DOW JONES NEWSWIRES 
 

Clorox Co.'s (CLX) fiscal second-quarter net income slipped 6.5% amid falling volume as consumers and retailers curbed spending, leading the consumer-products maker to lower its sales outlook for the year.

Consumer-products companies, which generally hold up better than makers of discretionary products, have been pressured by so-called pantry de-stocking, as consumers use the products they already have before purchasing more, as well as inroads from less-expensive private-label, or store brands.

For the quarter ended Dec. 31, the maker of Brita water filters, Hidden Valley salad dressing and Glad trash bags reported net income of $86 million, or 62 cents a share, compared with $92 million, or 65 cents a share, a year earlier.

Revenue increased 2.5% to $1.22 billion. The newly acquired Burt's Bees business added 3 percentage points to revenue, while the stronger dollar pared results by 3 percentage points and exiting from a private-label food bags business shaved 1 percentage point.

Analysts polled by Thomson Reuters expected earnings of 57 cents on revenue of $1.24 billion.

Gross margin edged down to 40% from 40.4% amid higher commodity, manufacturing and transportation costs, though cost savings and price increases provided some benefit.

For 2009, Clorox reiterated its lowered October earnings forecast, but cut its sales forecast by one percentage point, forecasting growth of 3% to 5% amid retailer inventory reductions and curtailed consumer spending.

During the quarter, volume fell 1% as retailers reduced inventory. Clorox's North American sales were up 3% despite a 2% decline in volume, while earnings rose 6%. The volume decline stemmed from lower shipments of auto-care products, partially offset by increased shipments of Burt's Bees, Clorox disinfecting wipes and Hidden Valley salad dressing.

International sales were flat as volume grew 4%, driven by shipments of laundry and homecare products in Latin America. Earnings dropped 24%. Clorox shares were up 1.6% at $52.63 in premarket trading. The stock is down 20% since September.

-By Shirleen Dorman, Dow Jones Newswires; 201-938-2310; shirleen.dorman@dowjones.com

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