|
Related Topics
|
|
Category: Stock Market and Clorox Company
Date: 3 November 2019 Stock Price: $147.04 We take a look at the 1st quarter earnings report of their 2020 fiscal year of The Clorox company, a multinational manufacturer and marketers of consumer and professional goods.
|
|
About Clorox Company
The Clorox Company (NYSE: CLX) is a leading multinational manufacturer and marketer of consumer and professional products with approximately 8,800 employees worldwide and fiscal year 2019 sales of $6.2 billion. Clorox markets some of the most trusted and recognized consumer brand names, including its namesake bleach and cleaning products; Pine-Sol® cleaners; Liquid-Plumr® clog removers; Poett® home care products; Fresh Step® cat litter; Glad® bags, wraps and containers; Kingsford® charcoal; Hidden Valley® dressings and sauces; Brita® water-filtration products; Burt's Bees® natural personal care products; RenewLife® digestive health products; and Rainbow Light®, Natural Vitality™ and NeoCell® dietary supplements. The company also markets industry-leading products and technologies for professional customers, including those sold under the CloroxPro™ and Clorox Healthcare® brand names. Nearly 80 percent of the company's sales are generated from brands that hold the No. 1 or No. 2 market share positions in their categories.
Clorox is a signatory of the United Nations Global Compact and the Ellen MacArthur Foundation's New Plastics Economy Global Commitment. The company has been broadly recognized for its corporate responsibility efforts, included on CR Magazine's 2019 100 Best Corporate Citizens list, Barron's 2019 100 Most Sustainable Companies, the Human Rights Campaign's 2019 Corporate Equality Index and the 2019 Bloomberg Gender Equality Index, among others. In support of its communities, The Clorox Company and its foundations contributed about $12 million in combined cash grants, product donations and cause marketing in fiscal year 2019.
Clorox is a signatory of the United Nations Global Compact and the Ellen MacArthur Foundation's New Plastics Economy Global Commitment. The company has been broadly recognized for its corporate responsibility efforts, included on CR Magazine's 2019 100 Best Corporate Citizens list, Barron's 2019 100 Most Sustainable Companies, the Human Rights Campaign's 2019 Corporate Equality Index and the 2019 Bloomberg Gender Equality Index, among others. In support of its communities, The Clorox Company and its foundations contributed about $12 million in combined cash grants, product donations and cause marketing in fiscal year 2019.
Burt's Bees one of Clorox's brands
Financial overview of Clorox Company 1st quarter 2020 earnings results
The data below refers to the latest quarter's data (unless specified otherwise)
- Net sales: $1.506 billion (down from $1.563 billion for the same quarter of the previous year)
- Net sales decreased by -3.64% over the last 12 months
- Cost of goods sold: $843 million (down from $885 million for the same quarter of the previous year)
- Cost of goods decreased by -4.74% over the last 12 months
- Net income: $203 million (down from $210 million for the same quarter of the previous year)
- Diluted earnings per share: $1.59 (down from $1.62 for the same quarter of the previous year)
- PE ratio of Clorox Company: 22.8
- Number of shares in issue: 127.465 million (down from 129.946 million for the same period of the previous year)
- Cash and cash equivalents: $150 million
- Cash and cash equivalents per share: $1.17
- Cash and cash equivalents makes up 0.8% of Clorox's market capital
- Cash and cash equivalents makes up 2.7% of Clorox's total assets
- Accounts receivable: $556 million
- Accounts receivable makes up 10.3% of Clorox's total assets
- Goodwill in Clorox: $1.585 billion
- Goodwill per share: $12.43
- Goodwill makes up 29.4% of Clorox's total assets
Clorox (NYSE: CLX) management commentary on 1st quarter 2020 earnings
OAKLAND, Calif., Oct. 31, 2019 /PRNewswire/ -- The Clorox Company (NYSE:CLX) reported a sales decrease of 4% and a 2% decrease in diluted net earnings per share (diluted EPS) for its first quarter of fiscal year 2020, which ended Sept. 30, 2019. "First-quarter results were generally in line with our expectations. While sales were down, we're pleased that we were able to grow volume and gross margin in three of four segments as we work through challenges in our Bags and Wraps and Charcoal businesses. Importantly, we remain on track to deliver our fiscal year outlook," said Clorox Chair and CEO Benno Dorer. "I'm confident our new IGNITE Strategy will provide the momentum necessary to deliver long-term shareholder value, especially through its focus on expanding our robust innovation and cost savings initiatives."
"I'm pleased we delivered our fourth consecutive quarter of year-over-year gross margin expansion as well as strong cash flow, which allow us to continue to invest in our categories and brands," said Chief Financial Officer Kevin Jacobsen. "Importantly, I believe we're taking the right actions to return to delivering Good Growth – growth that's profitable, sustainable and responsible – in our ongoing pursuit of long-term value creation for our shareholders."
"I'm pleased we delivered our fourth consecutive quarter of year-over-year gross margin expansion as well as strong cash flow, which allow us to continue to invest in our categories and brands," said Chief Financial Officer Kevin Jacobsen. "Importantly, I believe we're taking the right actions to return to delivering Good Growth – growth that's profitable, sustainable and responsible – in our ongoing pursuit of long-term value creation for our shareholders."
Clorox Confirms Fiscal Year 2020 Sales and EPS Outlook
Clorox continues to anticipate that sales will be down from the low single digits to up 1%, reflecting about 2 points of foreign currency headwinds. Importantly, the company's organic sales outlook remains unchanged, with a range of 1% to 3% sales growth, driven primarily by a robust innovation program and the expectation of a return to growth in Bags and Wraps and Charcoal in the back half of the fiscal year.
Gross margin is still expected to be down slightly, consistent with the company's recently updated assumptions about foreign currency exchange rates.
Advertising and sales promotion spending is still projected to be about 10% of sales.
Clorox continues to anticipate selling and administrative expenses to be about 14% of sales.
The company's effective tax rate is still expected to be in the range of 22%-23%.
Net of all these factors, Clorox continues to anticipate fiscal year 2020 diluted EPS to be in the range of $6.05 to $6.25.
- Low single-digit decrease to 1% increase in sales (1% to 3% organic sales growth)
- $6.05 to $6.25 diluted EPS range (4% to 1% decrease)
Clorox continues to anticipate that sales will be down from the low single digits to up 1%, reflecting about 2 points of foreign currency headwinds. Importantly, the company's organic sales outlook remains unchanged, with a range of 1% to 3% sales growth, driven primarily by a robust innovation program and the expectation of a return to growth in Bags and Wraps and Charcoal in the back half of the fiscal year.
Gross margin is still expected to be down slightly, consistent with the company's recently updated assumptions about foreign currency exchange rates.
Advertising and sales promotion spending is still projected to be about 10% of sales.
Clorox continues to anticipate selling and administrative expenses to be about 14% of sales.
The company's effective tax rate is still expected to be in the range of 22%-23%.
Net of all these factors, Clorox continues to anticipate fiscal year 2020 diluted EPS to be in the range of $6.05 to $6.25.
Clorox Company (NYSE: CLX) stock price history
The image below obtained from Google, shows the stock price history of Clorox over the last 5 years. And its been a good time for Clorox stockholders. 5 years ago the stock of Clorox was trading at around $100 a stock and its currently trading at $147.04 a stock. That's a very healthy return of 47% provided to Clorox stockholders over the last 5 years.
The stock of Clorox is trading at a lot closer to its 52 week low of $143.58 than it is to its 52 week high of $167.70 a stock, which to us is a clear indication that the short term sentiment and momentum of Clorox stock is negative at this point in time,
The stock of Clorox is trading at a lot closer to its 52 week low of $143.58 than it is to its 52 week high of $167.70 a stock, which to us is a clear indication that the short term sentiment and momentum of Clorox stock is negative at this point in time,
Clorox stock price history over the last 5 years
Recent coverage of Clorox Company
The extract below discusses the latest regarding Clorox as obtained from TheStreet.com
Clorox ( CLX - Get Report) , the U.S. household goods company, earned $1.59 a share in its fiscal first quarter, beating analysts' expectations of $1.54 but falling from year-earlier profit of $1.62 a share. Sales in the quarter were $1.51 billion, which matched Wall Street estimates. A year earlier, Clorox tallied sales of $1.56 billion.
"First-quarter results were generally in line with our expectations. While sales were down, we're pleased that we were able to grow volume and gross margin in three of four segments as we work through challenges in our Bags and Wraps and Charcoal businesses," said Clorox Chairman and CEO Benno Dorer. "Importantly, we remain on track to deliver our fiscal-year outlook.
"I'm confident our new Ignite Strategy will provide the momentum necessary to deliver long-term shareholder value, especially through its focus on expanding our robust innovation and cost savings initiatives," Dorer added. Gross margin in the first quarter rose to 44% from 43.4% a year earlier, driven by cost savings and price increases, offset by higher trade promotion spending and higher manufacturing and logistics costs.
Read the full article here
Clorox ( CLX - Get Report) , the U.S. household goods company, earned $1.59 a share in its fiscal first quarter, beating analysts' expectations of $1.54 but falling from year-earlier profit of $1.62 a share. Sales in the quarter were $1.51 billion, which matched Wall Street estimates. A year earlier, Clorox tallied sales of $1.56 billion.
"First-quarter results were generally in line with our expectations. While sales were down, we're pleased that we were able to grow volume and gross margin in three of four segments as we work through challenges in our Bags and Wraps and Charcoal businesses," said Clorox Chairman and CEO Benno Dorer. "Importantly, we remain on track to deliver our fiscal-year outlook.
"I'm confident our new Ignite Strategy will provide the momentum necessary to deliver long-term shareholder value, especially through its focus on expanding our robust innovation and cost savings initiatives," Dorer added. Gross margin in the first quarter rose to 44% from 43.4% a year earlier, driven by cost savings and price increases, offset by higher trade promotion spending and higher manufacturing and logistics costs.
Read the full article here
Veri Veri Teriyaki a brand of Soy Vay which is owned by Clorox
Clorox Company (NYSE: CLX) stock valuation
So what do we value Clorox stock at after the release of their 1st quarter 2020 earnings and the fiscal guidance provided? Based on Clorox's earnings report and fiscal guidance provided our valuation models provides a target (full value) price of Clorox at $105.80 a stock. We therefore believe that the stock of Clorox s is overvalued.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $105.80 therefore we believe a good entry point into Clorox stock is at $95.20 or below. We expect the stock of Clorox to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is significantly overvalued at this point in time.
We therefore rate Clorox as a sell
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $105.80 therefore we believe a good entry point into Clorox stock is at $95.20 or below. We expect the stock of Clorox to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is significantly overvalued at this point in time.
We therefore rate Clorox as a sell
Next earnings release of Clorox
It is expected that Clorox will publish their 2nd quarter of their 2020 fiscal year in early February 2020