The Clorox Company delivered strong results in the third quarter, with organic sales growth in all four segments, gross margin expansion, and double-digit adjusted EPS growth.
The company raised its fiscal year outlook based on its strong performance, but remains cautious about the volatile and challenging operating environment.
Kingsford, one of Clorox's businesses, underperformed in Q3 due to increased competitive activity and widening price gaps. The company has adjusted its plans for Q4 and is increasing support for the business during the peak season.
Clorox continues to invest in advertising and believes it is an important part of supporting the superior value of its brands. Advertising spending is expected to be around 10% of sales.
The company's digital transformation program is on track, with a planned spend of $500 million over five years. There has been a slight shift in timing between years, resulting in a higher spend in fiscal year '23.
Clorox expects commodity inflation to continue, although there has been some moderation. Transportation costs are expected to decline in Q4, while other areas of logistics remain inflationary.
Overall, Clorox's performance was strong in Q3, but challenges remain, particularly in managing price gaps and navigating the uncertain operating environment. The company is focused on maintaining top-line growth, improving margins, and investing in its brands and innovation pipeline.
Undervalued by 1.2% based on the discounted cash flow analysis.
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About Clorox Co.
CEO: Benno Dorer
The Clorox Company (NYSE: CLX) is a leading multinational manufacturer and marketer of consumer and professional products with about 8,800 employees worldwide and fiscal year 2020 sales of $6.7 billion. Clorox markets some of the most tr...