Why Clorox stock fell on Wednesday
Management lowered its fiscal year outlook.
clorox (160 -5.57%) Investors were in the red Wednesday morning. While consumer staples stocks fell 6% in morning trading. S&P 500 It only decreased by 0.3%. This decline has added to difficult times for shareholders. Clorox is down 16% over the past year compared to a 20% surge for the overall market.
Wednesday’s early decline came after management updated its 2024 outlook following another slump in sales.
sales have decreased
Clorox said in its premarket earnings report that sales declined in its fiscal third quarter ending in March, largely due to a cyberattack that disrupted its distribution network. Sales were down 5% and organic sales were up 2%. These metrics increased by 16% and 20% respectively in the previous quarter.
While Wall Street focused on this growth shift, management sought to highlight the company’s earnings improvement. Gross profit margins were higher as Clorox made progress on cost-cutting projects. These wins resulted in a 13% increase in adjusted earnings despite higher manufacturing costs and lower sales volumes. “We have made significant progress on our long-term strategy to drive profitable growth,” CEO Linda Rendle said in her press release.
lowered expectations
Clorox cut some of its 2024 outlook, putting more pressure on the stock. Management sees sales reaching the lower end of the estimate range it updated in early February. Revenues will also grow slightly more slowly than originally planned due to weak fiscal third quarter results.
These updates don’t threaten Clorox’s rebounding growth picture, but they do suggest the company still faces demand headwinds, with organic sales up slightly in fiscal 2024. The good news is that investors can expect profit margins to rise this year. While we wait for signs of accelerated growth in the future.
