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Clorox Company’s Top and Bottom Lines Rose in 2016

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Price movement

The Clorox Company (CLX) rose by 0.88% to close at $132.22 per share during the first week of August 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.88%, -3.3%, and 6.2%, respectively, as of August 5.

CLX is trading 1.3% below its 20-day moving average, 0.50% below its 50-day moving average, and 4.1% above its 200-day moving average.

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Related ETF and peers

The SPDR S&P Dividend ETF (SDY) invests 1.1% of its holdings in Clorox. The ETF tracks a yield-weighted index of 50 dividend-paying companies from the S&P 1500 Composite Index that have increased their dividends for at least 20 consecutive years. The YTD price movement of SDY was 17.7% on August 5.

The market caps of Clorox’s competitors are as follows:

  • Procter & Gamble Company (PG) — $230.2 billion
  • Colgate-Palmolive (CL) — $66.6 billion
  • Church & Dwight Company (CHD) — $13.0 billion

Performance of Clorox in fiscals 4Q16 and 2016

Clorox reported fiscal 4Q16 net sales of $1.60 billion, a rise of 2.8% compared to net sales of $1.56 billion in fiscal 4Q15. Sales of its Cleaning, Household, and Lifestyle segments rose by 6.0%, 5.0%, and 3.7%, respectively, and sales of its International segment fell by 8.6% in fiscal 4Q16 compared to fiscal 4Q15. The company’s gross profit margin fell by 0.36% in fiscal 4Q16, compared to the prior year’s period.

Its net income and EPS (earnings per share) fell to $165.0 million and $1.26, respectively, in fiscal 4Q16, compared to $191.0 million and $1.46, respectively, in fiscal 4Q15.

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Fiscal 2016 results

In fiscal 2016, CLX reported net sales of $5.8 billion, a rise of 1.8% YoY (year-over-year). The company’s gross profit margin rose by 2.2% in fiscal 2016.

Its net income and EPS rose to $648.0 million and $4.92, respectively, in fiscal 2016, compared to $580.0 million and $4.37, respectively, in fiscal 2015. It reported non-GAAP (generally accepted accounting principles) EBITDA (earnings before interest, tax, depreciation, and amortization) of $1.2 billion in fiscal 2016, a rise of 3.8% YoY.

Clorox’s cash and cash equivalents and inventories rose by 5.0% and 15.1%, respectively, in fiscal 2016. Its current ratio fell to 0.95x in fiscal 2016 compared to 1.0x in fiscal 2015. It reported non-GAAP free cash flow of $596.0 million in fiscal 2016, a fall of 18.7% YoY.

Projections

The company has made the following projections for fiscal 2017:

  • sales growth in the range of 2%–4%, or 4%–6% after excluding the 2% impact of unfavorable foreign currency exchange rates
  • EPS in the range of $5.38–$5.58, including the benefit of about $0.25–$0.30 from its adoption of Accounting Standards Update 2016-09
  • EBIT (earnings before interest and tax) margin expansion in the range of 0.25%–0.50%
  • effective tax rate in the range of 30%–31%

Clorox’s key appointments

Benno Dorer, Clorox’s CEO, has been appointed as the chair of the company’s board of directors. Pamela Thomas-Graham has been appointed as the independent lead director of the board. Allan D. David Mackay has been appointed to the Clorox board of directors.

Now let’s look at Carlisle Companies’ dividend.

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