Clorox Reports Q4 and FY24 Results, Provides FY25 Outlook
Company Announces Sale of its Better Health Vitamins, Minerals and Supplements Business
Fourth-Quarter Fiscal Year 2024 Summary
The following is a summary of key fourth-quarter results. All comparisons are with the fourth quarter of fiscal year 2023 unless otherwise stated.
-
Net sales decreased 6% to
$1.9 billion compared to an increase of 12% in the year-ago quarter. The net sales decrease was driven largely by the impacts of theArgentina divestiture, unfavorable price mix and lower volume. Organic sales1 decreased 3%. - Gross margin increased 380 basis points to 46.5% from 42.7% in the year-ago quarter primarily due to lower manufacturing and logistics costs, the benefit of cost savings initiatives and favorable commodity costs, partially offset by the impact of higher trade promotion spending.
-
Diluted net earnings per share (diluted EPS) increased 22% to
$1.73 from $1.42 in the year-ago quarter. This includes insurance recoveries related to the cyberattack, net of incremental costs (17 cents ), partially offset by continued investments in the company's long-term strategic digital capabilities and productivity enhancements (14 cents ) as well as implementation of the company's streamlined operating model (12 cents ). -
Adjusted EPS
1 increased 9% to
$1.82 from$1.67 in the year-ago quarter, due in part to higher gross margin and lower selling and administrative expenses. These factors were partially offset by lower net sales and higher advertising investments.
"We closed out the fiscal year with strong margin expansion and double-digit adjusted EPS growth despite substantial disruption and consumption loss from the cyberattack. While fully restoring supply and distribution, as well as recovering nearly all of our market share, we remained relentless in driving our IGNITE strategy forward. We made strong progress as we evolved our portfolio to accelerate profitable growth, completed the implementation of our streamlined operating model and advanced our digital transformation. We achieved all of this while continuing to invest strongly behind our brands to provide superior value in a challenging environment where consumers continue to seek value," said Chair and CEO
This press release includes certain non-GAAP financial measures. See "Non-GAAP Financial Information" at the end of this press release for more details.
Strategic and Operational Highlights
The following are recent highlights of business and environmental, social and governance achievements:
- Fully restored distribution losses and regained the vast majority of lost market share caused by the cyberattack, supported by full supply chain restoration and strong merchandising levels across the portfolio.
- Continued to invest behind value superiority with strong advertising and innovations across major brands in fiscal year 2024, such as Clorox Toilet Bomb Foaming Toilet Bowl Cleaner, Pine-Sol concentrated multi-surface cleaner, Brita Refillable Water Filtration System, seven new
Hidden Valley Ranch flavors and new fragrances in the Glad ForceFlex Scented Trash Bag lineup. - Achieved seventh consecutive quarter of gross margin expansion, supported by another strong quarter of cost savings, and are on track to fully rebuild gross margin in fiscal year 2025.
- Successfully completed implementation of the company's streamlined operating model, enhancing the ability to respond more quickly to changing consumer behaviors and innovate faster. Through this new model the company expects to deliver ongoing cost savings of approximately
$100 million annually. - Named a Best Company to Work For by U.S. News & World Report, included in America's Climate Leaders by
USA Today , listed as one of America's Best Employers for Diversity by Forbes, and recognized as one of the Best Companies for Equal Opportunity for Advancement by parity.org.
Key Segment Results
The following is a summary of key fourth-quarter results by reportable segment. All comparisons are with the fourth quarter of fiscal year 2023, unless otherwise stated. Prior periods presented have been recast to reflect the reportable segment changes effective in the fourth quarter of fiscal year 2023.
Health and Wellness (Cleaning; Professional Products)
- Net sales were essentially flat, driven by 2 points of higher volume offset by 2 points of unfavorable price mix.
- Cleaning sales increased, driven mainly by restored distribution and strong consumption supported by new innovations and increased merchandising.
- Professional Products sales decreased, driven mainly by lower shipments of Pine-Sol products as distributors transitioned to new Pine-Sol concentrated cleaner.
- Segment adjusted EBIT2 increased 15%, driven by favorable manufacturing and logistics costs and lower selling and administrative expenses, partially offset by higher advertising investments.
Household (Bags and Wraps; Cat Litter; Grilling)
- Net sales decreased 10%, driven by 5 points of lower volume and 5 points of unfavorable price mix.
- Bags and Wraps sales decreased, driven primarily by distribution recovery occurring late in the quarter, increased competitive activity and higher trade promotion spending.
- Cat Litter sales decreased, driven mainly by distribution recovery occurring late in the quarter, increased competitive activity and higher trade promotion spending.
- Grilling sales decreased, driven primarily by lower consumption due to unfavorable seasonal weather which impacted the overall category.
- Segment adjusted EBIT decreased 31%, driven by lower net sales, partially offset by cost savings and favorable manufacturing and logistics costs.
Lifestyle (Food; Water Filtration; Natural Personal Care)
- Net sales decreased 2%, driven by 2 points of unfavorable price mix.
- Food sales increased, driven mainly by strong consumption supported by new innovations.
- Water Filtration sales decreased, driven by lower consumption mainly due to a shift in the seasonal timing of back-to-school promotions at certain key retailers as well as higher trade promotion spending.
- Natural Personal Care sales decreased, driven primarily by increased competitive activity and distribution losses in the non-core portion of the portfolio.
- Segment adjusted EBIT decreased 9%, driven by higher advertising investments and lower net sales, partially offset by favorable commodity costs and cost savings.
International (Sales Outside the
- Net sales decreased 11%, mainly driven by the impact of the
Argentina divestiture. ExcludingArgentina , organic sales1 increased 5%, supported by volume growth and favorable price mix. - Segment adjusted EBIT increased 20%, primarily due to higher volume and cost savings, partially offset by the net impacts of the
Argentina divestiture.
Fiscal Year 2024 Summary
The following is a summary of key fiscal year 2024 results. All comparisons are to fiscal year 2023.
- Net sales decreased 4% (flat organic sales) primarily driven by 6 points of lower volume and 3 points of unfavorable foreign exchange rates, partially offset by 5 points of favorable price mix.
- Gross margin increased 360 basis points to 43.0% from 39.4% in the year-ago period. The increase was primarily driven by the benefits of pricing and cost savings initiatives, which were partially offset by unfavorable foreign exchange rates.
-
Diluted EPS increased 88% to
$2.25 from$1.20 in the year-ago period. This includes the lapping of a noncash impairment charge in the Vitamins, Minerals and Supplements business from the year-ago period, partially offset by the loss relating to the divestiture of theArgentina business and the noncash pension settlement charge. -
Adjusted EPS increased 21% to
$6.17 from$5.09 , driven mainly by the benefits of pricing and gross margin expansion. These factors were partially offset by unfavorable foreign exchange rates, lower volume and higher advertising investments. -
Net cash provided by operations was
$695 million compared to$1.2 billion in fiscal year 2023, representing a 40% decrease.
Definitive Agreement to Sell the Better Health Vitamins, Minerals and Supplements Business
The company has entered into a definitive agreement to sell its Better Health VMS business in its entirety, including the Natural Vitality,
"The Better Health VMS business will do well under the leadership of Piping Rock, as they have built a strong pure-play business in a category that is poised for growth," said Rendle. "This transaction is a deliberate step in our IGNITE strategy and reflects our commitment to evolve our portfolio to drive more consistent, profitable growth."
The transaction is expected to close in the first quarter of the company's current fiscal year, ending
The Better Health VMS business represents approximately 3% of the company's fiscal year 2024 net sales. As a result of this transaction, the company expects to incur a one-time, after-tax charge of
The company will discuss the transaction further during today's fourth quarter and fiscal year 2024 earnings conference call.
Fiscal Year 2025 Outlook
- Net sales are expected to be flat to down 2% compared to the prior year. Organic sales are expected to be up 3% to up 5% excluding about 2 points of negative impact from the divestiture of the company's business in
Argentina and about 3 points of negative impact from the expected divestiture of the Better Health VMS business. - Gross margin is expected to be up about 100 basis points, primarily due to the benefits of holistic margin management efforts, partially offset by cost inflation and higher trade promotional spending.
- Selling and administrative expenses are expected to be between 15% and 16% of net sales, which includes about 150 basis points of impact from the company's strategic investments in digital capabilities and productivity enhancements.
- Advertising and sales promotion spending is expected to be about 11% to 11.5% of net sales, reflecting the company's ongoing commitment to invest behind its brands.
- The company's effective tax rate is expected to be about 28%. Excluding the impact of the Better Health VMS sale, the company expects its fiscal year adjusted effective tax rate to be about 24%.
- Diluted EPS is expected to be between
$4.95 and$5.20 , or an increase between 120% and 131%. - Adjusted EPS is expected to be between
$6.55 and$6.80 , or an increase between 6% and 10%, respectively. Adjusted EPS excludes the long-term strategic investment in digital capabilities and productivity enhancements, estimated to be about60 cents , and a loss on sale related to the divestiture of the Better Health VMS business in the first quarter, estimated to be about$1.00 .
____________________
1 Organic sales growth/(decrease) and adjusted EPS are non-GAAP measures. See Non-GAAP Financial Information at the end of this press release for reconciliations to the most comparable GAAP measures.
2 Adjusted EBIT is a non-GAAP measure. See Non-GAAP Financial Information at the end of this press release for reconciliations to the most comparable GAAP measures.
Clorox Earnings Conference Call Schedule
At approximately
At
Links to the live (and archived) webcast, press release and prepared remarks can be found at Clorox Quarterly Results.
For More Detailed Financial Information
Visit the company's Quarterly Results for the following:
- Supplemental unaudited volume and sales growth information
- Supplemental unaudited gross margin drivers information
- Supplemental unaudited cash flow information and free cash flow reconciliation
- Supplemental unaudited reconciliation of earnings before interest and taxes (EBIT) and adjusted EBIT
- Supplemental unaudited reconciliation of adjusted earnings per share (EPS) and adjusted effective tax rate (ETR)
Note: Percentage and basis-point, or point, changes noted in this press release are calculated based on rounded numbers, except for per-share data and the effective tax rate.
About
CLX-F
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, among others, statements regarding the expected or potential impact of the company's operational disruption stemming from a cyberattack, and any such forward-looking statements involve risks, assumptions and uncertainties. Except for historical information, statements about future volumes, sales, organic sales growth, foreign currencies, costs, cost savings, margins, earnings, earnings per share, diluted earnings per share, foreign currency exchange rates, tax rates, cash flows, plans, objectives, expectations, growth or profitability are forward-looking statements based on management's estimates, beliefs, assumptions and projections. Words such as "could," "may," "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," "will," "predicts," and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic and financial performance are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed. Important factors that could affect performance and cause results to differ materially from management's expectations, are described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Annual Report on Form 10-K for the fiscal year ended
The company's forward-looking statements in this press release are based on management's current views, beliefs, assumptions and expectations regarding future events and speak only as of the date of this press release. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.
Non-GAAP Financial Information
- This press release contains non-GAAP financial information related to organic sales growth / (decrease), adjusted EPS, adjusted ETR and segment adjusted EBIT for the fourth quarter of fiscal year 2024 and for fiscal year 2024; as well as organic sales growth / (decrease) and adjusted EPS outlook for fiscal year 2025.
- Clorox defines organic sales growth / (decrease) as GAAP net sales growth / (decrease) excluding the effect of foreign exchange rate changes and any acquisitions or divestitures.
- Organic sales growth / (decrease) outlook for fiscal year 2025 excludes about 2 points of negative impact from the divestiture of the company's business in
Argentina and about 3 points of negative impact from the expected divestiture of the Better Health VMS business. - Management believes that the presentation of organic sales growth / (decrease) is useful to investors because it excludes sales from any acquisitions and divestitures, which results in a comparison of sales only from the businesses that the company was operating and expects to continue to operate throughout the relevant periods, and the company's estimate of the impact of foreign exchange rate changes, which are difficult to predict and out of the control of the company and management. However, organic sales growth / (decrease) may not be the same as similar measures provided by other companies due to potential differences in methods of calculation or differences in which items are incorporated into these adjustments.
- Adjusted EPS is defined as diluted earnings per share that excludes or has otherwise been adjusted for significant items that are nonrecurring or unusual. The income tax effect on non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.
- Adjusted ETR is defined as the effective tax rate that excludes or that has otherwise been adjusted for significant items that are nonrecurring or unusual.
- Adjusted EPS and adjusted ETR are supplemental information that management uses to help evaluate the company's historical and prospective financial performance on a consistent basis over time. Management believes that by adjusting for certain items affecting comparability of performance over time, such as the pension settlement charge, incremental costs, net of insurance recoveries, related to the cyberattack, asset impairments, charges related to the streamlined operating model, charges related to the digital capabilities and productivity enhancements investment, significant losses/(gains) related to acquisitions / divestitures and other nonrecurring or unusual items, investors and management are able to gain additional insight into the company's underlying operating performance on a consistent basis over time. However, adjusted EPS and adjusted ETR may not be the same as similar measures provided by other companies due to potential differences in methods of calculation or differences in which items are incorporated into these adjustments.
- Adjusted EBIT represents earnings (losses) before income taxes excluding interest income, interest expense and other significant items that are nonrecurring or unusual (such as the pension settlement charge, incremental costs, net of insurance recoveries, related to the cyberattack, asset impairments, charges related to the streamlined operating model, charges related to the digital capabilities and productivity enhancements investment, significant losses/(gains) related to acquisitions / divestitures and other nonrecurring or unusual items impacting comparability during the period. The company uses this measure to assess the operating results and performance of its segments, perform analytical comparisons, identify strategies to improve performance, and allocate resources to each segment. Management believes that the presentation of adjusted EBIT excluding these items is useful to investors to assess operating performance on a consistent basis by removing the impact of the items that management believes do not directly reflect the performance of each segment's underlying operations. However, adjusted EBIT may not be the same as similar measures provided by other companies due to potential differences in methods of calculation or differences in which items are incorporated into these adjustments.
- The reconciliation tables below refer to the equivalent GAAP measures adjusted as applicable for the following items:
Expected Divestiture of Better Health VMS Business
In the first quarter of fiscal year 2025, the company entered into a definitive agreement to sell its Better Health VMS business. As a result of this transaction, if completed, the company expects to record an after tax charge of
Due to the nature, scope and magnitude of this charge, the company's management believes presenting this charge as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period over period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.
Divestiture of Argentina Business
In the third quarter of fiscal year 2024, the company completed the divestiture of its
Due to the nature, scope and magnitude of these costs, the company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period over period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.
Pension Settlement Charge
In the second quarter of fiscal year 2024, the company settled plan benefits related to its domestic qualified pension plan through a combination of an annuity contract purchase with a third-party insurance provider and lump sum payouts. These payments were made using plan assets. In conjunction with this settlement, a one-time noncash charge of
Due to the nature, scope and magnitude of these costs, the company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period over period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.
Cyberattack
As previously disclosed, incremental costs were incurred by the company as the result of a cyberattack. These costs relate primarily to third-party consulting services, including IT recovery and forensic experts and other professional services incurred to investigate and remediate the attack, as well as incremental operating costs from the resulting disruption to the company's business operations.
In the fourth quarter of fiscal year 2024, the company recognized
Due to the nature, scope and magnitude of these costs, the company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period over period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.
Streamlined Operating Model
In the first quarter of fiscal year 2023, Clorox began recognizing costs related to a plan that involves streamlining its operating model to meet its objectives of driving growth and productivity. The streamlined operating model is expected to enhance the company's ability to respond more quickly to changing consumer behaviors and innovate faster. The implementation of this new model was completed in fiscal year 2024.
The company expects cost savings of approximately
Digital Capabilities and
As announced in
Of the total investment, approximately 70% is expected to represent incremental operating costs primarily recorded within selling and administrative expenses to be adjusted from reported EPS for purposes of disclosing adjusted EPS through fiscal year 2026. About 70% of these operating costs are expected to be related to the implementation of the ERP, with the remaining costs primarily related to the implementation of complementary technologies.
Due to the nature, scope and magnitude of this investment, these costs are considered by management to represent incremental transformational costs above the historical normal level of spending for information technology to support operations. Since these strategic investments, including incremental operating costs, will cease at the end of the investment period, are not expected to recur in the foreseeable future and are not considered representative of the company's underlying operating performance, the company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period-over-period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.
The following tables provide reconciliations of organic sales growth/(decrease) (non-GAAP) to net sales growth/(decrease), the most comparable GAAP measure:
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Three months ended |
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Percentage change versus the year-ago period |
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Health and |
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Household |
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Lifestyle |
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International |
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Total |
Net sales growth / (decrease) (GAAP) |
— % |
|
(10) % |
|
(2) % |
|
(11) % |
|
(6) % |
Add: Foreign Exchange |
— |
|
— |
|
— |
|
1 |
|
1 |
Add/(Subtract): Divestitures/Acquisitions (2) |
— |
|
— |
|
— |
|
15 |
|
2 |
Organic sales growth / (decrease) (non-GAAP) |
— % |
|
(10) % |
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(2) % |
|
5 % |
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(3) % |
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Twelve months ended |
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Percentage change versus the year-ago period |
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Health and |
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Household |
|
Lifestyle |
|
International |
|
Total |
Net sales growth / (decrease) (GAAP) |
(2) % |
|
(7) % |
|
(5) % |
|
(2) % |
|
(4) % |
Add: Foreign Exchange |
— |
|
— |
|
— |
|
21 |
|
3 |
Add/(Subtract): Divestitures/Acquisitions (2) |
— |
|
— |
|
— |
|
4 |
|
1 |
Organic sales growth / (decrease) (non-GAAP) |
(2) % |
|
(7) % |
|
(5) % |
|
23 % |
|
— % |
(1) |
Total company includes Corporate and Other. |
(2) |
The |
The following tables provide reconciliations of adjusted diluted earnings per share (non-GAAP) to diluted earnings per share, the most comparable GAAP measure, and adjusted effective tax rate (non-GAAP) to effective tax rate, the most comparable GAAP measure:
Adjusted Diluted Earnings Per Share (EPS) and Adjusted Effective Tax Rate (ETR) |
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(Dollars in millions except per share data) |
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Diluted earnings per share |
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Effective tax rate |
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Three months ended |
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Three months ended |
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% Change |
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As reported (GAAP) |
|
$ 1.73 |
|
$ 1.42 |
|
22 % |
|
19.7 % |
|
23.8 % |
|
|
Cyberattack costs, net of insurance recoveries (1) |
|
(0.17) |
|
— |
|
|
|
(0.3) % |
|
— % |
|
|
Streamlined operating model (2) |
|
0.12 |
|
0.09 |
|
|
|
0.2 % |
|
0.1 % |
|
|
Digital capabilities and productivity enhancements |
|
0.14 |
|
0.16 |
|
|
|
0.3 % |
|
0.1 % |
|
|
As adjusted (Non-GAAP) |
|
$ 1.82 |
|
$ 1.67 |
|
9 % |
|
19.9 % |
|
24.0 % |
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Diluted earnings per share |
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Effective tax rate |
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Twelve months ended |
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Twelve months ended |
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% Change |
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As reported (GAAP) |
|
$ 2.25 |
|
$ 1.20 |
|
88 % |
|
26.5 % |
|
32.4 % |
|
|
Loss on divestiture (4) |
|
1.85 |
|
— |
|
|
|
(8.6) % |
|
— % |
|
|
Pension settlement charge (5) |
|
1.04 |
|
— |
|
|
|
0.9 % |
|
— % |
|
|
Cyberattack costs, net of insurance recoveries (1) |
|
0.17 |
|
— |
|
|
|
0.2 % |
|
— % |
|
|
VMS impairment (6) |
|
— |
|
2.91 |
|
|
|
— % |
|
(8.9) % |
|
|
Streamlined operating model (2) |
|
0.20 |
|
0.37 |
|
|
|
0.2 % |
|
— % |
|
|
Digital capabilities and productivity enhancements |
|
0.66 |
|
0.61 |
|
|
|
0.9 % |
|
0.1 % |
|
|
As adjusted (Non-GAAP) |
|
$ 6.17 |
|
$ 5.09 |
|
21 % |
|
20.1 % |
|
23.6 % |
(1) |
During the three months ended Jun. 30, 2024, the company recognized approximately |
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(2) |
During the three and twelve months ended |
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(3) |
During the three and twelve months ended |
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Three months ended |
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Twelve months ended |
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External consulting fees (a) |
|
$ 15 |
|
$ 21 |
|
$ 80 |
|
$ 79 |
|
|
|
IT project personnel costs (b) |
|
2 |
|
2 |
|
8 |
|
6 |
|
|
|
Other (c) |
|
6 |
|
4 |
|
20 |
|
15 |
|
|
|
Total |
|
$ 23 |
|
$ 27 |
|
$ 108 |
|
$ 100 |
|
|
(a) |
Comprised of third-party consulting fees incurred to assist in the project management and the preliminary project stage of this transformative investment. The company relies on consultants for certain capabilities required for these programs that the company does not maintain internally. These costs support the implementation of these programs incremental to the company's normal IT costs and will not be incurred following implementation. |
(b) |
Comprised of labor costs associated with internal IT project management teams that are utilized to oversee the new system implementations. Given the magnitude and transformative nature of the implementations planned, the necessary project management costs are incremental to the historical levels of spend and will no longer be incurred subsequent to implementation. As a result of this long-term strategic investment, the company considers these costs not reflective of the ongoing costs to operate its business. |
(c) |
Comprised of various other expenses associated with the company's new system implementations, including company personnel dedicated to the project that have been backfilled with either permanent or temporary resources in positions that are considered part of normal operating expenses. |
(4) |
During the twelve months ended Jun. 30, 2024, the company incurred approximately |
(5) |
During the twelve months ended Jun. 30, 2024, the company incurred approximately |
(6) |
During the twelve months ended Jun. 30, 2023, a noncash impairment charge for goodwill and trademarks was recorded for |
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Full year 2025 outlook (estimated range) |
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||||
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Diluted earnings per share |
|
Effective tax rate |
|
|
||
|
|
|
Low |
|
High |
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Midpoint |
|
|
As estimated (GAAP) |
|
$ 4.95 |
|
$ 5.20 |
|
28 % |
|
|
|
Expected loss on divestiture (7) |
|
1.00 |
|
1.00 |
|
(4) % |
|
|
|
Digital capabilities and productivity enhancements investment (8) |
|
0.60 |
|
0.60 |
|
— |
|
|
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As adjusted (Non-GAAP) |
|
$ 6.55 |
|
$ 6.80 |
|
24 % |
|
|
(7) |
In fiscal year 2025, the company expects to incur approximately |
(8) |
In fiscal year 2025, the company expects to incur approximately |
The following tables provide reconciliations of adjusted EBIT (non-GAAP) to earnings (losses) before income taxes, the most comparable GAAP measure:
|
Reconciliation of earnings (losses) before income taxes to |
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Three months ended |
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Twelve months ended |
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Earnings (losses) before income taxes |
$ 275 |
|
$ 237 |
|
$ 398 |
|
$ 238 |
Interest income |
(2) |
|
(7) |
|
(23) |
|
(16) |
Interest expense |
21 |
|
21 |
|
90 |
|
90 |
Loss on divestiture |
— |
|
— |
|
240 |
|
— |
Pension settlement charge |
— |
|
— |
|
171 |
|
— |
Cyberattack costs, net of insurance recoveries |
(28) |
|
— |
|
29 |
|
— |
VMS impairment |
— |
|
— |
|
— |
|
445 |
Streamlined operating model |
19 |
|
16 |
|
32 |
|
60 |
Digital capabilities and productivity enhancements investment |
23 |
|
27 |
|
108 |
|
100 |
Adjusted EBIT |
$ 308 |
|
$ 294 |
|
$ 1,045 |
|
$ 917 |
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Condensed Consolidated Statements of Earnings |
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Dollars in millions, except per share data |
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|
|
|
|
|
||
|
|
|
Three months ended |
|
Twelve months ended |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
Net sales |
|
|
$ 1,903 |
|
$ 2,019 |
|
$ 7,093 |
|
$ 7,389 |
Cost of products sold |
|
|
1,019 |
|
1,157 |
|
4,045 |
|
4,481 |
Gross profit |
|
|
884 |
|
862 |
|
3,048 |
|
2,908 |
Selling and administrative expenses |
|
268 |
|
329 |
|
1,167 |
|
1,183 |
|
Advertising costs |
|
|
266 |
|
211 |
|
832 |
|
734 |
Research and development costs |
|
33 |
|
38 |
|
126 |
|
138 |
|
Loss on divestiture |
|
|
— |
|
— |
|
240 |
|
— |
Pension settlement charge |
|
|
— |
|
— |
|
171 |
|
— |
|
— |
|
— |
|
— |
|
445 |
||
Interest expense |
|
|
21 |
|
21 |
|
90 |
|
90 |
Other (income) expense, net |
|
21 |
|
26 |
|
24 |
|
80 |
|
Earnings before income taxes |
|
275 |
|
237 |
|
398 |
|
238 |
|
Income taxes |
|
|
54 |
|
56 |
|
106 |
|
77 |
Net earnings |
221 |
|
181 |
|
292 |
|
161 |
||
Less: Net earnings attributable to noncontrolling interests |
5 |
|
5 |
|
12 |
|
12 |
||
Net earnings attributable to Clorox |
|
$ 216 |
|
$ 176 |
|
$ 280 |
|
$ 149 |
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share attributable to Clorox |
|
|
|
|
|
|
|
|
|
Basic net earnings per share |
|
$ 1.74 |
|
$ 1.43 |
|
$ 2.26 |
|
$ 1.21 |
|
Diluted net earnings per share |
|
$ 1.73 |
|
$ 1.42 |
|
$ 2.25 |
|
$ 1.20 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding (in thousands) |
|
|
|
|
|
|
|
||
Basic |
|
124,300 |
|
123,823 |
|
124,174 |
|
123,589 |
|
Diluted |
|
125,052 |
|
124,641 |
|
124,804 |
|
124,181 |
Reportable Segment Information |
|
|
|
|
|
|
|
|
||||
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Dollars in millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
Net sales |
||||||||
|
|
Three months ended |
|
Twelve months ended |
||||||||
|
|
|
|
|
|
% Change(1) |
|
|
|
|
|
% Change(1) |
Health and Wellness |
|
$ 652 |
|
$ 651 |
|
— % |
|
$ 2,485 |
|
$ 2,532 |
|
(2) % |
Household |
|
597 |
|
663 |
|
(10) % |
|
1,950 |
|
2,098 |
|
(7) % |
Lifestyle |
|
328 |
|
333 |
|
(2) % |
|
1,275 |
|
1,338 |
|
(5) % |
International |
|
271 |
|
305 |
|
(11) % |
|
1,162 |
|
1,181 |
|
(2) % |
Reportable segment total |
|
$ 1,848 |
|
$ 1,952 |
|
|
|
$ 6,872 |
|
$ 7,149 |
|
|
Corporate and Other (2) |
|
55 |
|
67 |
|
(18) % |
|
221 |
|
240 |
|
(8) % |
Total |
|
$ 1,903 |
|
$ 2,019 |
|
(6) % |
|
$ 7,093 |
|
$ 7,389 |
|
(4) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment adjusted EBIT |
|
Segment adjusted EBIT |
||||||||
|
|
Three months ended |
|
Twelve months ended |
||||||||
|
|
|
|
|
|
% Change(1) |
|
|
|
|
|
% Change(1) |
Health and Wellness |
|
$ 202 |
|
$ 176 |
|
15 % |
|
$ 719 |
|
$ 594 |
|
21 % |
Household |
|
98 |
|
143 |
|
(31) % |
|
260 |
|
308 |
|
(16) % |
Lifestyle |
|
61 |
|
67 |
|
(9) % |
|
253 |
|
284 |
|
(11) % |
International |
|
18 |
|
15 |
|
20 % |
|
122 |
|
89 |
|
37 % |
Reportable segment total |
|
$ 379 |
|
$ 401 |
|
|
|
$ 1,354 |
|
$ 1,275 |
|
|
Corporate and Other (2) |
|
(71) |
|
(107) |
|
34 % |
|
(309) |
|
(358) |
|
14 % |
Total |
|
$ 308 |
|
$ 294 |
|
5 % |
|
$ 1,045 |
|
$ 917 |
|
14 % |
Interest income |
|
2 |
|
7 |
|
|
|
23 |
|
16 |
|
|
Interest expense |
|
(21) |
|
(21) |
|
|
|
(90) |
|
(90) |
|
|
Loss on divestiture (3) |
|
— |
|
— |
|
|
|
(240) |
|
— |
|
|
Pension settlement (4) |
|
— |
|
— |
|
|
|
(171) |
|
— |
|
|
Cyberattack costs, net of insurance recoveries (5) |
|
28 |
|
— |
|
|
|
(29) |
|
— |
|
|
VMS impairment (6) |
|
— |
|
— |
|
|
|
— |
|
(445) |
|
|
Streamlined operating model (7) |
|
(19) |
|
(16) |
|
|
|
(32) |
|
(60) |
|
|
Digital capabilities and productivity enhancements |
|
(23) |
|
(27) |
|
|
|
(108) |
|
(100) |
|
|
Earnings (losses) before income taxes |
|
$ 275 |
|
$ 237 |
|
16 % |
|
$ 398 |
|
$ 238 |
|
67 % |
(1) |
Percentages based on rounded numbers. |
(2) |
Corporate and Other includes the Vitamin, Minerals and Supplements business. |
(3) |
Represents the loss on divestiture of |
(4) |
Represents the pension settlement charge of |
(5) |
Represents insurance recoveries related to the cyberattack, net of costs incurred of $28 ( |
(6) |
Represents a |
(7) |
Represents restructuring and related costs, net for implementation of the streamlined operating model of |
(8) |
Represents expenses related to the company's digital capabilities and productivity enhancements investment of |
Condensed Consolidated Balance Sheets |
|
|
|
|
||||
Dollars in millions |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
202 |
|
$ |
367 |
|
|
Receivables, net |
|
|
695 |
|
|
688 |
|
|
Inventories, net |
|
|
637 |
|
|
696 |
|
|
Prepaid expenses and other current assets |
|
|
88 |
|
|
77 |
|
|
|
Total current assets |
|
|
1,622 |
|
|
1,828 |
Property, plant and equipment, net |
|
|
1,315 |
|
|
1,345 |
||
Operating lease right-of-use assets |
|
|
360 |
|
|
346 |
||
|
|
|
1,228 |
|
|
1,252 |
||
Trademarks, net |
|
|
538 |
|
|
543 |
||
Other intangible assets, net |
|
|
143 |
|
|
169 |
||
Other assets |
|
|
545 |
|
|
462 |
||
Total assets |
|
$ |
5,751 |
|
$ |
5,945 |
||
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
||
|
Notes and loans payable |
|
$ |
4 |
|
$ |
50 |
|
|
Current operating lease liabilities |
|
|
84 |
|
|
87 |
|
|
Accounts payable and accrued liabilities |
|
|
1,486 |
|
|
1,659 |
|
|
Income taxes payable |
|
|
— |
|
|
121 |
|
|
|
Total current liabilities |
|
|
1,574 |
|
|
1,917 |
Long-term debt |
|
|
2,481 |
|
|
2,477 |
||
Long-term operating lease liabilities |
|
|
334 |
|
|
310 |
||
Other liabilities |
|
|
848 |
|
|
825 |
||
Deferred income taxes |
|
|
22 |
|
|
28 |
||
|
|
Total liabilities |
|
|
5,259 |
|
|
5,557 |
Commitments and contingencies |
|
|
|
|
|
|
||
Stockholders' equity |
|
|
|
|
|
|
||
Preferred stock |
|
|
— |
|
|
— |
||
Common stock |
|
|
131 |
|
|
131 |
||
Additional paid-in capital |
|
|
1,288 |
|
|
1,245 |
||
Retained earnings |
|
|
250 |
|
|
583 |
||
|
|
|
(1,186) |
|
|
(1,246) |
||
Accumulated other comprehensive net (loss) income |
|
|
(155) |
|
|
(493) |
||
|
|
Total Clorox stockholders' equity |
|
|
328 |
|
|
220 |
Noncontrolling interests |
|
|
164 |
|
|
168 |
||
Total stockholders' equity |
|
|
492 |
|
|
388 |
||
Total liabilities and stockholders' equity |
|
$ |
5,751 |
|
$ |
5,945 |
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SOURCE