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Clorox Delivers 3% Sales Growth for Quarter
Posted: August 1, 2013
The Clorox Company reported results for its fourth quarter and fiscal year 2013, which ended June 30. For the full fiscal year, the company delivered 3% sales growth, 80 basis points of gross margin expansion and $4.31 diluted earnings per share (EPS) from continuing operations. For the fourth quarter, the company reported a slight increase in sales, gross margin expansion of 130 basis points and $1.38 diluted EPS from continuing operations.
"Clorox people around the world delivered solid results this fiscal year," said chairman and CEO Don Knauss. "We grew sales in all four segments behind product innovation across multiple brands and delivered strong gross margin expansion."
Commenting on the company's fourth-quarter results, Knauss said, "In Q4 we delivered strong margin expansion and diluted EPS growth from continuing operations of 5%. Excluding the impact of foreign currencies, sales grew nearly 1.5% in the quarter. While sales results came in slightly lower than anticipated, I feel good about our plans to address the competitive pressures we're facing, including increased merchandising activity as well as product innovation scheduled to launch in fiscal year 2014."
Clorox reported fourth-quarter earnings of $184 million, or $1.38 diluted EPS. This compares with $174 million, or $1.32 diluted EPS, in the year-ago quarter, an increase of 5% diluted EPS. Current-quarter results reflect the benefit of strong cost savings and price increases, partially offset by higher manufacturing and logistics costs, including the impact of inflationary pressures, and unfavorable foreign currency exchange rates.
Volume for the fourth quarter decreased 3%, primarily driven by declines in the company's home care, charcoal and international businesses. Sales were up slightly, reflecting the benefit of price increases, favorable product mix and lower trade spending, largely offset by lower volume and unfavorable foreign currency exchange rates. Excluding the impact of foreign currency declines, sales grew nearly 1.5%.
For Clorox's lifestyle division, which includes natural beauty and personal care brands Burt's Bees and güd, volume in the segment was flat. Burt's Bees volume was flat due to a comparison to double-digit growth in the year-ago quarter behind the pipeline build of güd products. Retail consumption for Burt's Bees products was up double-digits in the quarter. Segment sales outpaced volume primarily driven by the benefit of prior-year price increases on Brita water filtration products. Pretax earnings declined primarily due to investments in systems and processes to support long-term growth for the Burt's Bees business.
Internationally, Clorox saw volume decrease primarily due to the exit from nonstrategic export businesses, and declines in Canada and Argentina. Segment sales decreased due to lower volume and declines in foreign currencies, partially offset by the benefit of favorable mix and price increases. Pretax earnings decreased primarily due to higher manufacturing and logistics costs, including inflationary pressures, and lower sales. These factors were partially offset by the benefit of cost savings. Volume for fiscal year 2013 was flat versus the year-ago period, reflecting gains in the professional products, food, Burt's Bees and home care businesses, offset by declines in the Charcoal, International and Brita businesses.