Sales growth in 2Q17
Clorox (CLX) delivered sales of $1.4 billion in fiscal 2Q17, which ended on December 31, 2016. The sales were in line with the consensus Wall Street analysts’ sales estimates.
On a year-over-year basis, Clorox’s sales rose 4.5% in fiscal 2Q17. That was better than the 3.8% rise in fiscal 1Q17 sales and flat sales in fiscal 2Q16.
Sales growth drivers
Clorox’s sales growth in fiscal 2Q17 reflected an 8.0% volume growth. It included about 2.0 percentage points of benefit from the ReNew Life acquisition. Clorox acquired ReNew Life, a leading brand in digestive health, in May 2016. Clorox’s fiscal 2Q17 sales also rose due to a 1.0 percentage point of benefit from increased pricing in the company’s International segment.
However, currency headwinds and an unfavorable mix negatively impacted the company’s fiscal 2Q17 sales by 2.0 percentage points and 1.0 percentage point, respectively.
Rival Procter & Gamble’s (PG) sales were flat in fiscal 2Q17. Higher volumes were offset by adverse currency fluctuations. Colgate-Palmolive (CL) reported a 4.6% fall in 4Q16 sales due to currency headwinds, the deconsolidation of its Venezuela business, and lower volumes.
Clorox now expects its sales to rise 3.0%–4.0% compared to previous expectations of 2.0%–4.0%. The company expects increased marketing and innovation to support sales growth in the second half of fiscal 2017.
We’ll look at the performances of Clorox’s segments in the next part of this series.