Clorox Exec Says No More Price Hikes, Layoffs Coming as It Lifts Annual Profit

Kevin Jacobsen (Cooper Financial Officer Clorox) stated on Thursday that the bleachmaker has stopped making it. Price It has plans for hikes through June and is preparing for more layoffs to help recover its margins after skyrocketing inflation.

Pine-Sol, a manufacturer of disinfectants and cleaning products, raised its annual adjusted profits forecast on Thursday after reporting a surprise increase in sales. Higher prices offset a slowdown that saw it report a decline in demand.

Jacobsen said to Reuters that the household staples producer has no plans for price hikes in the remaining fiscal year. Its fiscal year ends June. He said that the last price increase was in December.

“We think we’ve taken enough for now,” Jacobsen said.

Jacobsen stated that Clorox will be laying off more workers in the near future as it reduces its costs. Jacobsen declined to reveal the number of employees that would be fired. Jacobsen stated that the first phase took place in September and that more phases are being planned for the next fiscal year.

Clorox products were wiped off the shelves during the pandemic. Consumers rushed to protect their homes from infection and stockpiled wipes.

Demand has faltered, however, with product volumes decreasing in three of Clorox’s four business segments in the reported quarter.

Clorox reported a 1 percent increase in net sales to $1.72 billion despite the numerous price increases it implemented across a variety of products over the past two years.

Refinitiv IBES data shows that analysts were expecting an average of 2 percent decrease to $1.66 Billion.

Even as Clorox grappled with higher raw material costs and manufacturing expenses, the price increases helped its gross margin expand by 320 basis points to 36.2 percent in the three months ended Dec. 31. Jacobsen stated that gross margin has been declining or flat in the previous seven quarters.

“It’s an inflection point for us,” He said.

Clorox, an Oakland company, said that it expects adjusted earnings of between $4.05 to $4.30 per share in fiscal 2023. This is a change from its previous outlook range, which was $3.85 up to $4.22 per shares.

Jacobsen stated that consumers are purchasing smaller quantities of Clorox products in stores like Walmart to reduce the cost of their shopping trips. Executives at Fresh Step have stated that the company behind Liquid Plumr clog removal and Fresh Step cat litter targets low-income customers earning less than $50,000 per annum.

Clorox also tightened its forecast for full-year sales to between a 2 percent drop and a 1 percent rise, compared to a 4 percent decrease to a 2 percent increase estimated previously.

By Jessica DiNapoli, Deborah Mary Sophia

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