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Clorox Gains as Q1 Sales, Profit Decline Are Less Than Expected By Investing.com

Clorox Gains as Q1 Sales, Profit Decline Are Less Than Expected © Reuters

By Dhirendra Tripathi

Investing.com – Clorox stock (NYSE:CLX) gained nearly 3% Tuesday as the maker of bleaches, wipes and other cleaning products posted first-quarter sales and profit that were higher than estimates even as both were lower year-on-year

Gross margins in the first quarter eroded a massive 1190 basis points to 37% owing to higher commodity, manufacturing and logistics costs. One basis point is one-hundredth of a percent.

The company exuded confidence about rebuilding its margins, notwithstanding a challenging operating environment and incremental cost headwinds.

It reiterated its annual guidance of a 2% to 6% decline in sales and an erosion of 300-400 basis points in gross margins. Net sales in the last financial year were $7.34 billion.

September-quarter net sales fell 6%, to $1.80 billion as pandemic-driven shopping for cleaning products cooled off. Volumes were weaker and so were sales of higher-margin products.

Net profit at $142 million was about a third of 2020 quarter’s $417 million.