Clorox’s share has risen 14.3% YTD
The stock prices of consumer products companies have been witnessing a strong uptrend in calendar 2017, supported by healthy sales growth, which has been driven by a rise in volumes, innovation, cost savings, and effective marketing techniques. In particular, Clorox (CLX) stock has risen 14.3% on a YTD (year-to-date) basis as of March 22, and the stock has risen about 9.6% since it announced its strong fiscal 2Q17 (ended December 31, 2016) results on Feb 3.
As the chart above shows, Clorox has outperformed the S&P 500 (SPX) and the iShares US Consumer Goods ETF (IYK) on a YTD (year-to-date) basis. In fact, if we look at the stock price trend of the company’s peers, the story is no different.
For instance, shares of Kimberly-Clark (KMB), Church & Dwight (CHD), Colgate-Palmolive (CL), and Procter & Gamble (PG) have all generated superior returns, with their share prices rising 16.4%, 13.8%, 12.6%, and 8.2% respectively, since the start of 2017.
What sets Clorox apart?
Aside from the uptrend in stock prices—and when we compare performances from the last reported quarter—CLX looks better than its peers. Despite the macro headwinds, Clorox’s sales rose 4.5% in fiscal 2Q17, driven by an 8% rise in volumes. The company also looks to be on track to deliver strong results in second half of the year, on the back of strong sales and volume growth.
Clorox plans to continue to invest in innovation to drive category growth, coupled with enhanced marketing to create a strong brand image and drive demand. Productivity savings and price increases in key markets are likely to bolster Clorox’s margins.
By comparison, Kimberly-Clark’s top line remained more or less flat in 4Q16. Organic sales for the company inched up 1%, with a 2% growth in volumes. On the other side, Church & Dwight reported a 2.6% rise in sales in 4Q16. Organic sales growth for the company came in at 2.7%, with a 3.2% rise in volumes.
The company’s bigger rival, Procter & Gamble, marked a 2% rise in fiscal 2Q17 organic sales, coupled with a 2% rise in volume. However, total sales of the company remained flat YoY (year-over-year) with a 1% rise in volume. Another big name, Colgate-Palmolive (CL) witnessed a 4.5% fall in 4Q16 sales, with a 5.5% decline in volume.
In this series, we’ll focus on Clorox’s recent performance and the strategic initiatives that are fueling growth. The series will also discuss the company’s dividend history, valuation, analyst recommendations, and outlook.
Continue to the next part for a closer look at Clorox’s recent sales performance.