DOW JONES NEWSWIRES
Clorox Co.'s (CLX) fiscal second-quarter net income slipped 6.5%
amid falling volume as consumers and retailers curbed spending,
leading the consumer-products maker to lower its sales outlook for
the year.
Consumer-products companies, which generally hold up better than
makers of discretionary products, have been pressured by so-called
pantry de-stocking, as consumers use the products they already have
before purchasing more, as well as inroads from less-expensive
private-label, or store brands.
For the quarter ended Dec. 31, the maker of Brita water filters,
Hidden Valley salad dressing and Glad trash bags reported net
income of $86 million, or 62 cents a share, compared with $92
million, or 65 cents a share, a year earlier.
Revenue increased 2.5% to $1.22 billion. The newly acquired
Burt's Bees business added 3 percentage points to revenue, while
the stronger dollar pared results by 3 percentage points and
exiting from a private-label food bags business shaved 1 percentage
point.
Analysts polled by Thomson Reuters expected earnings of 57 cents
on revenue of $1.24 billion.
Gross margin edged down to 40% from 40.4% amid higher commodity,
manufacturing and transportation costs, though cost savings and
price increases provided some benefit.
For 2009, Clorox reiterated its lowered October earnings
forecast, but cut its sales forecast by one percentage point,
forecasting growth of 3% to 5% amid retailer inventory reductions
and curtailed consumer spending.
During the quarter, volume fell 1% as retailers reduced
inventory. Clorox's North American sales were up 3% despite a 2%
decline in volume, while earnings rose 6%. The volume decline
stemmed from lower shipments of auto-care products, partially
offset by increased shipments of Burt's Bees, Clorox disinfecting
wipes and Hidden Valley salad dressing.
International sales were flat as volume grew 4%, driven by
shipments of laundry and homecare products in Latin America.
Earnings dropped 24%. Clorox shares were up 1.6% at $52.63 in
premarket trading. The stock is down 20% since September.
-By Shirleen Dorman, Dow Jones Newswires; 201-938-2310;
shirleen.dorman@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front
page of today's most important business and market news, analysis
and commentary. You can use this link on the day this article is
published and the following day.