Clorox shares slide 5.9% premarket as it swings to loss and sales miss estimates

Clorox Co. shares fell 5.9% in premarket trade Friday, after the maker of household cleaning products and other goods swung to a loss in its fiscal third quarter as it booked a pretax noncash impairment charge relating to goodwill, trademarks and other assets in its Better Health Vitamins, Minerals and Supplements business. Sales were also below consensus and its guidance was soft.
The company swung to a loss of $61 million, or 49 cents a share, in the quarter to March 31, after earnings of $241 million, or $1.89 a share, in the year-earlier period. Excluding the impairment charge, the company had adjusted EPS of $1.62, ahead of the $1.48 FactSet consensus. Sales edged down to $1.781 billion from $1.783 billion, below the $1.858 billion FactSet consensus. The company’s gross margin shrank by 320 basis points as a result of higher manufacturing and logistics costs along with increased commodity costs. Sales at its health and wellness division fell 8%, while sales of household bags, grilling and cat litter rose 6%. Sales of lifestyle goods such as food, water filtration and personal care were flat, and international sales rose 9%. The company is now expecting fiscal 2021 adjusted EPS of $7.45 to $7.65, compared with a FactSet consensus of $8.37. Shares are down 8% year to date, while the S&P 500 has gained 12%.

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