Q1 2024 Earnings Summary
Reported on Jan 4, 2025 (After Market Close)
Pre-Earnings Price$115.38Last close (Nov 1, 2023)
Post-Earnings Price$127.50Open (Nov 2, 2023)
Price Change
$12.12(+10.50%)
- Clorox management is confident in fully recovering from the cyberattack, viewing it as a short-term issue with no structural impact on the business. They have a history of successfully restoring distribution and market share after disruptions, such as post-COVID.
- The company maintains strong relationships with retailers, who are partnering closely to rebuild inventory and prioritizing Clorox products, even during busy seasons. This collaboration is assisting in rapidly restoring supply and distribution.
- Despite the disruption, Clorox remains committed to innovation, with major brands set to launch new products in the back half of fiscal 2024, supporting future growth. They have preserved their innovation plans and are focused on bringing these to market.
- Bear Case for Clorox ($CLX) Based on the Q&A Section of the Earnings Call Transcript:*
- Operational Disruptions from Cyber Attack Leading to Sales and Inventory Challenges: The cyber attack caused wide-scale operational disruptions, resulting in significant shipment declines (down approximately 30%) and loss of sales due to out-of-stock situations. Rebuilding retailer inventories will take time, and the pace of recovery is uncertain, potentially affecting sales and market share in the near term. ,
- Pressure on Gross Margins Due to Increased Merchandising and Lapping of Pricing Actions: Clorox expects increased merchandising levels, which will pressure gross margins in the second half of the fiscal year. Additionally, the company is lapping prior pricing actions, and as the benefit from pricing moderates, gross margins are projected to be flat despite initial improvements. ,