Consumer products giant Clorox (NYSE:CLX) fell short of analysts' expectations in Q1 CY2024, with revenue down 5.3% year on year to $1.81 billion. It made a non-GAAP profit of $1.71 per share, improving from its profit of $1.51 per share in the same quarter last year.
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Clorox (CLX) Q1 CY2024 Highlights:
- Revenue: $1.81 billion vs analyst estimates of $1.87 billion (3% miss)
- EPS (non-GAAP): $1.71 vs analyst estimates of $1.38 (24% beat)
- Full year 2024 organic revenue growth : lowered to the low end of the previous range, which was "down low single digit" percentages year on year
- Full year 2024 EPS (non-GAAP) guidance: $5.88 at the midpoint (raised from previous) vs analyst estimates of $5.62 (4.5% beat)
- Gross Margin (GAAP): 42.2%, up from 41.8% in the same quarter last year
- Organic Revenue was up 2% year on year
- Market Capitalization: $18.48 billion
Founded in 1913 with bleach as the sole product offering, Clorox (NYSE:CLX) today is a consumer products giant whose product portfolio spans everything from bleach to skincare to salad dressing to kitty litter.
Household ProductsHousehold products stocks are generally stable investments, as many of the industry's products are essential for a comfortable and functional living space. Recently, there's been a growing emphasis on eco-friendly and sustainable offerings, reflecting the evolving consumer preferences for environmentally conscious options. These trends can be double-edged swords that benefit companies who innovate quickly to take advantage of them and hurt companies that don't invest enough to meet consumers where they want to be with regards to trends.
Sales GrowthClorox is larger than most consumer staples companies and benefits from economies of scale, giving it an edge over its smaller competitors.
As you can see below, the company's revenue has declined over the last three years, dropping 1.4% annually. This is among the worst in the consumer staples industry, where demand is typically stable.
This quarter, Clorox missed Wall Street's estimates and reported a rather uninspiring 5.3% year-on-year revenue decline, generating $1.81 billion in revenue. Looking ahead, Wall Street expects sales to grow 2.6% over the next 12 months, an acceleration from this quarter.
Organic Revenue GrowthWhen analyzing revenue growth, we care most about organic revenue growth. This metric captures a business's performance excluding the impacts of foreign currency fluctuations and one-time events such as mergers, acquisitions, and divestitures.
The demand for Clorox's products has generally risen over the last two years but lagged behind the broader sector. On average, the company's organic sales have grown by 4% year on year.
In the latest quarter, Clorox's organic sales rose 2% year on year. By the company's standards, this growth was a meaningful deceleration from the 8% year-on-year increase it posted 12 months ago. We'll be watching Clorox closely to see if it can reaccelerate growth.
Key Takeaways from Clorox's Q1 Results We enjoyed seeing Clorox exceed analysts' EPS expectations this quarter. We were also glad its full-year earnings guidance exceeded Wall Street's estimates. On the other hand, its organic revenue unfortunately missed analysts' expectations and its operating margin missed Wall Street's estimates. While EPS guidance was favorable as mentioned, the company actually lowered its full year organic revenue growth outlook. Overall, the results could have been better. The company is down 2.3% on the results and currently trades at $144.5 per share.
