Clorox (CLX) to Report Q2 Earnings: What's in the Offing?

The Clorox Company CLX is expected to report a year-over-year decline in its top and bottom lines when it releases second-quarter fiscal 2022 results on Feb 3, after market close.

The Zacks Consensus Estimate for earnings in the fiscal second quarter is pegged at 78 cents, which suggests a plunge of 61.6% from the prior-year quarter’s reported figure. The consensus estimate for quarterly earnings has moved down 2.5% in the past 30 days. The consensus mark for quarterly revenues is pegged at $1.66 billion, implying a decline of 9.9% from the prior-year quarter’s reported number.

In the last reported quarter, the consumer product manufacturer delivered an earnings surprise of 19.8%. It has a trailing four-quarter earnings surprise of 5.3%, on average.

The Clorox Company Price and EPS Surprise

The Clorox Company Price and EPS Surprise

The Clorox Company price-eps-surprise | The Clorox Company Quote

Key Factors to Note

Clorox has been witnessing a sluggish top-line performance mainly due to reduced shipments and an unfavorable price mix. Higher manufacturing and logistics costs across all categories, and increased commodity costs are expected to have been concerning. The aforesaid expenses coupled with higher advertising and sales promotion investments are anticipated to have hurt the bottom line in the fiscal second quarter. The higher spending mainly relates to increased brand investments to support its innovation pipeline and customer engagement efforts.

On its last reported quarter’s earnings call, management expected sales to normalize toward the lower end of its long-term sales growth target of 3-5%. It anticipated consumer demand to be the largest factor to drive sales trends throughout fiscal 2022, which is likely to be uncertain.

However, Clorox’s fiscal second-quarter performance is expected to have witnessed continued gains from the execution of the IGNITE strategy, which mainly focuses on the expansion of the key elements to pace up innovation in every area of its business.

The company has been on track with its cost-saving and productivity initiatives. Management noted that fiscal 2022 started on an encouraging note on the back of strategic initiatives, including pricing actions, cost-reduction efforts, increased focus on building supply-chain resiliency and enhanced productivity.

Backed by the IGNITE strategy, Clorox has been aiming for higher cost savings annually by emphasizing technology and integrated design. Strength in the core International business on the success of the segment's Go Lean strategy is also expected to have aided the company.

What the Zacks Model Predicts

Our proven model does not conclusively predict an earnings beat for Clorox this season. 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.

Clorox currently has a Zacks Rank #3 and an Earnings ESP of -4.49%.

Stocks With Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Hershey HSY currently has an Earnings ESP of +0.90% and a Zacks Rank #3. The company is expected to register top and bottom-line growth when it reports the fourth-quarter 2021 numbers. The Zacks Consensus Estimate for HSY’s quarterly revenues is pegged at $8.9 billion, which suggests growth of 9.2% from the prior-year quarter’s reported figure.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Hershey’s quarterly earnings has moved up 1.2% in the past 30 days to $1.63 per share, suggesting 9.4% growth from the year-ago reported number. HSY has delivered an earnings beat of 4.4%, on average, in the trailing four quarters.

Beyond Meat BYND currently has an Earnings ESP of +0.69% and a Zacks Rank #3. BYND is likely to register top-line growth when it reports the fourth-quarter 2021 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $103.9 million, which suggests growth of 2% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Beyond Meat’s quarterly bottom line has been unchanged in the past 30 days at a loss of 73 cents per share. However, the consensus estimate suggests a decline of 114.7% from the prior-year quarter. BYND has delivered a negative earnings surprise of 77.3%, on average, in the trailing four quarters.

Coty COTY currently has an Earnings ESP of +37.14% and a Zacks Rank #3. COTY is anticipated to register top-line growth when it reports the fourth-quarter 2021 results. The Zacks Consensus Estimate for Coty’s quarterly revenues is pegged at $1.61 billion, indicating an improvement of 13.8% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Coty’s bottom line has been unchanged in the past 30 days at 12 cents per share. However, the consensus estimate suggests a decline of 29.4% from the prior-year quarter. COTY has delivered an earnings beat of 66.4%, on average, in the trailing four quarters.

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