Clorox’s Fiscal 3Q16 Revenue and Organic Sales Benefit from Volume



Fiscal 3Q16 rise in revenue

As we discussed earlier, Clorox’s (CLX) reported revenue increased by 1.8% to $1.43 billion in fiscal 3Q16. The revenue increased as the benefits of pricing and volume growth across all business segments were partially offset by unfavorable foreign exchange. However, on a currency-neutral basis, the company’s sales grew by 5% in fiscal 3Q16.

In fiscal 3Q16, Clorox beat the consensus Wall Street analyst estimates on revenue after missing these estimates during the previous quarter. The consensus had projected revenue of $1.41 billion.

Article continues below advertisement

Reasons for increase

The increase in revenue on a currency-neutral basis was driven by a 4% increase in volume growth, reflecting gains in Home Care, Charcoal, and Natural Personal Care and partially offset by decreases in Cat Litter and Laundry. In the coming parts of this series, we will cover the highlights of Clorox’s business performance by segment.

Organic sales versus peers

Clorox’s fiscal 3Q16 organic growth also increased to 5.1% compared to 4.6% in fiscal 3Q15. Similarly, for Kimberly-Clark (KMB), organic sales grew by 2% in 1Q16 and grew by 3.6% for fiscal 2015 for Church & Dwight (CHD). Colgate-Palmolive’s (CL) organic sales grew by 5% in 1Q16, benefiting from pricing and unit volume increases.

Procter & Gamble’s (PG) fiscal 3Q16 organic sales grew by 1%, benefiting from pricing, which increased by 1%. To learn more about P&G’s fiscal 3Q16 revenue results, please read Why Procter & Gamble’s Fiscal 3Q16 Revenue Fell while Its Organic Sales Grew.

The US business improvement

Four out of Clorox’s eight US retail (XRT) business units increased their market share, with particularly strong gains in Home Care and Charcoal. In addition to market share improvement, the company is focusing on driving improved category trends.

During fiscal 3Q16, Clorox’s US business categories improved significantly by 2.5 points. This represents the growth of greater than 2 points for the fifth consecutive quarter for the US categories.

CLX comprises 0.8% of the First Trust Consumer Staples AlphaDEX ETF (FXG).[1. Updated on May 31, 2016]


More From Market Realist