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Clorox(CLX) - 2025 Q2 - Quarterly Results
CLXClorox(CLX)2025-02-03 21:12

Financial Performance - Net sales decreased 15% to 1.69billioncomparedtoa161.69 billion compared to a 16% increase in the year-ago quarter, with organic sales down 9%[4] - Adjusted diluted earnings per share (EPS) for the three months ended December 31, 2024, was 1.55, a decrease of 28% compared to the adjusted EPS of 2.16forthesameperiodin2023[31]−Thecompanyreportednetsalesof2.16 for the same period in 2023[31] - The company reported net sales of 1,686 million for the three months ended Dec. 31, 2024, a 15% decrease from 1,990millioninthesameperiodof2023[36]−ThegrossprofitforthethreemonthsendedDec.31,2024,was1,990 million in the same period of 2023[36] - The gross profit for the three months ended Dec. 31, 2024, was 738 million, down from 866millioninthesameperiodof2023[36]−TheadjustedEBITforthethreemonthsendedDec.31,2024,was866 million in the same period of 2023[36] - The adjusted EBIT for the three months ended Dec. 31, 2024, was 258 million, a 33% decrease compared to 386millioninthesameperiodof2023[35]−TheHealthandWellnesssegmentreportednetsalesof386 million in the same period of 2023[35] - The Health and Wellness segment reported net sales of 628 million for the three months ended Dec. 31, 2024, a 13% decrease from 720millioninthesameperiodof2023[37]FutureOutlook−Thecompanyexpectsnetsalesforfiscalyear2025tobedown1720 million in the same period of 2023[37] Future Outlook - The company expects net sales for fiscal year 2025 to be down 1% to up 2%, with organic sales projected to be up 4% to 7%[9] - Organic sales growth outlook for fiscal year 2025 excludes about 2 points of negative impact from the divestiture of the Argentina business and about 3 points from the Better Health VMS business[20] - The company expects to incur operating expenses of approximately 105-115millionrelatedtodigitalcapabilitiesandproductivityenhancementsinfiscalyear2025[34]OperationalEfficiency−Year−to−datenetcashprovidedbyoperationswas115 million related to digital capabilities and productivity enhancements in fiscal year 2025[34] Operational Efficiency - Year-to-date net cash provided by operations was 401 million, representing a 132% increase compared to 173millionintheyear−agoperiod[4]−Cloroxachieveditsninthconsecutivequarterofgrossmarginexpansion,supportedbystrongcostsavings[6]−Grossmarginisexpectedtoincreaseby125to150basispoints,primarilyduetoholisticmarginmanagementefforts[9]InvestmentsandInnovations−Thecompanylaunchedseveralnewproducts,includingtheHiddenValleyRanchEasySqueezebottleandafullsuiteofBritaPluspitchersanddispensers[6]−CloroxwasrecognizedwithmultipleinnovationawardsforitsuseofAIinproductdevelopmentandsustainabilityefforts[6]−Thetotalincrementalinvestmentfordigitalcapabilitiesandproductivityenhancementsisprojectedtobebetween173 million in the year-ago period[4] - Clorox achieved its ninth consecutive quarter of gross margin expansion, supported by strong cost savings[6] - Gross margin is expected to increase by 125 to 150 basis points, primarily due to holistic margin management efforts[9] Investments and Innovations - The company launched several new products, including the Hidden Valley Ranch Easy Squeeze bottle and a full suite of Brita Plus pitchers and dispensers[6] - Clorox was recognized with multiple innovation awards for its use of AI in product development and sustainability efforts[6] - The total incremental investment for digital capabilities and productivity enhancements is projected to be between 560 million and 580millionoverfiveyears,withapproximately70580 million over five years, with approximately 70% of this amount expected to be recorded as operating costs[26][27] Tax and Legal Matters - The effective tax rate is now expected to be about 26%, with an adjusted effective tax rate of about 23% excluding the impact of the VMS sale[9] - The effective tax rate for the three months ended December 31, 2024, was 18.1%, compared to 29.3% for the same period in 2023[31] - The company recognized approximately 25 million in insurance recoveries related to the cyberattack during the three months ended December 31, 2024[31] - The company incurred cyberattack costs of 25millionforthethreemonthsendedDec.31,2024,netofinsurancerecoveries[35]FinancialPosition−Totalassetsdecreasedto25 million for the three months ended Dec. 31, 2024, net of insurance recoveries[35] Financial Position - Total assets decreased to 5,577 million as of 12/31/2024, down from 5,751millionon6/30/2024and5,751 million on 6/30/2024 and 5,908 million on 12/31/2023[38] - Current liabilities increased to 1,730millionasof12/31/2024,comparedto1,730 million as of 12/31/2024, compared to 1,574 million on 6/30/2024 and 2,022millionon12/31/2023[38]−Long−termdebtremainedstableat2,022 million on 12/31/2023[38] - Long-term debt remained stable at 2,483 million as of 12/31/2024, slightly up from 2,481millionon6/30/2024and2,481 million on 6/30/2024 and 2,479 million on 12/31/2023[38] - Stockholders' equity showed a significant decline to 121millionasof12/31/2024,downfrom121 million as of 12/31/2024, down from 492 million on 6/30/2024 and 218millionon12/31/2023[38]−Cashandcashequivalentsincreasedto218 million on 12/31/2023[38] - Cash and cash equivalents increased to 290 million as of 12/31/2024, up from 202millionon6/30/2024butdownfrom202 million on 6/30/2024 but down from 355 million on 12/31/2023[38] - Receivables decreased to 603millionasof12/31/2024,comparedto603 million as of 12/31/2024, compared to 695 million on 6/30/2024 and 679millionon12/31/2023[38]−Inventoriesdecreasedto679 million on 12/31/2023[38] - Inventories decreased to 592 million as of 12/31/2024, down from 637millionon6/30/2024and637 million on 6/30/2024 and 655 million on 12/31/2023[38] - Total current assets slightly increased to 1,632millionasof12/31/2024,comparedto1,632 million as of 12/31/2024, compared to 1,622 million on 6/30/2024 but down from 1,804millionon12/31/2023[38]−Thecompanyreportedaretainedearningsof1,804 million on 12/31/2023[38] - The company reported a retained earnings of 68 million as of 12/31/2024, a decrease from 250millionon6/30/2024and250 million on 6/30/2024 and 241 million on 12/31/2023[38] - Total liabilities decreased to 5,456millionasof12/31/2024,downfrom5,456 million as of 12/31/2024, down from 5,259 million on 6/30/2024 and 5,690millionon12/31/2023[38]Divestitures−ThecompanycompletedthedivestitureofitsBetterHealthVMSbusiness,whichisexpectedtosupportitsIGNITEstrategyandimprovesalesgrowthandmargins[22]−Thecompanyreportedalossondivestitureof5,690 million on 12/31/2023[38] Divestitures - The company completed the divestiture of its Better Health VMS business, which is expected to support its IGNITE strategy and improve sales growth and margins[22] - The company reported a loss on divestiture of 118 million related to the Better Health VMS business during the six months ended Dec. 31, 2024[34]