Clorox (NYSE:CLX) Misses Q1 Revenue Estimates

Jabin Bastian /
2024/04/30 4:22 pm EDT

Consumer products giant Clorox (NYSE:CLX) fell short of analysts' expectations in Q1 CY2024, with revenue down 5.3% year on year to $1.81 billion. It made a non-GAAP profit of $1.71 per share, improving from its profit of $1.51 per share in the same quarter last year.

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Clorox (CLX) Q1 CY2024 Highlights:

  • Revenue: $1.81 billion vs analyst estimates of $1.87 billion (3% miss)
  • EPS (non-GAAP): $1.71 vs analyst estimates of $1.38 (24% beat)
  • Full year 2024 organic revenue growth : lowered to the low end of the previous range, which was "down low single digit" percentages year on year
  • Full year 2024 EPS (non-GAAP) guidance: $5.88 at the midpoint (raised from previous) vs analyst estimates of $5.62 (4.5% beat)
  • Gross Margin (GAAP): 42.2%, up from 41.8% in the same quarter last year
  • Organic Revenue was up 2% year on year
  • Market Capitalization: $18.48 billion

"During the quarter, we made significant progress on our long-term strategies to drive profitable growth while also continuing to recover from the cyberattack. We executed well against our IGNITE strategy by evolving our portfolio with the divestiture of the Argentina business, launching innovation, investing in our brands, and delivering another quarter of gross margin expansion," said Chair and CEO Linda Rendle.

Founded in 1913 with bleach as the sole product offering, Clorox (NYSE:CLX) today is a consumer products giant whose product portfolio spans everything from bleach to skincare to salad dressing to kitty litter.

Household Products

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Sales Growth

Clorox is larger than most consumer staples companies and benefits from economies of scale, giving it an edge over its smaller competitors.

As you can see below, the company's revenue has declined over the last three years, dropping 1.4% annually. This is among the worst in the consumer staples industry, where demand is typically stable.

Clorox Total Revenue

This quarter, Clorox missed Wall Street's estimates and reported a rather uninspiring 5.3% year-on-year revenue decline, generating $1.81 billion in revenue. Looking ahead, Wall Street expects sales to grow 2.6% over the next 12 months, an acceleration from this quarter.

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Organic Revenue Growth

When analyzing revenue growth, we care most about organic revenue growth. This metric captures a business's performance excluding the impacts of foreign currency fluctuations and one-time events such as mergers, acquisitions, and divestitures.

The demand for Clorox's products has generally risen over the last two years but lagged behind the broader sector. On average, the company's organic sales have grown by 4% year on year.

Clorox Year-On-Year Organic Revenue Growth

In the latest quarter, Clorox's organic sales rose 2% year on year. By the company's standards, this growth was a meaningful deceleration from the 8% year-on-year increase it posted 12 months ago. We'll be watching Clorox closely to see if it can reaccelerate growth.

Key Takeaways from Clorox's Q1 Results

We enjoyed seeing Clorox exceed analysts' EPS expectations this quarter. We were also glad its full-year earnings guidance exceeded Wall Street's estimates. On the other hand, its organic revenue unfortunately missed analysts' expectations and its operating margin missed Wall Street's estimates. While EPS guidance was favorable as mentioned, the company actually lowered its full year organic revenue growth outlook. Overall, the results could have been better. The company is down 2.3% on the results and currently trades at $144.5 per share.

Clorox may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.