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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Clorox Co | NYSE:CLX | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 132.44 | 0 | 09:01:24 |
OAKLAND, Calif., Apr. 30, 2024 /PRNewswire/ -- The Clorox Company (NYSE: CLX) today reported results for the third quarter of fiscal year 2024, which ended Mar. 31, 2024.
Third-Quarter Fiscal Year 2024 Summary
Following is a summary of key results for the third quarter, which reflect continued operational recovery from the previously announced cyberattack. Third-quarter results reflect the March 20, 2024 divestiture of the company's Argentina business and all comparisons are with the third quarter of fiscal year 2023 unless otherwise stated.
"During the quarter, we made significant progress on our long-term strategies to drive profitable growth while also continuing to recover from the cyberattack. We executed well against our IGNITE strategy by evolving our portfolio with the divestiture of the Argentina business, launching innovation, investing in our brands, and delivering another quarter of gross margin expansion," said Chair and CEO Linda Rendle. "While we experienced short-term cyberattack-related supply constraints in a few areas, which impacted sales, we expect to fully restore lost distribution by the end of the fourth quarter. We are on track to exit fiscal year 2024 with strong fundamentals and the right investments and plans in place to deliver against our strategic and financial objectives to enhance long-term shareholder value."
This press release includes certain non-GAAP financial measures. See "Non-GAAP Financial Information" at the end of this press release for more details.
Strategic and Operational Highlights
The following are recent highlights of business and environmental, social and governance achievements:
Key Segment Results
The following is a summary of key third-quarter results by reportable segment. Third-quarter results reflect the March 20, 2024 divestiture of the company's Argentina business and all comparisons are with the third quarter of fiscal year 2023 unless otherwise stated. Prior periods presented have been recast to reflect the reportable segment changes effective in the fourth quarter of fiscal year 2023.
Health and Wellness (Cleaning; Professional Products)
Household (Bags and Wraps; Cat Litter; Grilling)
Lifestyle (Food; Natural Personal Care; Water Filtration)
International (Sales Outside the U.S.)
Divestiture of Argentina Business
As previously disclosed, on March 20, 2024, the company completed the divestiture of its Argentina business, which consisted of its production plants in Argentina as well as the rights to the company's brands in Argentina, Uruguay and Paraguay. The transaction is in support of the company's IGNITE strategy and the commitment to evolve its portfolio to increase focus on its core business to drive more consistent, profitable growth. As a result of this transaction, the company recorded a one-time pretax charge of $240 million ($231 million after tax) during the third quarter, primarily due to the noncash impact of the release of cumulative currency translation losses related to these entities.
Fiscal Year 2024 Outlook
____________________ |
1Organic sales growth / (decrease) and adjusted EPS are non-GAAP measures. See Non-GAAP Financial Information at the end of this press release for reconciliations to the most comparable GAAP measures. |
2 Adjusted EBIT is a non-GAAP measure. See Non-GAAP Financial Information at the end of this press release for reconciliations to the most comparable GAAP measures. |
Clorox Earnings Conference Call Schedule
At approximately 4:15 p.m. ET today, Clorox will post prepared management remarks regarding its third-quarter fiscal year 2024 results.
At 5 p.m. ET today, the company will host a live Q&A audio webcast with Chair and CEO Linda Rendle and Chief Financial Officer Kevin Jacobsen to discuss the results.
Links to the live (and archived) webcast, press release and prepared remarks can be found at Clorox Quarterly Results.
For More Detailed Financial Information
Visit the company's Quarterly Results for the following:
Note: Percentage and basis-point, or point, changes noted in this press release are calculated based on rounded numbers, except for per-share data and the effective tax rate.
About The Clorox Company
The Clorox Company (NYSE: CLX) champions people to be well and thrive every single day. Its trusted brands, which include Brita®, Burt's Bees®, Clorox®, Fresh Step®, Glad®, Hidden Valley®, Kingsford®, Liquid-Plumr®, Pine-Sol® and Natural Vitality®, can be found in about nine of 10 U.S. homes and internationally with brands such as Clorinda®, Chux® and Poett®. Headquartered in Oakland, California, since 1913, Clorox was one of the first U.S. companies to integrate ESG into its business reporting. In 2024 the company was ranked No. 1 on Barron's 100 Most Sustainable Companies list for the second consecutive year. Visit thecloroxcompany.com to learn more.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, among others, statements regarding the expected or potential impact of the company's operational disruption stemming from a cyberattack, and any such forward-looking statements involve risks, assumptions and uncertainties. Except for historical information, statements about future volumes, sales, organic sales growth, foreign currencies, costs, cost savings, margins, earnings, earnings per share, diluted earnings per share, foreign currency exchange rates, tax rates, cash flows, plans, objectives, expectations, growth or profitability are forward-looking statements based on management's estimates, beliefs, assumptions and projections. Words such as "could," "may," "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," "will," "predicts," and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic and financial performance are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed. Important factors that could affect performance and cause results to differ materially from management's expectations, are described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2023, and in the company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023, and as updated from time to time in the company's Securities and Exchange Commission filings. These factors include, but are not limited to: our recovery from the cyberattack, unfavorable general economic and geopolitical conditions beyond our control, including supply chain disruptions, labor shortages, wage pressures, rising inflation, the interest rate environment, fuel and energy costs, foreign currency exchange rate fluctuations, weather events or natural disasters, disease outbreaks or pandemics, such as COVID-19, terrorism, and unstable geopolitical conditions, including ongoing conflicts in the Middle East and Ukraine and rising tensions between China and Taiwan, as well as macroeconomic and geopolitical volatility and uncertainty as a result of a number of these and other factors, including actual and potential shifts between the U.S. and its trading partners, especially China; volatility and increases in the costs of raw materials, energy, transportation, labor and other necessary supplies or services; the impact of the changing retail environment, including the growth of alternative retail channels and business models, and changing consumer preferences; the ability of the company to drive sales growth, increase prices and market share, grow its product categories and manage favorable product and geographic mix; risks related to supply chain issues, product shortages and disruptions to the business, as a result of increased supply chain dependencies due to an expanded supplier network and a reliance on certain single-source suppliers; intense competition in the company's markets; risks related to the company's use of and reliance on information technology systems, including potential and actual security breaches, cyberattacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, customer, employee or company information, business, service or operational disruptions, or that impact the company's financial results or financial reporting, or any resulting unfavorable outcomes, increased costs or legal proceedings; the ability of the company to implement and generate cost savings and efficiencies, and successfully implement its transformational initiatives or strategies, including achieving anticipated benefits and cost savings from the implementation of the streamlined operating model and digital capabilities and productivity enhancements; dependence on key customers and risks related to customer consolidation and ordering patterns; the company's ability to attract and retain key personnel, which may continue to be impacted by challenges in the labor market, such as wage inflation and sustained labor shortages; the company's ability to maintain its business reputation and the reputation of its brands and products; lower revenue, increased costs or reputational harm resulting from government actions and compliance with regulations, or any material costs imposed by changes in regulation; changes to our processes and procedures as a result of our digital capabilities and productivity enhancements investment that may result in changes to the company's internal controls over financial reporting; the ability of the company to successfully manage global political, legal, tax and regulatory risks, including changes in regulatory or administrative activity; risks related to international operations and international trade, including changing macroeconomic conditions as a result of inflation, volatile commodity prices and increases in raw and packaging materials prices, labor, energy and logistics; global economic or political instability; foreign currency fluctuations, such as devaluations, and foreign currency exchange rate controls; changes in governmental policies, including trade, travel or immigration restrictions, new or additional tariffs, and price or other controls; labor claims and civil unrest; potential operational or supply chain disruptions from wars and military conflicts, including ongoing conflicts in the Middle East and Ukraine and rising tensions between China and Taiwan; impact of the United Kingdom's exit from the European Union; potential negative impact and liabilities from the use, storage and transportation of chlorine in certain international markets where chlorine is used in the production of bleach; widespread health emergencies, such as COVID-19; and the possibility of nationalization, expropriation of assets or other government action; the impact of Environmental, Social, and Governance (ESG) issues, including those related to climate change and sustainability on our sales, operating costs or reputation; the ability of the company to innovate and to develop and introduce commercially successful products, or expand into adjacent categories and countries; the impact of product liability claims, labor claims and other legal, governmental or tax proceedings, including in foreign jurisdictions and in connection with any product recalls; the COVID-19 pandemic and related impacts, including on the availability of, and efficiency of the supply, manufacturing and distribution systems for, the company's products, including any significant disruption to such systems; on the demand for and sales of the company's products; and on worldwide, regional and local adverse economic conditions; risks relating to acquisitions, new ventures and divestitures, and associated costs, including for asset impairment charges related to, among others, intangible assets, including trademarks and goodwill, in particular the impairment charges related to the carrying value of the company's Vitamins, Minerals and Supplements business and the divestiture of and related loss on sale from our operations in Argentina; and the ability to complete announced transactions and, if completed, integration costs and potential contingent liabilities related to those transactions; the accuracy of the company's estimates and assumptions on which its financial projections, including any sales or earnings guidance or outlook it may provide from time to time, are based; risks related to increases in the estimated fair value of The Procter & Gamble Company's interest in the Glad business; environmental matters, including costs associated with the remediation and monitoring of past contamination, and possible increases in costs resulting from actions by relevant regulators, and the handling and/or transportation of hazardous substances; the company's ability to effectively utilize, assert and defend its intellectual property rights, and any infringement or claimed infringement by the company of third-party intellectual property rights; the performance of strategic alliances and other business relationships; the effect of the company's indebtedness and credit rating on its business operations and financial results and the company's ability to access capital markets and other funding sources, as well as the cost of capital to the company; the company's ability to pay and declare dividends or repurchase its stock in the future; the impacts of potential stockholder activism; and risks related to any litigation associated with the exclusive forum provision in the company's bylaws.
The company's forward-looking statements in this press release are based on management's current views, beliefs, assumptions and expectations regarding future events and speak only as of the date of this press release. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.
Non-GAAP Financial Information
Divestiture of Argentina Business
In the third quarter of fiscal year 2024, the company completed the divestiture of its Argentina business, which consisted of its production plants in Argentina as well as the rights to the company's brands in Argentina, Uruguay and Paraguay. As a result of this transaction, the company recorded a pretax charge of $240 million ($231 million after tax), primarily due to the noncash impact of the release of cumulative currency translation losses related to these entities.
Due to the nature, scope and magnitude of these costs, the company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period over period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.
Pension Settlement Charge
In the second quarter of fiscal year 2024, the company settled plan benefits related to its domestic qualified pension plan through a combination of an annuity contract purchase with a third-party insurance provider and lump sum payouts. These payments were made using plan assets. In conjunction with this settlement, a one-time noncash charge of $171 million ($130 million after tax) was recorded.
Due to the nature, scope and magnitude of these costs, the company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period over period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.
Cyberattack Costs
As previously disclosed, incremental costs were incurred by the company as the result of a cyberattack. These costs relate primarily to third-party consulting services, including IT recovery and forensic experts and other professional services incurred to investigate and remediate the attack, as well as incremental operating costs from the resulting disruption to the company's business operations.
In the three and nine months ended Mar. 31, 2024, the company has not recognized any insurance proceeds related to the cyberattack. The timing of recognizing insurance recoveries may differ from the timing of recognizing the associated expenses. Costs associated with ongoing cybersecurity monitoring and prevention as well as enhancement to the company's cybersecurity program are not included within this adjustment. The company expects to incur lessening costs related to the cyberattack in future periods.
Due to the nature, scope and magnitude of these costs, the company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period over period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.
Streamlined Operating Model
In the first quarter of fiscal year 2023, Clorox began recognizing costs related to a plan that involves streamlining its operating model to meet its objectives of driving growth and productivity. The streamlined operating model is expected to enhance the company's ability to respond more quickly to changing consumer behaviors and innovate faster. The company anticipates the implementation of this new model will be completed in fiscal year 2024, with different phases occurring throughout the implementation period.
Once fully implemented, the company expects cost savings of approximately $75 million to $100 million annually. The benefits of the streamlined operating model are currently expected to increase future cash flows as a result of cost savings that will be generated primarily in the areas of selling and administration, supply chain, marketing and research and development. The company incurred $60 million of costs in fiscal year 2023 and anticipates incurring approximately $30 million to $40 million in fiscal year 2024 related to this initiative. Related costs are primarily expected to include employee-related costs to reduce certain staffing levels, such as severance payments, as well as for consulting and other costs. Due to the nonrecurring and unusual nature of these costs, the company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period over period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.
Digital Capabilities and Productivity Enhancements Investment
As announced in August 2021, the company plans to invest approximately $500 million over a five-year period in transformative technologies and processes. This investment, which began in the first quarter of fiscal year 2022, includes replacement of the company's enterprise resource planning system and transitioning to a cloud-based platform as well as the implementation of a suite of other digital technologies. Together it is expected that these implementations will generate efficiencies and transform the company's operations in the areas of supply chain, digital commerce, innovation, brand building and more over the long term.
Of the total $500 million investment, approximately 65% is expected to represent incremental operating costs primarily recorded within selling and administrative expenses to be adjusted from reported EPS for purposes of disclosing adjusted EPS through fiscal year 2026. About 70% of these operating costs are expected to be related to the implementation of the ERP, with the remaining costs primarily related to the implementation of complementary technologies.
Due to the nature, scope and magnitude of this investment, these costs are considered by management to represent incremental transformational costs above the historical normal level of spending for information technology to support operations. Since these strategic investments, including incremental operating costs, will cease at the end of the investment period, are not expected to recur in the foreseeable future and are not considered representative of the company's underlying operating performance, the company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period-over-period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.
The following table provides reconciliation of organic sales growth / (decrease) (non-GAAP) to net sales growth / (decrease), the most comparable GAAP measure:
Three months ended Mar. 31, 2024 | |||||||||
Percentage change versus the year-ago period | |||||||||
Health and | Household | Lifestyle | International | Total | |||||
Net sales growth / (decrease) (GAAP) | (6) % | (4) % | (11) % | 2 % | (5) % | ||||
Add: Foreign exchange | — | — | — | 44 | 7 | ||||
Add/(Subtract): Divestitures/acquisitions (2) | — | — | — | 2 | — | ||||
Organic sales growth / (decrease) (non-GAAP) | (6) % | (4) % | (11) % | 48 % | 2 % | ||||
Nine months ended Mar. 31, 2024 | |||||||||
Percentage change versus the year-ago period | |||||||||
Health and | Household | Lifestyle | International | Total | |||||
Net sales growth / (decrease) (GAAP) | (3) % | (6) % | (6) % | 2 % | (3) % | ||||
Add: Foreign Exchange | — | — | — | 27 | 4 | ||||
Add/(Subtract): Divestitures/acquisitions (2) | — | — | — | 1 | — | ||||
Organic sales growth / (decrease) (non-GAAP) | (3) % | (6) % | (6) % | 30 % | 1 % |
(1) | Total Company includes Corporate and Other. |
(2) | The Argentina divestiture impact is calculated as net sales from the Argentina business after March 20, the divestiture date, until the end of the three and nine month periods for the year-ago periods. |
The following tables provide reconciliations of adjusted diluted earnings (losses) per share (non-GAAP) to diluted earnings (losses) per share, the most comparable GAAP measure:
Adjusted Diluted Earnings (Losses) Per Share (EPS) and Adjusted Effective Tax Rate (ETR) | |||||||||||||
(Dollars in millions except per share data) | |||||||||||||
Diluted earnings (losses) per share | Effective tax rate | ||||||||||||
Three months ended | Three months ended | ||||||||||||
3/31/2024 | 3/31/2023 | % Change | 3/31/2024 | 3/31/2023 | |||||||||
As reported (GAAP) | $ (0.41) | $ (1.71) | 76 % | (18.6) % | 14.7 % | ||||||||
Loss on divestiture (1)(2) | 1.85 | — | 26.8 % | — | |||||||||
Cyberattack costs (4) | 0.05 | — | 0.5 % | — | |||||||||
VMS impairment (5)(6) | — | 2.92 | — % | 9.1 % | |||||||||
Streamlined operating model (7) | 0.06 | 0.13 | 0.6 % | — | |||||||||
Digital capabilities and productivity enhancements investment (8) | 0.16 | 0.17 | 1.8 % | — | |||||||||
As adjusted (Non-GAAP) | $ 1.71 | $ 1.51 | 13 % | 11.1 % | 23.8 % | ||||||||
Diluted earnings (losses) per share | Effective tax rate | ||||||||||||
Nine months ended | Nine months ended | ||||||||||||
3/31/2024 | 3/31/2023 | % Change | 3/31/2024 | 3/31/2023 | |||||||||
As reported (GAAP) | $ 0.52 | $ (0.22) | 336 % | 41.9 % | 1,813.5 % | ||||||||
Loss on divestiture (1)(2) | 1.85 | — | (25.3) % | — | |||||||||
Pension settlement charge (3) | 1.04 | — | 1.3 % | — | |||||||||
Cyberattack costs (4) | 0.35 | — | 0.6 % | — | |||||||||
VMS impairment (5)(6) | — | 2.92 | — | (1,790.2) % | |||||||||
Streamlined operating model (7) | 0.08 | 0.27 | 0.2 % | — | |||||||||
Digital capabilities and productivity enhancements investment (8) | 0.52 | 0.45 | 1.4 % | 0.1 % | |||||||||
As adjusted (Non-GAAP) | $ 4.36 | $ 3.42 | 27 % | 20.1 % | 23.4 % |
(1) | During the three and nine months ended Mar. 31, 2024, the company incurred approximately $240 ($231 after tax) of costs related to the divestiture of the Argentina business. | ||||||||||||
(2) | Includes the dilution impact of the difference between the diluted weighted-average shares used in calculating the diluted (losses) per share, as reported to the diluted weighted-average shares used in calculating the non-GAAP diluted earnings per share, as adjusted (124,892 shares). | ||||||||||||
(3) | During the nine months ended Mar. 31, 2024, the company incurred approximately $171 ($130 after tax) of costs related to the settlement of the domestic qualified pension plan. | ||||||||||||
(4) | During the three and nine months ended Mar. 31, 2024, the company incurred approximately $8 ($6 after tax) and $57 ($43 after tax), respectively, of costs related to the cyberattack. These costs relate primarily to third-party consulting services, including IT recovery and forensic experts and other professional services incurred to investigate and remediate the attack, as well as incremental operating costs from the resulting disruption to the company's business operations. | ||||||||||||
(5) | During the three and nine months ended March 31, 2023, a noncash impairment charge for goodwill and trademarks was recorded for $445 ($362 after tax) related to the VMS business. | ||||||||||||
(6) | Includes the dilution impact of the difference between the diluted weighted-average shares used in calculating the diluted (losses) per share, as reported to the diluted weighted-average shares used in calculating the non-GAAP diluted earnings per share, as adjusted (124,183 shares and 124,027 shares, respectively). | ||||||||||||
(7) | During the three and nine months ended Mar. 31, 2024, the company incurred $10 ($7 after tax) and $13 ($10 after tax), respectively, and during the three and nine months ended Mar. 31, 2023, the company incurred approximately $21 ($17 after tax) and $44 ($34 after tax), respectively, of restructuring and related costs, net related to implementation of the streamlined operating model. | ||||||||||||
(8) | During the three and nine months ended Mar. 31, 2024, the company incurred approximately $26 ($20 after tax) and $85 ($64 after tax), respectively, and during the three and nine months ended Mar, 31, 2023, the company incurred approximately $28 ($20 after tax) and $73 ($55 after tax), respectively, of operating expenses related to its digital capabilities and productivity enhancements investment. The expenses relate to the following: |
Three months ended | Nine months ended | ||||||||||||
3/31/2024 | 3/31/2023 | 3/31/2024 | 3/31/2023 | ||||||||||
External consulting fees (a) | $ 19 | $ 22 | $ 65 | $ 58 | |||||||||
IT project personnel costs (b) | 2 | 2 | 6 | 4 | |||||||||
Other (c) | 5 | 4 | 14 | 11 | |||||||||
Total | $ 26 | $ 28 | $ 85 | $ 73 |
(a) | Comprised of third-party consulting fees incurred to assist in the project management and end-to-end systems integration of this transformative investment. The company relies on consultants for certain capabilities required for these programs that the company does not maintain internally. These costs support the implementation of these programs incremental to the company's normal IT costs and will not be incurred following implementation. | |||||||||||||
(b) | Comprised of labor costs associated with internal IT project management teams that are utilized to oversee the new system implementations. Given the magnitude and transformative nature of the implementations planned, the necessary project management costs are incremental to the historical levels of spend and will no longer be incurred subsequent to implementation. As a result of this long-term strategic investment, the company considers these costs not reflective of the ongoing costs to operate its business. | |||||||||||||
(c) | Comprised of various other expenses associated with the company's new system implementations, including company personnel dedicated to the project that have been backfilled with either permanent or temporary resources in positions that are considered part of normal operating expenses. | |||||||||||||
Full year 2024 outlook (estimated range) | |||||||||||||
Diluted earnings per share | Effective Tax Rate | ||||||||||||
Low | High | Midpoint | |||||||||||
As estimated (GAAP) | $ 1.66 | $ 1.81 | 31 % | ||||||||||
Loss on divestiture | 1.85 | 1.85 | (12) % | ||||||||||
Pension settlement charge | 1.04 | 1.04 | 1 % | ||||||||||
Cyberattack costs (9) | 0.35 | 0.35 | — | ||||||||||
Streamlined operating model (10) | 0.20 | 0.20 | — | ||||||||||
Digital capabilities and productivity | 0.70 | 0.70 | 1 % | ||||||||||
As adjusted (Non-GAAP) | $ 5.80 | $ 5.95 | 21 % |
(9) | In FY24, the company expects to incur approximately $57-$65 ($43-$49 after tax) of costs related to the cyberattack. These costs relate primarily to third-party consulting services, including IT recovery and forensic experts and other professional services incurred to investigate and remediate the attack, as well as incremental operating costs from the resulting disruption to the company's business operations. | ||||||||||||
(10) | In FY24, the company expects to incur approximately $30-$40 ($23-$30 after tax) of restructuring and related costs, net related to implementation of the streamlined operating model. | ||||||||||||
(11) | In FY24, the company expects to incur approximately $110-$130 ($84-$99 after tax) of operating expenses related to its digital capabilities and productivity enhancements investment. |
The following table provides reconciliation of adjusted EBIT (non-GAAP) to earnings (losses) before income taxes, the most comparable GAAP measure:
Reconciliation of earnings (losses) before income taxes | |||||||
Three months ended | Nine months ended | ||||||
3/31/2024 | 3/31/2023 | 3/31/2024 | 3/31/2023 | ||||
Earnings (losses) before income taxes | $ (42) | $ (245) | $ 123 | $ 1 | |||
Interest income | (4) | (4) | (21) | (9) | |||
Interest expense | 22 | 24 | 69 | 69 | |||
Loss on divestiture | 240 | — | 240 | — | |||
Pension settlement charge | — | — | 171 | — | |||
Cyberattack costs | 8 | — | 57 | — | |||
VMS impairment | — | 445 | — | 445 | |||
Streamlined operating model | 10 | 21 | 13 | 44 | |||
Digital capabilities and productivity | 26 | 28 | 85 | 73 | |||
Adjusted EBIT | $ 260 | $ 269 | $ 737 | $ 623 | |||
Condensed Consolidated Statements of Earnings (Unaudited) | ||||||||||
Dollars in millions, except per share data | ||||||||||
Three months ended | Nine months ended | |||||||||
03/31/2024 | 03/31/2023 | 3/31/2024 | 3/31/2023 | |||||||
Net sales | $ 1,814 | $ 1,915 | $ 5,190 | $ 5,370 | ||||||
Cost of products sold | 1,048 | 1,115 | 3,026 | 3,324 | ||||||
Gross profit | 766 | 800 | 2,164 | 2,046 | ||||||
Selling and administrative expenses | 301 | 311 | 899 | 854 | ||||||
Advertising costs | 215 | 206 | 566 | 523 | ||||||
Research and development costs | 32 | 35 | 93 | 100 | ||||||
Loss on divestiture | 240 | — | 240 | — | ||||||
Pension settlement charge | — | — | 171 | — | ||||||
Goodwill, trademark and other intangible asset impairments | — | 445 | — | 445 | ||||||
Interest expense | 22 | 24 | 69 | 69 | ||||||
Other (income) expense, net | (2) | 24 | 3 | 54 | ||||||
Earnings (losses) before income taxes | (42) | (245) | 123 | 1 | ||||||
Income tax expense (benefit) | 8 | (36) | 52 | 21 | ||||||
Net earnings (losses) | (50) | (209) | 71 | (20) | ||||||
Less: Net earnings attributable to noncontrolling interests | 1 | 2 | 7 | 7 | ||||||
Net earnings (losses) attributable to Clorox | $ (51) | $ (211) | $ 64 | $ (27) | ||||||
Net earnings (losses) per share attributable to Clorox | ||||||||||
Basic net earnings (losses) per share | $ (0.41) | $ (1.71) | $ 0.52 | $ (0.22) | ||||||
Diluted net earnings (losses) per share | $ (0.41) | $ (1.71) | $ 0.52 | $ (0.22) | ||||||
Weighted average shares outstanding (in thousands) | ||||||||||
Basic | 124,249 | 123,649 | 124,133 | 123,512 | ||||||
Diluted | 124,249 | 123,649 | 124,721 | 123,512 |
Reportable Segment Information | |||||||||||
(Unaudited) | |||||||||||
Dollars in millions | |||||||||||
Net sales | Net sales | ||||||||||
Three months ended | Nine months ended | ||||||||||
3/31/2024 | 3/31/2023 | % Change(1) | 3/31/2024 | 3/31/2023 | % Change(1) | ||||||
Health and Wellness | $ 609 | $ 647 | (6) % | $ 1,833 | $ 1,881 | (3) % | |||||
Household | 526 | 550 | (4) | 1,353 | 1,435 | (6) | |||||
Lifestyle | 315 | 353 | (11) | 947 | 1,005 | (6) | |||||
International | 310 | 305 | 2 | 891 | 876 | 2 | |||||
Corporate and Other (2) | 54 | 60 | (10) | 166 | 173 | (4) | |||||
Total | $ 1,814 | $ 1,915 | (5) % | 5,190 | $ 5,370 | (3) % | |||||
Segment adjusted EBIT | Segment adjusted EBIT | ||||||||||
Three months ended | Nine months ended | ||||||||||
3/31/2024 | 3/31/2023 | % Change(1) | 3/31/2024 | 3/31/2023 | % Change(1) | ||||||
Health and Wellness | $ 154 | $ 161 | (4) % | $ 517 | $ 418 | 24 % | |||||
Household | 74 | 99 | (25) | 162 | 165 | (2) | |||||
Lifestyle | 64 | 83 | (23) | 192 | 217 | (12) | |||||
International | 38 | 27 | 41 | 104 | 74 | 41 | |||||
Corporate and Other (2) | (70) | (101) | 31 | (238) | (251) | 5 | |||||
Total | $ 260 | $ 269 | (3) % | 737 | $ 623 | 18 % | |||||
Interest income | 4 | 4 | 21 | 9 | |||||||
Interest expense | (22) | (24) | (69) | (69) | |||||||
Loss on divestiture (3) | (240) | — | (240) | — | |||||||
Pension settlement (4) | — | — | (171) | — | |||||||
Cyberattack costs (5) | (8) | — | (57) | — | |||||||
VMS impairment (6) | — | (445) | — | (445) | |||||||
Streamlined operating model (7) | (10) | (21) | (13) | (44) | |||||||
Digital capabilities and productivity enhancements | (26) | (28) | (85) | (73) | |||||||
Earnings (losses) before income taxes | $ (42) | $ (245) | (83) % | $ 123 | $ 1 | 12,200 % |
(1) | Percentages based on rounded numbers. | |||||||||||
(2) | Corporate and Other includes the Vitamin, Minerals and Supplements business. | |||||||||||
(3) | Represents the loss on divestiture of Argentina operations of $240 ($231 after tax) for the three and nine months ended Mar. 31, 2024. | |||||||||||
(4) | Represents the pension settlement charge of $171 ($130 after tax) for the nine months ended Mar. 31, 2024. | |||||||||||
(5) | Represents costs related to the cyberattack of $8 ($6 after tax) and $57 ($43 after tax) for the three and nine months ended Mar. 31, 2024, respectively. | |||||||||||
(6) | Represents a $445 ($362 after tax) noncash impairment charge related to the VMS business for the three and nine months ended March 31, 2023. | |||||||||||
(7) | Represents restructuring and related costs, net for implementation of the streamlined operating model of $10 ($7 after tax) and $13 ($10 after tax) for the three and nine months ended Mar. 31, 2024, and $21 ($17 after tax) and $44 ($34 after tax) for the three and nine months ended Mar. 31, 2023, respectively. | |||||||||||
(8) | Represents expenses related to the company's digital capabilities and productivity enhancements investment of $26 ($20 after tax) and $85 ($64 after tax) for the three and nine months ended Mar. 31, 2024, and $28 ($20 after tax) and $73 ($55 after tax) for the three and nine months ended Mar. 31, 2023, respectively. |
Condensed Consolidated Balance Sheets | |||||||||||
Dollars in millions | |||||||||||
3/31/2024 | 6/30/2023 | 3/31/2023 | |||||||||
(Unaudited) | (Unaudited) | ||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 219 | $ | 367 | $ | 242 | |||||
Receivables, net | 673 | 688 | 678 | ||||||||
Inventories, net | 674 | 696 | 735 | ||||||||
Prepaid expenses and other current assets | 95 | 77 | 90 | ||||||||
Total current assets | 1,661 | 1,828 | 1,745 | ||||||||
Property, plant and equipment, net | 1,292 | 1,345 | 1,315 | ||||||||
Operating lease right-of-use assets | 379 | 346 | 359 | ||||||||
Goodwill | 1,229 | 1,252 | 1,250 | ||||||||
Trademarks, net | 539 | 543 | 546 | ||||||||
Other intangible assets, net | 149 | 169 | 176 | ||||||||
Other assets | 556 | 462 | 427 | ||||||||
Total assets | $ | 5,805 | $ | 5,945 | $ | 5,818 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities | |||||||||||
Notes and loans payable | $ | 111 | $ | 50 | $ | 138 | |||||
Current operating lease liabilities | 82 | 87 | 88 | ||||||||
Accounts payable and accrued liabilities | 1,653 | 1,659 | 1,722 | ||||||||
Income Taxes Payable | — | 121 | 48 | ||||||||
Total current liabilities | 1,846 | 1,917 | 1,996 | ||||||||
Long-term debt | 2,480 | 2,477 | 2,476 | ||||||||
Long-term operating lease liabilities | 347 | 310 | 323 | ||||||||
Other liabilities | 853 | 825 | 824 | ||||||||
Deferred income taxes | 24 | 28 | 27 | ||||||||
Total liabilities | 5,550 | 5,557 | 5,646 | ||||||||
Commitments and contingencies | |||||||||||
Stockholders' equity | |||||||||||
Preferred stock | — | — | — | ||||||||
Common stock | 131 | 131 | 131 | ||||||||
Additional paid-in capital | 1,270 | 1,245 | 1,232 | ||||||||
Retained earnings | 34 | 583 | 415 | ||||||||
Treasury stock | (1,189) | (1,246) | (1,277) | ||||||||
Accumulated other comprehensive net (loss) income | (155) | (493) | (498) | ||||||||
Total Clorox stockholders' equity | 91 | 220 | 3 | ||||||||
Noncontrolling interests | 164 | 168 | 169 | ||||||||
Total stockholders' equity | 255 | 388 | 172 | ||||||||
Total liabilities and stockholders' equity | $ | 5,805 | $ | 5,945 | $ | 5,818 |
CLX-F
View original content to download multimedia:https://www.prnewswire.com/news-releases/clorox-reports-q3-fiscal-year-2024-results-updates-outlook-302131956.html
SOURCE The Clorox Company
Copyright 2024 PR Newswire
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