Clorox Buys Renew Life, Profit Beats Expectations

Clorox Co. posted better-than-expected profit in its latest quarter and said it bought digestive supplement maker Renew Life, expanding the consumer products maker into the probiotics space.

For Clorox, the acquisition of Renew Life, a brand with an emphasis on digestive health, is an entry into what the company called a "highly fragmented" digestive supplement market. Clorox said Renew Life, which it agreed to buy for $290 million in cash, generated sales of about $115 million last year. The deal closed Monday, Clorox said.

Clorox also raised its full-year earnings guidance to a range of $4.85 to $4.95 a share from $4.75 to $4.90. It now expects sales growth of 1% to 2%, compared with prior guidance of sales remaining flat to growing 1%. On a currency-neutral basis, the company sees revenue climbing between 4% to 5%.

Chief Executive Benno Dorer said better advertising and other "demand-building investments" helped boost results during the quarter.

The maker of a range of consumer products including liquid bleach, disinfecting wipes and Glad trash bags has seen sales climb in recent quarters as margins have expanded. The quarter's gross margin came in at 45.3%, up from 43.2% a year before, buoyed by favorable commodity costs, cost savings and price increases. Volume for the third quarter rose 4%.

Over all in the quarter, Clorox posted a profit of $162 million, or $1.23 a share, down from $174 million, or $1.30 a share a year earlier.

In the previous fiscal year, Clorox closed its Venezuela business. Excluding discontinued operations, Clorox delivered earnings of $159 million, or $1.21 a share, up from $144 million, or $1.08 a share, in the prior-year quarter. Analysts surveyed by Thomson Reuters forecast per-share earnings of $1.11 a share.

Revenue rose to $1.43 billion from $1.4 billion. Analysts projected revenue of $1.41 billion.

Shares were inactive premarket.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

May 03, 2016 08:35 ET (12:35 GMT)

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