OAKLAND, Calif., Nov. 1, 2021 /PRNewswire/ -- The Clorox Company (NYSE: CLX) today reported results for the first quarter of fiscal year 2022, which ended on Sept. 30, 2021.
First-Quarter Fiscal 2022 Summary
Following is a summary of key first-quarter results. All comparisons are with the first quarter of fiscal year 2021 unless otherwise stated.
"We're off to a solid start in fiscal year 2022 and saw stronger-than-anticipated demand across our portfolio, despite a challenging operating environment. We made meaningful progress on restoring supply — which contributed to holding or gaining market share in the vast majority of our businesses — and we're pulling multiple levers to manage through this inflationary period. This includes pricing actions and stepping up our cost reduction initiatives, which will help us rebuild margins and create fuel to reinvest in the business," said CEO Linda Rendle.
"Although the environment remains volatile and we expect cost pressures to persist, our first-quarter performance, coupled with the actions we're taking, put us on track to meet our fiscal 2022 outlook. Importantly, we also remain focused on delivering against our strategic priorities to create long-term value for our stakeholders."
This press release includes certain non-GAAP financial measures. See "Non-GAAP Financial Information" at the end of this press release for more details.
1 Organic sales growth/(decrease) is a non-GAAP measure. See "Non-GAAP Financial Information" at the end of this press release, including the reconciliation of organic sales growth/(decrease) to net sales growth/(decrease), the most comparable GAAP measure. | |||||||||
2 Adjusted EPS is a non-GAAP measure. See "Non-GAAP Financial Information" at the end of this press release, including the reconciliation of adjusted EPS to diluted EPS, the most comparable GAAP measure. |
Strategic & Operational Highlights
In the first quarter, the company:
Key Segment Results
The following is a summary of key first-quarter results by reportable segment. All comparisons are with the first quarter of fiscal year 2021, unless otherwise stated.
Health and Wellness (Cleaning; Professional Products; Vitamins, Minerals and Supplements)
Household (Bags and Wraps, Grilling, Cat Litter)
Lifestyle (Food, Water Filtration, Natural Personal Care)
International (Sales Outside the U.S.)
Fiscal Year 2022 Outlook
The company is confirming its fiscal year 2022 outlook, with the following elements:
Clorox Updates Earnings Conference Call Schedule
At approximately 4:15 p.m. ET today, Clorox will post prepared management remarks (in transcript and pre-recorded audio formats) of its first quarter fiscal year 2022 results to its website. The company will also host a live Q&A audio webcast with CEO Linda Rendle and Chief Financial Officer Kevin Jacobsen to discuss the results at 5:30 p.m. Eastern time today (and moving forward).
Links to the live (and archived) webcast, the 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.
The Clorox Company
The Clorox Company (NYSE: CLX) is a leading multinational manufacturer and marketer of consumer and professional products with about 9,000 employees worldwide and fiscal year 2021 sales of $7.3 billion. Clorox markets some of the most trusted and recognized consumer brand names, including its namesake bleach and cleaning products; Pine-Sol® cleaners; Liquid-Plumr® clog removers; Poett® home care products; Fresh Step® cat litter; Glad® bags and wraps; Kingsford® grilling products; Hidden Valley® dressings and sauces; Brita® water-filtration products; Burt's Bees® natural personal care products; and RenewLife®, Rainbow Light®, Natural Vitality CALM™, and NeoCell® vitamins, minerals and supplements. The company also markets industry-leading products and technologies for professional customers, including those sold under the CloroxPro™ and Clorox Healthcare® brand names. More than 80% of the company's sales are generated from brands that hold the No. 1 or No. 2 market share positions in their categories.
Clorox is a signatory of the United Nations Global Compact and the Ellen MacArthur Foundation's New Plastics Economy Global Commitment. The company has been broadly recognized for its corporate responsibility efforts, included on the Barron's 2020 100 Most Sustainable Companies list, 2021 Bloomberg Gender-Equality Index, the Human Rights Campaign's 2021 Corporate Equality Index and the 2021 Parity.org Best Places for Women to Advance list, among others. In support of its communities, The Clorox Company and its foundations contributed about $20 million in combined cash grants, product donations and cause marketing in fiscal year 2021. For more information, visit TheCloroxCompany.com and follow the company on Twitter at @CloroxCo.
CLX-F
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 related to the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of governments, consumers, customers, suppliers, employees and the company, on our business, operations, employees, financial condition and results of operations, and any such forward-looking statements, whether concerning the COVID-19 pandemic or otherwise, 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, 2021, as updated from time to time in the company's Securities and Exchange Commission filings. These factors include, but are not limited to: intense competition in the company's markets; the impact of the changing retail environment, including the growth of alternative retail channels and business models, and changing consumer preferences; the impact of COVID-19 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 the company's products; and on worldwide, regional and local adverse economic conditions, including increased risk of inflation; volatility and increases in the costs of raw materials, energy, transportation, labor and other necessary supplies or services; risks related to supply chain issues and product shortages as a result of increased supply chain dependencies due to an expanded supplier network and a reliance on certain single-source suppliers; risks relating to the significant increase in demand for disinfecting and other products due to the COVID-19 pandemic continuing; dependence on key customers and risks related to customer consolidation and ordering patterns; risks related to the company's use of and reliance on information technology systems, including potential security breaches, cyber-attacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, customer, employee or company information, or service interruptions, especially at a time when a large number of the company's employees are working remotely and accessing its technology infrastructure remotely; 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 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 relating to the carrying value of the company's Vitamins, Minerals and Supplements business; and the ability to complete announced transactions and, if completed, integration costs and potential contingent liabilities related to those transactions; 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; the ability of the company to successfully manage global political, legal, tax and regulatory risks, including changes in regulatory or administrative activity; the operations of the company and its suppliers being subject to disruption by events beyond the company's control, including work stoppages, cyber-attacks, weather events or natural disasters, political instability or uncertainty, disease outbreaks or pandemics, such as COVID-19, and terrorism; risks related to international operations and international trade, including 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; inflationary pressures, particularly in Argentina; 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 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 ability of the company to implement and generate cost savings and efficiencies, and successfully implement its business strategies; 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 additional increases in the estimated fair value of The Procter & Gamble Company's interest in the Glad business; the performance of strategic alliances and other business relationships; the company's ability to attract and retain key personnel; the impact of Environmental, Social, and Governance issues, including those related to climate change and sustainability on our sales, operating costs or reputation; 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 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; 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
The following tables provide reconciliations of organic sales growth/(decrease) (non-GAAP) to net sales growth/(decrease), the most comparable GAAP measure:
Three Months Ended September 30, 2021 | |||||||||
Percentage change versus the year-ago period | |||||||||
Health andWellness | Household | Lifestyle | International | Total | |||||
Net sales growth / (decrease) (GAAP) | (8)% | (12)% | 4% | 1% | (6)% | ||||
Add: Foreign Exchange | — | — | — | 2 | 1 | ||||
Add/(Subtract): Divestitures/Acquisitions | — | — | — | — | — | ||||
Organic sales growth / (decrease) (non-GAAP) | (8)% | (12)% | 4% | 3% | (5)% |
The following tables provide reconciliations of adjusted diluted earnings per share (non-GAAP) to diluted earnings per share, the most comparable GAAP measure:
Adjusted Diluted Earnings Per Share (EPS) | ||||||
(Dollars in millions except per share data; shares in thousands) | ||||||
Diluted Earnings Per Share | ||||||
Three Months Ended September 30 | ||||||
2022 | 2021 | % Change | ||||
As reported (GAAP) | $ 1.14 | $ 3.22 | (65%) | |||
Digital capabilities and productivity enhancements investment(1) | 0.07 | - | ||||
Saudi JV acquisition gain (2) | - | (0.59) | ||||
As adjusted (Non-GAAP) | $ 1.21 | $ 2.63 | (54%) | |||
Full Year 2022 Outlook (Estimated Range) | ||||||
Diluted Earnings Per Share | ||||||
Low | High | |||||
As estimated (GAAP) | $ 5.05 | $ 5.35 | ||||
Digital capabilities and productivity enhancements investment (3) | 0.35 | 0.35 | ||||
As adjusted (Non-GAAP) | $ 5.40 | $ 5.70 |
(1)During the quarter ended September 31, 2021, the company incurred approximately $12 ($9 after tax) of operating expenses related to its digital capabilities and productivity enhancements investment. | |||||||
(2) On July 9, 2020, the company increased its investment in each of the two entities comprising its joint venture in the Kingdom of Saudi Arabia (Saudi joint venture). As a result of this transaction, a noncash nonrecurring net gain was recognized of $82 ($76 after tax) in Other (income) expense, net in the quarter ended September 30, 2020, primarily due to the remeasurement of the carrying value of the company's previously held equity investment to fair value. | |||||||
(3) In FY22, the company expects to incur approximately $55 ($42 after tax) of operating expenses related to its digital capabilities and productivity enhancements investment. |
Condensed Consolidated Statements of Earnings (Unaudited) | |||||||
Dollars in millions, except per share data | |||||||
Three Months Ended | |||||||
9/30/2021 | 9/30/2020 | ||||||
Net sales | $ | 1,806 | $ | 1,916 | |||
Cost of products sold | 1,136 | 996 | |||||
Gross profit | 670 | 920 | |||||
Selling and administrative expenses | 236 | 238 | |||||
Advertising costs | 182 | 179 | |||||
Research and development costs | 33 | 32 | |||||
Interest expense | 25 | 25 | |||||
Other (income) expense, net | 9 | (80) | |||||
Earnings before income taxes | 185 | 526 | |||||
Income taxes | 42 | 109 | |||||
Net earnings | 143 | 417 | |||||
Less: Net earnings attributable to noncontrolling interests | 1 | 2 | |||||
Net earnings attributable to Clorox | $ | 142 | $ | 415 | |||
Net earnings per share attributable to Clorox | |||||||
Basic net earnings per share | $ | 1.15 | $ | 3.28 | |||
Diluted net earnings per share | $ | 1.14 | $ | 3.22 | |||
Weighted average shares outstanding (in thousands) | |||||||
Basic | 122,980 | 126,346 | |||||
Diluted | 124,042 | 128,729 |
Reportable Segment Information | |||||||||||||||
(Unaudited) | |||||||||||||||
Dollars in millions | |||||||||||||||
Net sales | Earnings (losses) before income taxes | ||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||
9/30/2021 | 9/30/2020 | % Change(1) | 9/30/2021 | 9/30/2020 | % Change(1) | ||||||||||
Health and Wellness | $ | 745 | $ | 813 | -8% | $ | 105 | $ | 251 | -58% | |||||
Household | 442 | 500 | -12% | 36 | 109 | -67% | |||||||||
Lifestyle | 331 | 318 | 4% | 93 | 102 | -9% | |||||||||
International (2) | 288 | 285 | 1% | 30 | 124 | -76% | |||||||||
Corporate | - | - | - | (79) | (60) | 32% | |||||||||
Total | $ | 1,806 | $ | 1,916 | -6% | $ | 185 | $ | 526 | -65% |
(1) Percentages based on rounded numbers. | |||||||||||||||
(2)On July 9, 2020, the company increased its investment in each of the two entities comprising its joint venture in the Kingdom of Saudi Arabia (Saudi joint venture). As a result of this transaction, a noncash nonrecurring net gain was recognized of $82 ($76 after tax) in Other (income) expense, net in the quarter ended September 30, 2020, primarily due to the remeasurement of the carrying value of the company's previously held equity investment to fair value. |
Condensed Consolidated Balance Sheets | |||||||||||
Dollars in millions | |||||||||||
9/30/2021 | 6/30/2021 | 9/30/2020 | |||||||||
(Unaudited) | (Unaudited) | ||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 210 | $ | 319 | $ | 860 | |||||
Receivables, net | 654 | 604 | 685 | ||||||||
Inventories, net | 785 | 752 | 534 | ||||||||
Prepaid expenses and other current assets | 171 | 154 | 65 | ||||||||
Total current assets | 1,820 | 1,829 | 2,144 | ||||||||
Property, plant and equipment, net | 1,301 | 1,302 | 1,176 | ||||||||
Operating lease right-of-use assets | 310 | 332 | 281 | ||||||||
Goodwill | 1,566 | 1,575 | 1,793 | ||||||||
Trademarks, net | 691 | 693 | 786 | ||||||||
Other intangible assets, net | 218 | 225 | 265 | ||||||||
Other assets | 368 | 378 | 332 | ||||||||
Total assets | $ | 6,274 | $ | 6,334 | $ | 6,777 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities | |||||||||||
Notes and loans payable | $ | 86 | $ | - | $ | - | |||||
Current maturities of long-term debt | 899 | 300 | - | ||||||||
Current operating lease liabilities | 72 | 81 | 64 | ||||||||
Accounts payable and accrued liabilities | 1,582 | 1,675 | 1,395 | ||||||||
Income taxes payable | - | - | 57 | ||||||||
Total current liabilities | 2,639 | 2,056 | 1,516 | ||||||||
Long-term debt | 1,885 | 2,484 | 2,781 | ||||||||
Long-term operating lease liabilities | 288 | 301 | 268 | ||||||||
Other liabilities | 846 | 834 | 797 | ||||||||
Deferred income taxes | 69 | 67 | 104 | ||||||||
Total liabilities | 5,727 | 5,742 | 5,466 | ||||||||
Stockholders' equity | |||||||||||
Preferred stock | - | - | - | ||||||||
Common stock | 131 | 131 | 159 | ||||||||
Additional paid-in capital | 1,166 | 1,186 | 1,146 | ||||||||
Retained earnings | 1,027 | 1,036 | 3,840 | ||||||||
Treasury stock | (1,389) | (1,396) | (3,407) | ||||||||
Accumulated other comprehensive net (loss) income | (567) | (546) | (623) | ||||||||
Total Clorox stockholders' equity | 368 | 411 | 1,115 | ||||||||
Noncontrolling interests | 179 | 181 | 196 | ||||||||
Total stockholders' equity | 547 | 592 | 1,311 | ||||||||
Total liabilities and stockholders' equity | $ | 6,274 | $ | 6,334 | $ | 6,777 |
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SOURCE The Clorox Company