Clorox's Pricing & Cost-Saving Efforts Bode Well: Apt to Hold the Stock

Zacks12-03

The Clorox Company CLX has been gaining from pricing and cost-saving initiatives, which have been boosting the gross margins for a while. The company’s efforts to expand its international foothold ...

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The company’s efforts to expand its international foothold ...</p>\n\n<a href=\"https://finance.yahoo.com/news/cloroxs-pricing-cost-saving-efforts-181200899.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4533","symbol_name":"AQR资本管理(全球第二大对冲基金)","start_time":0,"source_url":"https://finance.yahoo.com/news/cloroxs-pricing-cost-saving-efforts-181200899.html","article_id":"2488995449","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/pCm8tCYaZmgTy.8hyyHrtg--~B/aD00MDA7dz02MzU7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/zacks.com/a63923f5c7f3298c792b4fcf7902e4e8"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2488995449","pubTimestamp":1733163120,"columns":[],"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"The Clorox Company CLX has been gaining from pricing and cost-saving initiatives, which have been boosting the gross margins for a while. The company’s efforts to expand its international foothold also bode well.In addition, the company has been strengthening its competitive advantage, accelerating profitable growth and preparing for long-term success, while also recovering from the cyber-attack seen earlier in the year. It has fully restored its distribution capabilities and reclaimed the majority of lost market share. 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The company’s efforts to expand its international foothold also bode well.In addition, the company has been strengthening its competitive advantage, accelerating profitable growth and preparing for long-term success, while also recovering from the cyber-attack seen earlier in the year. It has fully restored its distribution capabilities and reclaimed the majority of lost market share. This recovery was driven by a revitalized supply chain and robust merchandising efforts across its portfolio.\nLet’s Analyze CLX Stock Further\nClorox’s pricing and cost-saving initiatives have been bolstering margins. CLX delivered the eighth consecutive quarter of gross margin expansion in first-quarter fiscal 2025, backed by substantial cost savings and a comprehensive margin-management program. The company has been on track with its streamlined operating model, which aims to improve efficiency. This led to a gross margin expansion of 740 basis points year over year in the reported quarter. Additionally, the company remains on track to fully restore the gross margin by fiscal 2025.The company is quite focused on advancing its transformation to become strong and resilient. Clorox divested its Better Health Vitamins, Minerals and Supplements VMS business in the reported quarter. This divestiture aligns with its strategy to concentrate on its core areas, potentially unlocking further value for shareholders. This highlights an important step in the evolution of its portfolio, supporting CLX’s target to lower volatility and boost profitable growth. The company is progressing well as it completed and restored overall market share, increased share across the majority of its categories and delivered results above expectations during the reported quarter. Clorox is focused on value creation in the long run. CLX’s holistic margin-management efforts have been boosting growth and it is on track to revert to pre-pandemic gross margins in fiscal 2025 while investing in the business. Hence, the company concentrates on offering superior value to consumers by investing in its brands and making innovations. Management continues to explore international opportunities. Excluding the divestiture of the Argentina business and the impacts of adverse currency rates, the international segment’s organic sales rose 11% in first-quarter fiscal 2025, supported by 11 points of volume growth. Segment-adjusted EBIT rose 3% due to volume growth, excluding the Argentina business, partly offset by increased advertising spending. Going forward, this segment is likely to continue performing well and boost the company’s overall results.Clorox is on track with the IGNITE strategy, which mainly focuses on the expansion of the key elements under the 2020 Strategy to pace up innovation in each area of business. The IGNITE strategy encompasses the long-term financial targets of achieving net sales growth in the range of 2-4%, EBIT margin expansion of 25-50 basis points and free cash flow generation of 11-13% of sales. Management announced a streamlined operating model to create a faster, simpler company through the Reimagine Work under its IGNITE strategy. This new structure is expected to generate ongoing annual cost savings of approximately $100 million, significantly enhancing operational efficiency.\nHindrance to Clorox’s Growth\nClorox has been accelerating investments to enhance digital capabilities. In first-quarter fiscal 2025, advertising expenses rose 21.8% year over year to $201 million. For fiscal 2025, advertising and sales promotion spending is projected to be 11-11.5% of net sales, driven by CLX’s continued commitment to brand investment.Selling and administrative expenses are forecast between 15% and 16% of net sales, indicating a 150-basis point impact of strategic investments in digital capabilities and productivity enhancements. Of the total investment in digital capabilities, the company will record 70% as incremental operating costs within selling and administrative expenses.Management highlighted that the company has been witnessing an uncertain macro landscape, where consumers remain under pressure. Clorox expects fiscal 2025 net sales to be flat to decrease 2% from the prior year’s actual.\nConclusion\nClorox has been taking initiative to tackle challenges. Shares of this consumer products leader have gained 29.6%, outperforming the industry’s 9.3% growth.\nImage Source: Zacks Investment Research\nThe Zacks Consensus Estimate for fiscal 2025 earnings per share (EPS) is currently pegged at $6.85, which indicates growth of 11% year over year. The consensus estimate for fiscal 2026 sales and EPS is presently $7.23 billion and $7.17, which highlights an increase of 2.2% and 4.8%, respectively, year over year. CLX stock currently carries a Zacks Rank #3 (Hold).\nStocks to Consider\nFreshpet, Inc. FRPT, a pet food company, has a trailing four-quarter average earnings surprise of 144.5%. FRPT currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Freshpet’s current financial-year sales and EPS indicates growth of 27.3% and 224.3%, respectively, from the prior-year levels.Vital Farms VITL, which provides pasture-raised products, currently sports a Zacks Rank of 1. The consensus estimate for Vital Farms’ current financial-year sales and EPS indicates growth of 27.3% and 88.1%, respectively, from the prior-year levels.VITL has a trailing four-quarter average earnings surprise of 48.5%.Nomad Foods Limited NOMD, manufacturer and distributor of frozen foods, currently carries a Zacks Rank #2 (Buy). NOMD has a trailing four-quarter average earnings surprise of 1.2%.The Zacks Consensus Estimate for NOMD’s current financial-year EPS indicates growth of 5.8%, from the year-ago figure.\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nThe Clorox Company (CLX) : Free Stock Analysis Report\nFreshpet, Inc. (FRPT) : Free Stock Analysis Report\nNomad Foods Limited (NOMD) : Free Stock Analysis Report\nVital Farms, Inc. (VITL) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2488995449"}