uploads/2017/08/CLX-Segments-1.png

Analyzing Clorox’s Segment-Wise Sales in Fiscal 4Q17

By

Updated

Volume and pricing driving growth

Clorox (CLX) witnessed sales improvement across all of its business segments, driven by higher volumes and pricing. However, an unfavorable mix in the Cleaning and Household segment and increased trade promotions activities partially offset the positives.

In comparison, the company’s peers Colgate-Palmolive (CL) and Kimberly-Clark (KMB) witnessed volume declines during the last reported quarter. However, Procter & Gamble’s (PG) organic volumes improved due to higher shipments.

Article continues below advertisement

Cleaning segment’s volume driven by home care

Clorox’s Cleaning segment’s sales grew 2%, driven by a 4% rise in volumes and partially offset by an unfavorable mix and increased trade promotion spending. The division’s home care category witnessed strong volumes growth, driven by higher shipments of Clorox disinfecting wipes. The company’s newly launched Scentiva wipes and sprays drove much of this increase. 

In the professional products category, growth across cleaning products drove category growth. On the contrary, laundry volumes decreased, reflecting category softness.

Household segment contributed meaningfully

The Household segment’s sales improved 4%, driven by a 5% rise in volumes primarily from the RenewLife acquisition. Increases in cat litter and higher shipments of Glad premium trash bags supported the top-line growth. However, an unfavorable mix partially offset the growth.

Article continues below advertisement

Lifestyle benefited from favorable mix

Clorox’s Lifestyle segment’s volume decreased 1% YoY as lower shipments of KC Masterpiece barbecue sauces more than offset the growth in Burt’s Bees Natural Personal Care business. However, sales increased 2% despite lower volumes due to the favorable mix and lower trade promotion spending.

Higher pricing drove growth in International segment

Clorox’s International segment’s volume increased 1% during the quarter as higher volumes in Asia and Europe were partially offset by lower shipments in some Latin American markets, especially Argentina. However, sales increased 5%, driven by higher pricing. Adverse currency movements partially offset this increase.

Advertisement

More From Market Realist