Baxia Markets News

Clorox suffers biggest loss in 21 years

Written by Baxia Markets | Aug 4, 2021 7:00:00 AM

Clorox Co. stock plunged the most in more than two decades after forecasting a decline in sales. Chief Executive Officer Linda Rendle took an all-in gamble that the maker of disinfecting wipes and bleach would hang on to the pandemic-driven customers it picked up over the last year.

The company, which also sells Glad trash bags and Kingsford charcoal, posted sales of $1.8 billion in its fiscal fourth quarter, below the lowest analyst estimate. Clorox expects organic sales to decline by 2% to 6% in the current fiscal year, with uncertain consumer demand central to the desired performance.

On Tuesday, the stock fell 10% and was down as much as 12% earlier, the most significant drop since 2000. The shares had already declined 10% in 2021 through Monday’s close.

 



The company said falling sales were due primarily to the deceleration of shipments from peak levels during the Covid-19 pandemic and a faster than expected slowdown in the health and wellness segment, including cleaning products. That slowdown is also caused by a surge in costs for freight and raw materials.

Clorox reported sales decreases in all but one segment. The most significant decline was 17% at the health and wellness unit. Household products, which include trash bags, charcoal, and cat litter, also fell by 8%, with the company citing “moderating consumer demand.” In the lifestyle segment, which includes Hidden Valley salad dressing and Brita water filters, revenue dropped 3% on the same trend.

 

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