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Clorox (CLX) to Report Q3 Earnings: What's in the Offing?
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The Clorox Company (CLX - Free Report) is slated to report third-quarter fiscal 2020 results on May 1, before market open. In the last reported quarter, the Oakland, CA-based manufacturer and marketer of consumer products delivered a positive earnings surprise of 11.5%. Moreover, it delivered a positive earnings surprise of 3.6%, on average, over the trailing four quarters.
The Zacks Consensus Estimate for the company’s fiscal third-quarter earnings is pegged at $1.73, suggesting 20.1% growth from the year-ago reported figure. The consensus mark has moved up by 8.1% in the past seven days. For fiscal third-quarter revenues, the consensus mark is pegged at $1.71 billion, suggesting 10.5% growth from the prior-year reported figure.
Amid business disruptions caused by the coronavirus outbreak, Clorox has been witnessing burgeoning demand for its products. The rising coronavirus cases have given rise to the demand for hand sanitizers, disinfecting wipes, and other floor and house-cleaning products. Clorox’s facilities remain up and running since the beginning of the virus outbreak to supply essential cleaning products like bleaches, and floor and other disinfectants. In fact, the company has been witnessing robust demand for its disinfectants, which is expected to get reflected in the company’s third-quarter fiscal 2020 top-line number.
Further, Clorox has been progressing well with its IGNITE Strategy, which focuses on maximizing opportunities in core international business and concentrates on increasing the demand for more sustainable products such as new Clorox compostable cleaning wipes. It has also been concentrating on pricing and cost-containment efforts.
However, the company has been witnessing operational headwinds in the Grilling, and Bags and Wraps businesses, which have been hurting its Household segment, and in turn the top line for a while now. On its last earnings call, management predicted headwinds in the Grilling, and Bags and Wraps businesses to persist through the second half of fiscal 2020. It expects competitive price reductions and higher promotional activities to have continued hurting sales for the Bags and Wraps business in the fiscal third quarter.
We note that the Zacks Consensus Estimate for sales of the Household segment is pegged at $582 million, which indicates year-over-year growth of 19%. The consensus estimate for sales for the Cleaning segment stands at $660 million, suggesting growth of 29.9% mainly due to gains from the coronavirus outbreak-induced sales. The Zacks Consensus Estimate for the same of $238 million for the International segment indicates a decline of 2.9%, while that for the Lifestyle segment of $340 million suggests an improvement of 10% year over year.
Additionally, headwinds related to trade promotional spending, unfavorable mix, manufacturing and logistics expenses, and advertising and sales promotion spending cannot be ignored. These are expected to get reflected on quarterly margins and in turn the bottom line.
Zacks Model
Our proven model does not predict an earnings beat for Clorox this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although Clorox has a Zacks Rank #4 (Sell), an Earnings ESP of 0.00% makes surprise prediction difficult.
3 Stocks With a Favorable Combination
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Church & Dwight Co., Inc. (CHD - Free Report) currently has an Earnings ESP of +3.56% and a Zacks Rank #2.
Kellogg Company (K - Free Report) presently has an Earnings ESP of +3.23% and a Zacks Rank #3.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
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Clorox (CLX) to Report Q3 Earnings: What's in the Offing?
The Clorox Company (CLX - Free Report) is slated to report third-quarter fiscal 2020 results on May 1, before market open. In the last reported quarter, the Oakland, CA-based manufacturer and marketer of consumer products delivered a positive earnings surprise of 11.5%. Moreover, it delivered a positive earnings surprise of 3.6%, on average, over the trailing four quarters.
The Zacks Consensus Estimate for the company’s fiscal third-quarter earnings is pegged at $1.73, suggesting 20.1% growth from the year-ago reported figure. The consensus mark has moved up by 8.1% in the past seven days. For fiscal third-quarter revenues, the consensus mark is pegged at $1.71 billion, suggesting 10.5% growth from the prior-year reported figure.
The Clorox Company Price and EPS Surprise
The Clorox Company price-eps-surprise | The Clorox Company Quote
Key Factors to Note
Amid business disruptions caused by the coronavirus outbreak, Clorox has been witnessing burgeoning demand for its products. The rising coronavirus cases have given rise to the demand for hand sanitizers, disinfecting wipes, and other floor and house-cleaning products. Clorox’s facilities remain up and running since the beginning of the virus outbreak to supply essential cleaning products like bleaches, and floor and other disinfectants. In fact, the company has been witnessing robust demand for its disinfectants, which is expected to get reflected in the company’s third-quarter fiscal 2020 top-line number.
Further, Clorox has been progressing well with its IGNITE Strategy, which focuses on maximizing opportunities in core international business and concentrates on increasing the demand for more sustainable products such as new Clorox compostable cleaning wipes. It has also been concentrating on pricing and cost-containment efforts.
However, the company has been witnessing operational headwinds in the Grilling, and Bags and Wraps businesses, which have been hurting its Household segment, and in turn the top line for a while now. On its last earnings call, management predicted headwinds in the Grilling, and Bags and Wraps businesses to persist through the second half of fiscal 2020. It expects competitive price reductions and higher promotional activities to have continued hurting sales for the Bags and Wraps business in the fiscal third quarter.
We note that the Zacks Consensus Estimate for sales of the Household segment is pegged at $582 million, which indicates year-over-year growth of 19%. The consensus estimate for sales for the Cleaning segment stands at $660 million, suggesting growth of 29.9% mainly due to gains from the coronavirus outbreak-induced sales. The Zacks Consensus Estimate for the same of $238 million for the International segment indicates a decline of 2.9%, while that for the Lifestyle segment of $340 million suggests an improvement of 10% year over year.
Additionally, headwinds related to trade promotional spending, unfavorable mix, manufacturing and logistics expenses, and advertising and sales promotion spending cannot be ignored. These are expected to get reflected on quarterly margins and in turn the bottom line.
Zacks Model
Our proven model does not predict an earnings beat for Clorox this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although Clorox has a Zacks Rank #4 (Sell), an Earnings ESP of 0.00% makes surprise prediction difficult.
3 Stocks With a Favorable Combination
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
The Hain Celestial Group, Inc. (HAIN - Free Report) has an Earnings ESP of +9.24% and it sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Church & Dwight Co., Inc. (CHD - Free Report) currently has an Earnings ESP of +3.56% and a Zacks Rank #2.
Kellogg Company (K - Free Report) presently has an Earnings ESP of +3.23% and a Zacks Rank #3.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>