Clorox Reports 27% Net Sales Growth, Significant Earnings Increase in Q3 2024

The Clorox Company reported significant financial growth for the three months ended September 30, 2024, with net sales reaching $1,762 million, a 27% increase from $1,386 million in the same period of 2023. This growth was driven by strong performance across all segments, particularly in Health and Wellness, Household, and Lifestyle, which saw net sales increases of 38%, 38%, and 40%, respectively. Gross profit also rose substantially to $807 million, up 52% from $532 million year-over-year, resulting in a gross margin improvement to 45.8%, compared to 38.4% in the prior year.

Earnings before income taxes for the quarter were $177 million, a significant increase from $29 million in the previous year. Net earnings attributable to Clorox were $99 million, compared to $22 million in the same period last year, leading to a basic net earnings per share of $0.80, up from $0.17. Comprehensive income for the quarter was reported at $111 million, compared to $24 million in the prior year.

The company completed the divestiture of its Better Health Vitamins, Minerals, and Supplements (VMS) business on September 10, 2024, which resulted in an after-tax loss of $118 million. This strategic move is aimed at reducing volatility and enhancing sales growth and margins. The divestiture follows the earlier sale of its Argentina business in March 2024.

Clorox's total current assets decreased to $1,576 million from $1,622 million as of June 30, 2024, while total assets fell to $5,497 million from $5,751 million. Total liabilities increased slightly to $5,273 million. The company reported net cash provided by operations of $221 million, a substantial rise from $20 million in the same period last year, attributed to higher cash earnings and lower incentive compensation payments.

The company faced challenges from a cyberattack identified in August 2023, which had previously disrupted operations and negatively impacted sales and earnings. However, insurance recoveries related to this incident amounted to $10 million for the current quarter, with no significant future costs expected.

Clorox continues to navigate a volatile operating environment, influenced by macroeconomic conditions, including elevated interest rates and geopolitical instability. The company is focused on investing in its brands and capabilities to achieve consistent, profitable growth while implementing a new streamlined operating model that is expected to generate cost savings moving forward.