Procter and Gamble (NYSE:PG)
Historical Stock Chart
6 Months : From Apr 2019 to Oct 2019
By Sharon Terlep and Micah Maidenberg
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (May 2, 2019).
Clorox Co. struggled with paltry sales growth in the most recent quarter, bested by stronger-performing rivals and hurt by a weak flu season that curbed demand for disinfecting wipes and professional cleaning products.
The maker of Clorox bleach, Burt's Bees cosmetics, Kingsford charcoal and Pine-Sol cleaner said sales increased 2% from a year earlier to $1.55 billion.
In an earnings season that has included improved performances by Kimberly-Clark Corp., Colgate-Palmolive Co. and, especially, Procter & Gamble Co., Clorox said sales growth slowed in the quarter. Clorox also gave a more tempered outlook for the year.
While its rivals capitalized on an industrywide push to raise prices, Clorox took a hit as competitors in some categories, such as disinfecting wipes and Glad trash bags, didn't follow suit. On Wednesday, analysts questioned whether Clorox raised prices too aggressively.
Clorox Chief Executive Benno Dorer said he is confident the wipes business, in particular, will return to strength without any long-term price cutting.
"We have been here before. As competitors come under pressure, they sometimes react with increased promotional spending," he said. Clorox, Mr. Dorer said, will "make sure that competitors understand this is not the way to defend the category."
He said price increases overall were successful and helped offset higher costs. He added that the company gained share in two-thirds of the categories in which it increased prices.
Clorox shares were off 6.8% at $148.94 on Wednesday afternoon.
The company narrowed its revenue forecast for its fiscal year, saying it expects sales growth of 2% to 3% for the year, narrower than the previous guidance of 2% to 4%.
The company also shifted its fiscal-year profit forecast, predicting $6.25 to $6.35 a share in earnings. Previously, Clorox forecast per-share profit of $6.20 to $6.40.
Profit rose to $187 million, or $1.44 a share, in the quarter, from $181 million, or $1.37 a share, a year earlier. Areas of strength included solid sales gains for Kingsford charcoal, Burt's Bees cosmetics and Brita water-filtration products.
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(END) Dow Jones Newswires
May 02, 2019 02:47 ET (06:47 GMT)
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