Clorox Buys Renew Life, Profit Beats Expectations
May 03 2016 - 8:50AM
Dow Jones News
Clorox Co. posted better-than-expected profit in its latest
quarter and said it bought digestive supplement maker Renew Life,
expanding the consumer products maker into the probiotics
space.
For Clorox, the acquisition of Renew Life, a brand with an
emphasis on digestive health, is an entry into what the company
called a "highly fragmented" digestive supplement market. Clorox
said Renew Life, which it agreed to buy for $290 million in cash,
generated sales of about $115 million last year. The deal closed
Monday, Clorox said.
Clorox also raised its full-year earnings guidance to a range of
$4.85 to $4.95 a share from $4.75 to $4.90. It now expects sales
growth of 1% to 2%, compared with prior guidance of sales remaining
flat to growing 1%. On a currency-neutral basis, the company sees
revenue climbing between 4% to 5%.
Chief Executive Benno Dorer said better advertising and other
"demand-building investments" helped boost results during the
quarter.
The maker of a range of consumer products including liquid
bleach, disinfecting wipes and Glad trash bags has seen sales climb
in recent quarters as margins have expanded. The quarter's gross
margin came in at 45.3%, up from 43.2% a year before, buoyed by
favorable commodity costs, cost savings and price increases. Volume
for the third quarter rose 4%.
Over all in the quarter, Clorox posted a profit of $162 million,
or $1.23 a share, down from $174 million, or $1.30 a share a year
earlier.
In the previous fiscal year, Clorox closed its Venezuela
business. Excluding discontinued operations, Clorox delivered
earnings of $159 million, or $1.21 a share, up from $144 million,
or $1.08 a share, in the prior-year quarter. Analysts surveyed by
Thomson Reuters forecast per-share earnings of $1.11 a share.
Revenue rose to $1.43 billion from $1.4 billion. Analysts
projected revenue of $1.41 billion.
Shares were inactive premarket.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
May 03, 2016 08:35 ET (12:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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