"Our strategy continues to drive profitable growth, with strong sales increases in all our U.S. businesses and margin expansion in each of our business segments, including International," said Chief Executive Officer
All results in this press release are reported on a continuing operations basis, unless otherwise stated. As previously announced, Corporación
Fiscal First-Quarter Results
Following is a summary of key first-quarter results. All comparisons are with the first quarter of fiscal year 2015, unless otherwise stated.
* 3% volume growth
* 3% sales growth
In the first quarter, Clorox delivered earnings from continuing operations of
In the first quarter, total company sales grew 3 percent, reflecting increases across all U.S. businesses, driven by strong volume growth and the benefit of price increases. First-quarter sales results also reflect 3 percentage points of unfavorable foreign currency exchange rates and higher trade promotion spending. Volume for the first quarter increased 3 percent.
The company's first-quarter gross margin increased 220 basis points to 45 percent from 42.8 percent in the year-ago quarter, driven primarily by the benefits of cost savings; higher sales, which reflect strong volume growth and price increases; and favorable commodity costs. These factors were partially offset by higher manufacturing and logistics costs.
"Continued productivity gains and robust cost savings drove another quarter of significant margin expansion," said Chief Financial Officer
First-quarter net cash provided by continuing operations was
In the first quarter, the company repurchased about 1 million shares of its common stock at a cost of about
Key Segment Results
Following is a summary of key first-quarter results from continuing operations by reportable segment. All comparisons are with the first quarter of fiscal year 2015, unless otherwise stated.
(Laundry, Home Care, Professional Products)
Segment volume growth was driven primarily by gains across a number of Home Care brands, including strong growth of Clorox® disinfecting wipes behind increased merchandising support for the back-to-school season. Importantly, innovation in wipes products, including Clorox® Micro Scrubbers, Clorox® ScrubSingles and Clorox® Triple Action Dust Wipes, contributed to category growth and market share gains. Professional Products also contributed to segment volume growth, with increases across a number of health care and cleaning brands. Sales outpaced volume primarily due to the benefit of the
(Bags and Wraps, Charcoal, Cat Litter)
Segment volume growth was driven primarily by gains in the Charcoal business, largely due to strong consumption and merchandising activity related to
(Dressings and Sauces, Water Filtration, Natural Personal Care)
Segment volume growth reflected increases across all businesses. In Dressings and Sauces, volume gains were driven primarily by higher shipments of bottled
(All sales outside of the U.S.)
Segment volume results reflect gains in
Clorox Confirms Fiscal Year 2016 Outlook
Clorox continues to anticipate delivering flat to 1 percent sales growth, which reflects about 3 points of incremental sales growth from product innovation for the fiscal year. The company's sales outlook also reflects expected moderation from slowing international economies as well as 3 percentage points of impact from unfavorable foreign currency exchange rates, of which more than half the impact reflects an anticipated significant devaluation of the Argentine peso. The company continues to anticipate fiscal year sales to be impacted by an increase in trade-promotion spending to drive the company's core business and trial of new products.
Clorox continues to anticipate EBIT margin expansion in the range of 25 to 50 basis points, primarily driven by normalized levels of performance-based incentive costs, the benefit of cost savings, some benefit from price increases and slightly lower commodity costs. The company continues to anticipate these factors to be partially offset by a greater impact from unfavorable foreign currency exchange rates and continued high inflation affecting manufacturing and logistics costs. Fiscal year EBIT margin is also expected to be impacted by incremental investments in demand building programs and the company's cost savings pipeline to drive profitable growth.
Clorox continues to anticipate its effective fiscal year 2016 tax rate to be between 34 percent and 35 percent.
Net of all these factors, Clorox continues to anticipate fiscal year 2016 diluted EPS from continuing operations in the range of
"Looking forward, we'll stay the course with our 2020 Strategy, as we face the global challenges of worsening foreign currencies and slowing international economies," Dorer said. "In addition, we anticipate further pressure from competitors in the second half of the fiscal year as they respond to our market share gains. Notwithstanding these challenges, we have a healthy core business and we remain committed to driving growth profitably."
For More Detailed Financial Information
Note: Percentage and basis-point changes noted in this press release are calculated based on rounded numbers. Supplemental materials are available in the Investors: Financial Reporting: Financial Results section of the company's website at TheCloroxCompany.com.
Clorox is a signatory of the United Nations Global Compact, a community of global leaders committed to sustainability. The company has been broadly recognized for its corporate responsibility efforts, including, most recently, two U.S. EPA Climate Leadership Awards for Excellence in Greenhouse Gas Management and inclusion among the top 40 companies on the 2015
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such forward-looking statements involve risks and uncertainties. Except for historical information, statements about future volumes, sales, foreign currencies, costs, cost savings, margins, earnings, earnings per share, diluted earnings per share, foreign currency exchange rates, cash flows, plans, objectives, expectations, growth, or profitability, are forward-looking statements based on management's estimates, assumptions and projections. Words such as "could," "may," "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," and variations on such words, and similar expressions that reflect our current views with respect
to future events and financial performance, are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed. Important factors that could affect performance and cause results to differ materially from management's expectations are described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Annual Report on Form 10-K for the fiscal year ended
The company's forward-looking statements in this press release are based on management's current views and assumptions regarding future events and speak only as of their dates. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.
Non-GAAP Financial Information
This press release contains non-GAAP financial information relating to sales growth, diluted EPS, EBIT and EBIT margin. The company has included reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP. See the end of this press release for these reconciliations.
The company disclosed these non-GAAP financial measures to supplement its consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures exclude certain items that are included in the company's results reported in accordance with GAAP, including income taxes, interest income, interest expense and foreign exchange impact. The exclusion of foreign exchange impact is also referred to as currency-neutral. Management believes these non-GAAP financial measures provide useful additional information to investors about trends in the company's operations and are useful for period-over-period comparisons as they show currency-neutral sales comparisons and the company uses such financial measures in its budgeting process and as factors in determining compensation. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read in connection with the company's consolidated financial statements presented in accordance with GAAP.
For recent presentations made by company management and other investor materials, visit Investor Events on the company's website.
|Condensed Consolidated Statement of Earnings (Unaudited)|
|Dollars in millions, except share amounts|
|Three Months Ended|
|Cost of products sold||765||774|
|Selling and administrative expenses||186||180|
|Research and development costs||30||30|
|Other (income) expense, net||(1||)||3|
|Earnings from continuing operations before income taxes||264||218|
|Income taxes on continuing operations||91||73|
|Earnings from continuing operations||173||145|
|Losses from discontinued operations, net of tax||(1||)||(55||)|
|Net earnings (losses) per share|
|Basic net earnings per share||$||1.33||$||0.70|
|Diluted net earnings per share||$||1.31||$||0.68|
|Weighted average shares outstanding (in thousands)|
|Reportable Segment Information|
|Dollars in millions|
|Net sales||Earnings (losses) from continuing operations before income taxes|
|Three Months Ended||Three Months Ended|
||% Change (1)||
||% Change (1)|
|(1) Percentages based on rounded numbers.|
|Condensed Consolidated Balance Sheet|
|Dollars in millions|
|Cash and cash equivalents||$||383||$||382||$||355|
|Other current assets||147||143||144|
|Total current assets||1,410||1,429||1,351|
|Property, plant and equipment, net||885||918||947|
|Other intangible assets, net||49||50||60|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Notes and loans payable||$||131||$||95||$||53|
|Current maturities of long-term debt||300||300||575|
|Income taxes payable||37||31||42|
|Total current liabilities||1,351||1,405||1,533|
|Deferred income taxes||88||95||90|
|Commitments and contingencies|
|Additional paid-in capital||790||775||702|
|Accumulated other comprehensive net loss||(541||)||(502||)||(416||)|
|Total liabilities and stockholders' equity||$||4,095||$||4,164||$||4,150|
The tables below present the reconciliation of non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP and other supplemental information. See "Non-GAAP Financial Information" above for further information regarding the company's use of non-GAAP financial measures.
The reconciliations below are on a continuing operations basis
First-Quarter Sales Growth Reconciliation
|Q1 Fiscal 2016||Q1 Fiscal 2015|
|Total Sales Growth (GAAP)||2.8%||0.6%|
|Less: Foreign exchange||-2.8%||-1.9%|
|Currency-Neutral Sales Growth (Non-GAAP)||5.6%||2.5%|
The reconciliations below for fiscal year 2015 are provided as a reference point for the fiscal year 2016 outlook.
Fiscal Year EBIT Margin(1) Reconciliation
Dollars in millions
|Earnings from continuing operations||
|before income taxes (GAAP)|
|EBIT (1) (non-GAAP)||
|EBIT margin(1) (non-GAAP)||18.0%|
(1) EBIT represents earnings from continuing operations before interest and taxes. EBIT margin is the ratio of EBIT to net sales.
For Gross Margin Drivers, please refer to the Supplemental Information: Gross Margin Driver page in the Financial Results section of the company's website TheCloroxCompany.com .
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