Clorox Earnings Fall Amid Higher Spending
August 03 2016 - 9:27AM
Dow Jones News
By Joshua Jamerson
Clorox Co. said earnings fell 14% in the latest quarter, hurt by
higher spending on investments in the company's brands as it tries
to fuel growth through product innovation and more marketing.
The company also said Wednesday it expects full-year earnings
between $5.38 to $5.58 in its new year that started in July on 2%
to 4% sales growth. Analysts polled by Thomson Reuters expected
$5.22 a share.
For the three months ended in June, advertising costs rose 27%
compared with the prior-year period while research and development
costs rose 7.8%.
"In the short term, this deliberate choice paid off in top-line
increases in an environment where such growth is hard to come by,"
said Chief Executive Benno Dorer, adding that the company believes
the investments will also boost the long-term health of the
company.
The maker of a range of consumer products including liquid
bleach, disinfecting wipes and Glad trash bags has seen sales climb
in recent quarters and its margins have expanded amid favorable
commodity costs, cost savings and price increases. But in the
latest period, the company said those positive effects were more
than offset by higher manufacturing and logistics costs,
unfavorable mix, one-time integration costs related to its
RenewLife acquisition and higher trade promotion spending. Gross
margin was 45.4%, from 45.6% for the quarter.
Over all, Clorox posted a profit of $165 million, or $1.26 a
share, down from $191 million, or $1.46 a share, in the prior-year
quarter.
Analysts surveyed by Thomson Reuters forecast per-share earnings
of $1.28 a share, according to FactSet. Revenue rose 2.8% to $1.6
billion. Analysts projected revenue of $1.65 billion.
Shares were inactive premarket.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
August 03, 2016 09:12 ET (13:12 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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