Clorox (NYSE:CLX) shares were trading more than 3% lower after-hours following the company’s reported Q3 results. While adjusted EPS of $1.31 came in better than the consensus estimate of $0.99, revenues grew 2% year-over-year to $1.8 billion, slightly missing the consensus of $1.81 billion. The company also warned about lower margins due to cost pressures.
Gross margin decreased 760 basis points to 35.9% from 43.5% in the year-ago quarter.
"We saw continued strong demand for our products this quarter and delivered sequential gross margin improvement against the backdrop of a volatile and challenging environment," said CEO Linda Rendle. "While cost inflation continues to increase and uncertainty remains, we're seeing the strength and resiliency of our brands driving benefits across the business, and the actions we're taking to rebuild margin are gaining momentum. We're confident that our strategic choices and focus on operational performance position us well over the long term to create value for all our stakeholders."
The company provided its full 2022-year outlook, expecting EPS in the range of $4.05-$4.30, compared to the consensus estimate of $4.18. Revenues are expected to decline 1%-4%. Gross margin is now expected to decrease up to 800 basis points, primarily due to higher than previously anticipated commodity and manufacturing and logistics costs.
Shares of Clorox were down 18% year-to-date going into the results.
By Davit Kirakosyan