Clorox Stock Isn’t Moving Much After Earnings. All the Excitement Came Last Month.
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Sales of Clorox cleaning products took off as the pandemic struck last year.
Chris Delmas/AFP via Getty ImagesClorox stock is drifting lower even though the maker of household products earned more than expected and increased its financial forecasts. That could be because of a spike in the shares last month.
For the second quarter of its fiscal year, Clorox (ticker: CLX) said it earned $259 million, or $2.03 a share, up from $1.46 in the year-ago period, on revenue that climbed 27% to $1.84 billion. Analysts were looking for EPS of $1.78 and revenue of $1.75 billion.
Clorox’s organic sales climbed 26%, while gross margin expanded for the ninth straight quarter to 45.4% from 44.1%.
As for the company’s individual segments, its health and wellness division, which includes cleaning products and vitamins and minerals, logged a 42% rise in sales. Household products like bags and wraps saw a 20% climb in sales, while sales at its lifestyle segment, which includes water filtration and personal care, were up 9%. International sales jumped 23%.
For the full 2021 fiscal year, Clorox now expects to earn between $8.05 and $8.25 a share, up from a prior range of $7.70 to $7.95. It sees sales growth of 10% to 13%, compared with its previous forecast of 5% to 9% growth.
Clorox was down 0.8% to $203 in early trading.
Although the results were good overall. they weren’t perfect. The company noted increased manufacturing and logistics costs in signaling a slight decline in full-year gross margins. And the company’s new outlook reflects roughly flat sales for its fiscal third and fourth quarter.
Yet the huge cleaning surge ushered in by Covid-19 was always going to fade at some point. Flat sales would still be impressive, given that the year-earlier figures include some sales from the height of the pandemic lockdowns.
Still the stock isn’t doing much, perhaps because it was caught up in the short squeeze that dominated the market in late January. The shares began the year right around $200 before popping up to $231 last week, and then settling back to earth. With just over 10% of its available shares sold short, that could have been enough to put it in the GameStop (GME) trade.
Write to Teresa Rivas at teresa.rivas@barrons.com