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Clorox Slides on Loss, Revenue Miss, Slashed Forecast

Clorox swings to a third-quarter loss, following the year-earlier 'unprecedented growth.'
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Clorox  (CLX) - Get Clorox Company (The) Report shares fell Friday after the household-supplies icon missed Wall Street's third-quarter revenue forecast and cut its full-year earnings guidance.

The move comes as sales fall from last year's "unprecedented growth" brought on by the COVID-19 pandemic.

Shares of the Oakland, Calif., company at last check were off 4.1% at $178.40.

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Clorox reported a loss of $61 million, or 49 cents a share, compared with earnings of $241 million, or $1.89 a share, a year earlier. The latest adjusted earnings came to $1.62, down 14% from a year earlier but surpassing the FactSet consensus of $1.48 a share.

The company said the latest results reflect a $329 million impairment charge related to goodwill, trademarks and other assets in the Better Health vitamins, minerals and supplements business.

Sales were about flat at $1.78 billion, missing FactSet's $1.86 billion forecast.

Clorox noted that health-and-wellness sales decreased 8% in the quarter, mainly due to lower shipments of cleaning and disinfecting products in both the retail and professional channels.

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That compared with "unprecedented growth in the year-ago period as well as supply constraints for some key products," Clorox said.

"As expected, we delivered flat sales in the third quarter compared to 15% growth in the year-ago quarter," Chief Executive Linda Rendle said in a statement. 

"What's important is that we're on track to deliver our best full-year top-line growth in more than 20 years."

Looking ahead, Clorox said it expected full-year adjusted earnings to range $7.45 to $7.65 a share, while FactSet's survey calls for earnings of $8.37 a share.

Gross margin is now expected to narrow, reflecting mainly higher commodity and manufacturing and logistics costs.

Last month, D.A. Davidson analyst Linda Bolton Weiser downgraded Clorox to neutral from buy and lowered her price target on the stock to $189 from $234.

Weiser wrote that there was a risk that Clorox “could fail to raise and might even lower its guidance” when it reported fiscal third-quarter results

Last August, Reuters reported that Americans were buying so many Clorox disinfecting wipes that store shelves wouldn't have the product fully stocked until this year.

In November, Clorox posted stronger-than-expected first-quarter earnings and boosted its full-year profit outlook due to the surge in cleaning product sales brought on by the pandemic.