Clorox Shares Rise as Adjusted Q4 Earnings Beat Estimates; 2017 Forecast In-Line

earningsCleaning products maker Clorox Co on Wednesday posted solid fiscal fourth quarter earnings results, as the company continues to grow top-line revenues in the low- to mid-single digits year after year.

The Oakland, CA-based company posted fourth quarter adjusted net income of $1.30 per share, beating Wall Street estimates for $1.28. Revenue rose 2.8% from last year to $1.6 billion, which was in-line with analysts’ view for $1.59 billion.

Looking ahead, CLX forecast full-year 2017 earnings to range from $5.13 to $5.28 per share on revenue growth of 2% to 4%. That guidance is in-line with Wall Street’s view for EPS of $5.22 and sales of $5.98 billion.

Other interesting notes from the quarter included:

  • Volume for the fourth quarter rose 7%, with all four major business segments seeing gains.
  • Sales rose 3%, driven by higher volume, the RenewLife acquisition, and improving international business.
  • Unfavorable foreign currency exchange rates ate into results to the tune of 2 percentage points.
  • On a constant currency basis, sales would have grown 5%.

From the press release:

“I’m very pleased with the results we delivered in fiscal year 2016, with volume and sales growth across all of our U.S. segments and strong earnings growth behind our 2020 Strategy. Notably, we delivered these results on top of strong growth in our prior fiscal year,” said Chief Executive Officer Benno Dorer.

“We delivered margin expansion, supported by productivity gains and another year of substantial cost savings. Our strategy is working, giving us confidence in our strategic choices. This confidence manifests itself in the fourth quarter, when we made the deliberate choice to significantly increase investments in our demand building programs, which include innovation across our portfolio and digital marketing communications enhancing brand engagement with our consumers. In the short term, this deliberate choice paid off in topline increases in an environment where such growth is hard to come by. Importantly we believe these investments will also generate positive returns for the long-term health of our business.”

Clorox Co (NYSE:CLX) shares rose $1.60 (+1.23%) in Wednesday morning trading to $131.92. CLX has gained 4.02% year-to-date, trailing the performance of the S&P 500, which has gained 5.7%.


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