By Dhirendra Tripathi
Investing.com – Clorox (NYSE:CLX) stock plummeted 11% in Tuesday’s premarket trading as inflation and weaker demand for cleaning products dented its fourth-quarter sales and profits.
The company was a major beneficiary of the pandemic-induced scare as well as urge among the consumers to stock up on anything they thought would keep germs and viruses away. Cleaning of surfaces several times during the day became the norm. Sales of cleaning agents, disinfectants and sanitizers boomed then.
The elevated demand came off in the June quarter as vaccinations gathered pace, the scare weakened, and people stepped out to lead normal lives.
The maker of bleaches and stain removers has projected 2022 sales to be down 2% to 6% from last year's comparatively high first half, when the pandemic raged.
The company also warned of higher commodity and manufacturing and logistics costs, most notably in transportation, hurting its margins.
Adjusted EPS is projected to be between $5.40 and $5.70, a decrease of between 26% and 21%, respectively.
Fourth-quarter net sales fell 9% from a year ago to $1.8 billion. Adjusted earnings per share fell to less than one-third of last time’s, coming at 78 cents compared to $2.41 in June quarter of 2020.
While sales fell, cost of raw materials rose as chemicals and additives got more expensive. As a percentage of net sales, cost of products grew to 63% compared to 53% for last year’s quarter.