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Jim Cramer: Clorox Is a Buy

It's time to pull the trigger on Clorox after disappointing guidance sends the stock lower Monday, Jim Cramer says.

Clorox beating earnings expectations on Monday due to a surge in cleaning product sales triggered by the global coronavirus pandemic.

Clorox said earnings for the three months ending in June, the group's fiscal fourth quarter, were pegged at $2.41 per share, a 28.1% increase from the same period last year and firmly ahead of the Street consensus forecast of $1.99 per share. Group revenues, Clorox said, rose 22% to $1.983 billion and again beat analysts' forecast of a $1.875 billion tally.

Sales from Clorox's Heath and Wellness division, which includes cleaning and professional products as well as vitamins and supplements, rose 33% to $805 million, the company said, around double the gains seen in the group's household and lifestyle units.

"I'm pleased that we've delivered a quarter of exceptional results, fueled by strong demand for our products that we've been privileged to provide in support of public health and to serve some of the essential needs of consumers as they've had to stay at home more," said CEO Benno Dorer. "These results could not have been possible without dedication and strong execution by our people, who have always been guided by our core value Do the Right Thing."

Looking into the group's 2021 fiscal year, Clorox said it sees a range mid-single digit decline to mid-single digit growth in diluted earnings, as well as a flat to low-single digit percentage growth rates for net sales.

Clorox also announced 17-year company veteran Linda Rendle will replace Dorer as CEO, with Dorer remaining in his chairman role. “With a healthy business, so much opportunity for continued good growth and a successor who is ready to lead this company, it's the right time for the board to appoint Linda as CEO," Dorer said in a press release.

Clorox stock took a slight hit in early trading Monday, falling around 2% to $231.40. Is this a buying opportunity? 

Jim Cramer says that Clorox is a buy.

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