Clorox names new CEO, beats estimates on pandemic-led demand

Clorox said net sales rose to $1.98bln from $1.63bln in the fourth quarter ended June 30

  

Clorox Co on Monday named longtime executive Linda Rendle its new chief executive officer, and reported quarterly earnings that beat estimates as the COVID-19 pandemic had people rushing to buy its bleaches and disinfectants.

CEO Benno Dorer will step down next month, but continue to chair Clorox's board. Rendle, who is currently the company's president, has held several roles at Clorox over the past 17 years, including leading global operations for its cleaning business. Rendle will be one of two female CEOs in the consumer goods industry, the other being Hershey CEO Michele Buck.

"We think it was well anticipated that Ms. Rendle was next in line to lead the company, but think the timing of that change will have come sooner than expected, with Mr. Dorer 6 years into his role," Barclays analyst Lauren Lieberman said.

Companies that make hygiene products - from disinfecting wipes to hand soap - have seen a sustained boom in sales since the start of global lockdowns. Revenue rose by a third at Clorox's health and wellness division, which accounts for more than 40% of total sales and includes cleaning products and supplements.

The company said it expected flat to low-single-digit sales growth in fiscal 2021, and a mid-single-digit decline to mid-single-digit rise in profit. The low-end of both forecasts fall short of analyst estimates for fiscal full-year sales to increase 2.58% and profit to rise 5.74%, according to IBES data from Refinitiv.

"With Clorox trading at a 40% premium to large-cap peers, our sense is that the company’s outlook will be seen as something between conservative & disappointing," Lieberman said.

Excluding one-time items, Clorox earned $2.41 per share, beating Wall Street expectations of $1.99 per share. Clorox said net sales rose to $1.98 billion from $1.63 billion in the fourth quarter ended June 30, beating Wall Street expectations of $1.87 billion.

Clorox shares were flat in premarket trading.

(Reporting by Praveen Paramasivam in Bengaluru and Richa Naidu in Chicago; Editing by Vinay Dwivedi and Louise Heavens) ((Praveen.Paramasivam@thomsonreuters.com;))

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