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Clorox: An Investor’s Must-Know Business Overview

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Understanding Clorox’s history

The Clorox Company (CLX) is a leading multinational consumer staples (XLP) company. It’s a leading manufacturer and marketer of consumer and professional products, including Pine-Sol, Liquid Plumr, Hidden Valley, and Glad.

Clorox was founded in Oakland, California, in 1913 and was incorporated in Delaware. The company was initially called the Electro-Alkaline Company. In 1928, it went public on the San Francisco stock exchange and changed its name to the Clorox Chemical Company.

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Operating segments

Clorox operates in four reportable segments:

  1. Cleaning
  2. Household
  3. Lifestyle
  4. International

Revenue and market cap

Clorox’s total revenue for fiscal 2015[1. year ended June 30, 2015] came in at $5.7 billion with an operating profit of $1.0 billion. The company’s market cap of $15.6 billion is lower than the market cap for peers Colgate-Palmolive (CL) at $57.9 billion and Kimberly-Clark (KMB) at $42.6 billion.

Peers Procter & Gamble (PG) and Unilever (UL) have market caps much higher than Clorox’s, at $201.2 billion and $127.8 billion, respectively.

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Geographic presence

Clorox manufactures products in more than a dozen countries and markets these products in more than 100 countries. More than 80% of the company’s sales are generated from brands that hold number-one or number-two market share positions in their categories.

According to Euromonitor International, Clorox’s bleach products such as Clorox and Clorox 2 are leading brands of bleach in Hungary, with a 43% share of retail value sales in 2014.

Sales and EPS growth

In fiscal 2015, Clorox delivered strong results, including 3% net sales growth and a 4% increase in diluted EPS (earnings per share) from continuing operations. This was despite a difficult environment, particularly in international markets with unfavorable foreign exchange rates and slowing economies.

Clorox has exposure in the PowerShares DWA Consumer Staples Momentum ETF (PSL) with 2.7%[2. All market cap figures and ETF weights are updated as of November 16, 2015] of the total weight of the portfolio.

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