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Here’s Why Clorox Is Outperforming Peers

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Part 4
Here’s Why Clorox Is Outperforming Peers PART 4 OF 6

Clorox Beat Peers on EPS Growth

Factors that drove Clorox’s EPS growth

The Clorox Company (CLX) has reported healthy EPS growth in the past three quarters, and the trend is expected to continue in fiscal 2018. Moreover, the company handily exceeded analysts’ estimates in the last three quarters. During the last reported quarter, Clorox posted stellar EPS growth, which came in better than what peers have reported.

Clorox’s fiscal 4Q17 EPS rose 21.4% YoY (year-over-year) thanks to the increased sales and higher cost and productivity savings. In comparison, most of its peers relied on cost reduction measures to drive bottom-line growth amid weak sales.

Clorox Beat Peers on EPS Growth

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Peers underperformed Clorox

In comparison, Procter and Gamble (PG) reported a 7.6% YoY increase in its bottom line during the last reported quarter (or fiscal 4Q17). The company’s EPS benefitted from cost cutting and productivity measures. However, soft sales, increased input costs, and higher competition continue to dent the company’s bottom-line results.

Meanwhile, Colgate-Palmolive’s (CL) 2Q17 EPS rose 2.9% YoY as price increases and cost reductions more than offset the adverse impact of sales deleverage and higher raw material costs.

On the contrary, Kimberly-Clark (KMB) and Church & Dwight (CHD) reported a YoY decline in their bottom line during the last reported quarter. Kimberly-Clark’s EPS fell 2.6% YoY on lower sales and higher commodity costs. Meanwhile, Church & Dwight’s bottom line was affected by the planned increase in promotional spending.

Clorox’s EPS outlook remains strong

Clorox’s EPS is likely to witness healthy growth in fiscal 2018 as incremental sales on the back of innovation-driven products, higher pricing, and increased cost savings are projected to supplement the company’s bottom-line growth rate. However, currency headwinds, inflation in commodity costs, and an expected increase in manufacturing and logistics expenses will continue to remain a drag.

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