Clorox(US:CLX)2024-04-30 20:45Financial Performance - For the fiscal quarter ended March 31, 2024, the Company reported a net sales decrease of 3% compared to the prior year, with a total of $315 million in net sales [53]. - The gross profit for the three months ended March 31, 2024, was $766 million, reflecting a 4% decrease from $800 million in the same period last year, while the gross margin improved to 42.2% from 41.8% [55]. - Selling and administrative expenses increased by 5% to $899 million, representing 17.3% of net sales, compared to 15.9% in the prior year [56]. - Diluted net earnings per share increased by $1.30, or 76%, in the current three-month period, driven by noncash impairment charges in the prior period and cost savings [62]. - The Argentina divestiture resulted in a net sales decrease of 10% to $54 million for the three months ended March 31, 2024 [98]. - Net sales growth for the total company decreased by 5% year-over-year, with specific segments showing declines: Health and Wellness down 6%, Household down 4%, and Lifestyle down 11% [114]. Cost and Savings Initiatives - The Company expects annual cost savings of approximately $75 to $100 million from its streamlined operating model once fully implemented [59]. - The Company continues to implement price increases and cost-saving measures to address inflationary pressures and supply chain challenges [76]. - Total external consulting fees for the nine months ended March 31, 2024, increased to $65 million from $58 million for the same period in 2023, reflecting a growth of approximately 12% [112]. Cash Flow and Investments - The Company reported a net cash provided by operations of $355 million for the nine months ended March 31, 2024, down from $728 million in the prior period [99]. - Net cash used for investing activities was $94 million in the current nine-month period, compared to $142 million in the prior period [102]. - The Company expects to generate positive cash flows from operations in the future, supported by its strong credit ratings and current borrowing availability [103]. Cyberattack Impact - The cyberattack is anticipated to negatively impact fiscal year 2024 results, with some net sales recognized in the second and third quarters due to disruptions [49]. - Volume decreased by 4% in the current three-month period, primarily due to distribution losses in Cleaning resulting from the cyberattack [65]. - The company experienced operational disruptions due to a cyberattack that began on August 11, 2023, impacting business operations throughout the first fiscal quarter of 2024 [122]. - The company has implemented business continuity plans, including manual ordering and processing procedures, to mitigate the impact of the cyberattack [122]. Segment Performance - The International segment reported a 2% increase in net sales, with a segment adjusted EBIT increase of 41% in the current nine-month period [69]. - For the Health and Wellness segment, net sales decreased by 6% to $609 million for the three months ended March 31, 2024, and by 3% to $1.833 billion for the nine months ended March 31, 2024 [90]. - Segment adjusted EBIT for the Health and Wellness segment decreased by 4% to $154 million for the three months ended March 31, 2024 [90]. Market Conditions and Risks - The company is facing intense competition and changing consumer preferences, which are affecting its market performance [117]. - The company has identified risks related to its reliance on information technology systems, including potential security breaches and operational disruptions [117]. - The company continues to evaluate its market risk and has not reported any material changes since June 30, 2023 [121]. Tax and Dividends - The effective tax rate on earnings for the current three-month period was (18.6)%, significantly lower than 14.7% in the prior year, primarily due to the divestiture of the Argentina business [60]. - The Company declared dividends per share of $1.20 for the three months ended March 31, 2024, compared to $1.18 for the same period in 2023 [105]. Financing and Credit - As of March 31, 2024, the Company maintained $34 million of foreign and other credit lines, with $9 million outstanding [78]. - The Company had two stock repurchase programs with an authorized aggregate purchase amount of up to $2 billion, but there were no share repurchases during the three and nine months ended March 31, 2024 and 2023 [79]. Sales Growth - Organic sales growth for the total company was reported at 2%, with international sales showing a significant increase of 48% [114]. - The company noted a foreign exchange impact contributing an additional 7% to sales growth, primarily from international operations [114].