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Clorox Co

The Clorox Company reported its Q42020 earnings on August 3rd, 2020. Revenues for the quarter were $1.98 billion, a growth of 22% on a Y-o-Y basis. Net profit for the quarter was $310 million ($2.41 per share), a growth of 29% on a Y-o-Y basis. Analysts had estimated revenues to be around $1.87 billion and earnings per share to be around $1.99.

Sales for the household segment were up 17%, the cleaning segment saw double-digit growth, the lifestyle segment grew 16%, while the international segment grew 12% as well. Gross margin increased 170 basis points from 45.1% to 46.8% on a Y-o-Y basis. The company management expects the impact of the pandemic to persist throughout the fiscal year 2021. This would result in increased demand for cleaning and disinfectant products. The management also believes that the ongoing recession will reduce disposable income and, therefore, increase the importance of providing better value to the consumer.

According to Kevin Jacobsen, CFO, Clorox, “In the fourth quarter, COVID-19 continued to have a significant impact on our results. In addition to double-digit sales growth in all four of our reportable segments, we delivered our seventh consecutive quarter of gross margin expansion and another quarter of strong cash flow, all of which contributed to strong fiscal year ’20 performance.”

Clorox manufactures and markets consumer and professional products. Clorox products are sold through brands in the cleaning, household, and lifestyle segments. Clorox bleach is a particularly well-known product. The company is ranked 474 on the Fortune 500 list for 2020.

Clorox stock closed at $231.96 on 3rd August 2020, up 4.76% for the past month. The stock has returned 52% since the beginning of 2020 as compared to the S&P500’s 1.13% return year-to-date. It has significantly outperformed the broader market by some margin.

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