Clorox’s Pandemic-Era Boom Fades as Virus Concerns Recede
, 2022-10-31 07:58:28,
(Bloomberg) — Clorox Co.’s bet that Americans would continue snapping up disinfectants after the pandemic faded hasn’t paid off so far — and it doesn’t look like it will.
The wipes and bleach maker is grappling with falling revenue and profit as consumption wanes and costs climb. Annual sales dropped 3% to $7.1 billion in the year through June from a year earlier, and analysts expect another decline in the fiscal year that ends mid-2023. Adjusted earnings per share will also dip in the period, according to estimates.
Companies in industries from e-commerce to cleaning were counting on consumer habits developed during lockdowns to stick, but now inflation is forcing Americans to scrutinize their budgets just as concerns over Covid-19 subside. Clorox, which reports quarterly earnings on Tuesday, is also dealing with high costs for materials and transportation. The Oakland, California-based firm is restructuring its business, and people familiar with the matter say Clorox removed employees from some upper-level posts as it seeks savings.
“They were not alone in the view that consumers would be forever changed by the pandemic,” Barclays Plc analyst Lauren Lieberman said in an interview. “What was different was the degree to which Clorox thought it would be the case.”
The company’s shares have declined about 40% from their pandemic-fueled record high in August 2020, while the S&P 500 Consumer Staples Sector Index has risen 17% since then.
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