Clorox CEO Linda Rendle told CNBC on Wednesday the company’s products are “household essentials” that can withstand rising inflationary environments and tough economic times.
The company’s brands include its namesake Clorox products as well as Brita water filtration, Glad bags and Burt’s Bees to highlight a few.
As an example of Clorox’s pricing power, Rendle referenced another round of price increases set for July to help offset higher costs and “recover margins over time.”
The CEO told Jim Cramer on “Mad Money” that Clorox brands offer superior value for things people need to use every day, even in recessions. In 2008, during the financial crisis, “our categories were very resilient, and we grew the vast majority of our brands,” she explained.
There’s concern the Federal Reserve’s aggressive moves to stamp out inflation might slow economic growth and cause a recession. The Fed increased interest rates by another 50 basis points Wednesday.
Clorox reported a decidedly mixed quarter after the closing bell Monday. The stock opened lower Tuesday but closed up 3%. It added another 1.4% on Wednesday.
- The consumer packaged goods powerhouse late Monday reported fiscal third-quarter adjusted earnings of $1.31 per share, which beat estimates but dropped 19% from the year-ago period.
- Net sales increased 2% to a slightly better-than-expected $1.81 billion. Gross margin was crushed.
- The company shaved 20 cents off its full-year earnings forecast, while maintaining a projected net sales decline of between 1% to 4% for the year.
“For the first part of our fiscal year, we were lapping 27% sales growth in the year-ago period. But this quarter, as we lapped a more normalized environment, we were able to put on organic growth in three out of our four segments, the vast majority of our businesses,” Rendle said. “In addition to that, we were able to grow market share.”
Rendle said that cleaning habits that grew out of the Covid pandemic are sticky even as many aspects of life have been returning to more normalized routines. The company has leaned into the trend, launching packaging solutions so people can “control the environment around them” and take the products on the go, she said, noting that Clorox is a “much larger business” than it was pre-pandemic.