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The Clorox Company is a leading multinational manufacturer and marketer of consumer and professional products, operating in approximately 25 countries and selling in over 100 markets. The company offers a variety of well-known brands, including Clorox® bleach and cleaning products, Pine-Sol® cleaners, Liquid-Plumr® clog removers, Glad® bags and wraps, Fresh Step® cat litter, Kingsford® grilling products, Hidden Valley® dressings, Brita® water-filtration products, and Burt's Bees® natural personal care products, among others . Clorox's business is organized into four reportable segments: Health and Wellness, Household, Lifestyle, and International .
- Health and Wellness - Focuses on cleaning and disinfecting products, including Clorox® bleach and Pine-Sol® cleaners.
- Household - Encompasses bags, wraps, cat litter, and grilling products, featuring brands like Glad® and Fresh Step®.
- Lifestyle - Includes food, water-filtration, and natural personal care products, with offerings such as Hidden Valley® dressings and Brita® water-filtration products.
- International - Comprises products sold outside the United States, extending the reach of Clorox's diverse product portfolio.
- Despite your efforts to restore supply and distribution post-cyber attack, certain brands like Litter and Kingsford are still underperforming; what specific strategies are you implementing to regain lost market share and fully capitalize on growth opportunities in these categories?
- Given the significant improvement in gross margins, why aren't you investing more aggressively in advertising and promotion to drive market share gains, especially when competitors are increasing their spend and your market share isn't where you'd like it to be?
- With the recent divestitures of Argentina and the VMS business, how confident are you in maintaining your 3% to 5% long-term organic sales growth target, and what key growth drivers will compensate for the loss of these businesses?
- Considering the increased promotional intensity in some of your categories and the ongoing pressure on consumer spending, how do you plan to balance pricing, promotions, and innovation to drive volume growth without compromising margins?
- The Burt's Bees brand has faced significant supply issues and heightened competition, leading to variability in distribution; what measures are you taking to address these challenges, and how do you plan to ensure Burt's Bees remains a growth-accretive asset in your portfolio?
Customer | Relationship | Segment | Details |
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Walmart | Largest single customer, purchases on individual sales orders | All | 25% of CLX consolidated net sales in FY 2024, which is $7,093 million total net sales, so Walmart’s share is approximately $1,773 million. In FY 2023: 26%, and in FY 2022: 25%.No long-term contract. |
Recent developments and announcements about CLX.
Financial Reporting
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Revenue and Profit Performance: CLX reported strong compounded annual sales growth and has stabilized and rebuilt its gross margin, delivering strong earnings growth. This financial strength enables further investment in the business.
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Management’s Forward Guidance: The company is optimistic about its future, with plans to implement a U.S. ERP system early next fiscal year, which is expected to enhance long-term shareholder value.
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Market Conditions and Strategic Initiatives: CLX has navigated significant disruptions, including a pandemic and a cyber attack, while transforming its operations by implementing a new operating model and divesting underperforming businesses.
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Analyst Questions and Management Responses: Analysts inquired about various topics, including the impact of logistics costs and the company's exposure to raw materials from Mexico and Canada. Management indicated that logistics costs and warehousing would increase due to safety stock, but these would be offset by product shipping, resulting in minimal net impact. They also mentioned that the exposure to raw materials from Mexico and Canada is in the single digits, indicating limited risk.
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Competitive Environment: The company is experiencing increased competitive activity, particularly in the Glad trash category, and is responding with strategic promotions and innovations.
Earnings Call
The company CLX recently held an earnings call where several key points were discussed. The management team, including Linda Rendle (CEO) and Kevin Jacobsen (CFO), provided insights into the company's financial performance and strategic initiatives.
Overall, CLX is focused on maintaining its growth trajectory through strategic investments and operational improvements, while also managing competitive pressures in the market.
Corporate Leadership
CFO Change
Kevin Jacobsen, the CFO of Clorox, has announced his retirement effective April 1, 2025. He will continue in an advisory role until June 2025. Luc Bellet, currently the company's Vice President and Treasurer, will succeed him as CFO starting April 1, 2025.
Leadership Change
Kevin Jacobsen, Clorox's CFO, is retiring after nearly 30 years with the company, effective April 1, 2025. He will continue in an advisory role until June 2025. Jacobsen has been instrumental in driving Clorox's IGNITE strategy and financial transformation.
Luc Bellet, currently Clorox's Treasurer, will step up as the new CFO. Bellet, an 18-year veteran of Clorox, has extensive experience across financial planning, internal audit, and business development. His appointment reflects Clorox's strong succession planning.