BofA Flags Margin Uncertainty for Clorox (CLX) After Q2 Earnings Miss

Core Insights - The Clorox Company (NYSE:CLX) is recognized as one of the 15 Best Wide Moat Dividend Stocks to Invest in [1] - BofA analyst Anna Lizzul raised the price target for Clorox to $112 from $110 while maintaining a Neutral rating, following the company's fiscal Q2 results which showed adjusted EPS below estimates due to falling gross margins [2] - Clorox's second-quarter profit missed market expectations, attributed to consumers opting for cheaper alternatives amid inflation, impacting demand for branded cleaning products [3] Financial Performance - Clorox reported an adjusted EPS of $1.39 for the quarter, below the estimated $1.43, with revenue declining 1% year-over-year to $1.67 billion, which was better than the expected 2.7% decline to $1.64 billion [6] - The Household segment, Clorox's second-largest by revenue, experienced a 54% drop in adjusted EBIT due to increased manufacturing and logistics costs alongside lower net sales [4] - Management reaffirmed its full-year outlook, projecting a 6% to 10% drop in net sales and adjusted EPS between $5.95 and $6.30, citing earlier order fulfillment challenges as a factor [7] Strategic Developments - Clorox is expanding into new categories, including the ready-to-eat market with protein-focused snacks, and is progressing with a $2.25 billion acquisition of GOJO Industries, the maker of Purell, to enhance its health and hygiene portfolio [5] - The company operates across four segments: Health and Wellness, Household, Lifestyle, and International, indicating a diversified business model [8]