit during the fourth quarter.

Its gross margin slipped to 43.5 percent from 44.3 percent.

Revenue for the quarter rose 4 percent to $1.48 billion, topping Wall Street’s forecast for $1.47 billion.

Clorox reported its biggest revenue gain overseas. The 9 percent increase was due to favorable foreign currency exchange rates and higher prices.

Revenue for its lifestyle division — which includes dressings and sauces, water filtration and global natural personal care — climbed 5 percent with new flavors and increased shipments of the new Brita on-the-go bottle.

Revenue for the company’s cleaning unit rose 4 percent, while the household segment edged up 1 percent.

For the year, Clorox earned $557 million, or $4.02 per share. That compares with earnings of $603 million or $4.24 per share, in the previous year.

Adjusted earnings were $3.93 per share, which takes out a goodwill impairment charge related to its Burt’s Bees business.

Annual revenue was basically flat at $5.23 billion.

Looking to fiscal 2012, Clorox anticipates earnings in a range of $4 to $4.10 per share, with revenue up 1 percent to 3 percent. Based on fiscal 2011’s revenue of $5.23 billion, this would imply revenue of $5.28 billion to $5.39 billion.

Analysts expect full-year earnings of $4.07 per share on revenue of $5.35 billion.

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