Volume and pricing driving growth
The Clorox Company (CLX) witnessed increased sales in three of its four segments in fiscal 3Q17, driven by increased volumes and higher pricing. However, lower shipments and increased trade promotions continued to drag on its sales.
Cleaning segment remained strong
Clorox’s Cleaning segment marked a 13% rise in volumes in fiscal 3Q17, driven by strong shipments of its Clorox disinfecting wipes, expanded club-channel distribution, and incremental sales from its newly launched Scentiva wipes and sprays in the Home Care segment.
Meanwhile, its professional products also garnered increased volumes, driven by a rise in cleaning products sales. Its sales rose 7% as its strong volumes were partially offset by an unfavorable product mix.
Household segment contributed meaningfully
The Household segment’s volumes rose 9% due to Clorox’s RenewLife acquisition and increased shipments in cat litter, partially offset by lower shipments of charcoal due to adverse weather conditions.
The segment’s sales rose 4% during the quarter as higher volumes were partially offset by increased trade promotions to drive sales and an unfavorable product mix.
Lifestyle and International segments
Clorox’s Lifestyle segment witnessed a 1% fall in volumes on account of lower shipments of its water filtration and natural personal care products. Its sales fell ~3%, reflecting lower volumes and increased trade promotion activities.
Meanwhile, the company’s International segment’s volumes fell 2%, reflecting lower shipments in Latin American countries, especially Argentina, partially offset by volume gains in Canada. Despite a fall in volumes, the company’s sales rose 3% during the quarter on account of higher pricing, mainly in Argentina.
You can get indirect exposure to Clorox through the ProShares S&P 500 Dividend Aristocrats ETF (NOBL), which invests 2.0% of its portfolio in the company.
We’ll take a look at Clorox’s fiscal 3Q17 margins in the next part of this series.