Yahoo Finance Factors Likely to Support Clorox's (CLX) Earnings Beat in Q2
The Clorox Company CLX is likely to register top-line growth when it reports second-quarter fiscal 2023 earnings on Feb 2. The company is likely to register a top-line decline when it reports the quarterly results.
The Zacks Consensus Estimate for quarterly revenues is pegged at $1,665 million, suggesting a decline of 1.5% from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for quarterly earnings has moved up by a penny in the past seven days to 66 cents per share. The consensus mark indicates flat earnings from the figure reported in the prior-year quarter.
We expect the company’s fiscal second-quarter net sales to decline 2.5% year over year to $1,647.5 million and the bottom line to dip 7.1% to 61 cents per share.
The consumer and professional products company has a trailing four-quarter earnings surprise of 11.2%, on average. CLX delivered an earnings surprise of 27.4% in the last reported quarter.
The Clorox Company Price and EPS Surprise
The Clorox Company price-eps-surprise | The Clorox Company Quote
Factors to Note
Clorox has been gaining from solid demand for its products and brands, cost-saving efforts, and strong execution and pricing actions. Its IGNITE strategy and digital investments also bode well. This is likely to have aided the top and bottom lines in second-quarter fiscal 2023.
The company has been witnessing continued strength in the core International business as it has been building on the success of the segment's Go Lean strategy. Driven by its IGNITE strategy, which aims to improve profitability in the International business, the company has been investing selectively in profitable platforms. These efforts are expected to have accelerated profitable growth for the segment in the to-be-reported quarter.
Management has been exploring international opportunities, including the acquisition of a majority stake in its joint venture in the Kingdom of Saudi Arabia. This is expected to have boosted the company’s organic sales performance in the to-be-reported quarter.
However, Clorox has been witnessing elevated manufacturing and logistic costs, and higher commodity costs. Input cost inflation, including commodities, transportation and wage inflation, has been hurting the company’s gross margin for a while now. Broad-based inflation across the supply chain is also expected to have dented the company’s quarterly performance.
Additionally, the company has been reporting higher SG&A expenses, attributable to investments in enhancing digital capabilities. On the last reported quarter’s earnings call, management expected SG&A expenses to remain elevated throughout fiscal 2023, driven by its strategic investments in digital capabilities and productivity enhancements. This is likely to get reflected in increased SG&A expenses in the to-be-reported quarter.
Also, the company anticipates advertising and sales promotion spending to be elevated in fiscal 2023, induced by its commitment to investing in its brand portfolio. This is expected to get reflected in higher advertising expenses in the fiscal second quarter.
What the Zacks Model Unveils
Our proven model conclusively predicts an earnings beat for Clorox this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Clorox has a Zacks Rank #2 and an Earnings ESP of +0.95%.
Other Stocks With Favorable Combination
Here are some other companies that you may want to consider, as our model shows that these also have the right combination of elements to deliver an earnings beat.
e.l.f. Beauty ELF has an Earnings ESP of +1.77% and it currently sports a Zacks Rank of 1. The company is likely to register top-line growth when it reports fourth-quarter 2022 results. The consensus mark for ELF’s quarterly revenues is pegged at $121.8 million, which suggests 24.2% growth from the figure reported in the prior-year quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for e.l.f. Beauty’s quarterly earnings has been unchanged in the past 30 days at 23 cents per share. The consensus estimate for ELF’s fourth-quarter earnings suggests a decline of 4.2% from the year-ago quarter’s reported figure. ELF has delivered an earnings beat of 92.8%, on average, in the trailing four quarters.
Hershey HSY currently has an Earnings ESP of +0.32% and a Zacks Rank of 2. The company is expected to register top and bottom-line growth when it reports the fourth-quarter 2022 numbers. The Zacks Consensus Estimate for HSY’s quarterly revenues is pegged at $2.6 billion, which suggests growth of 10.9% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for Hershey’s quarterly earnings has been unchanged in the past 30 days at $1.78 per share. The consensus estimate for HSY suggests 5.3% growth from the year-ago reported number. HSY has delivered an earnings beat of 8.9%, on average, in the trailing four quarters.
Altria Group MO currently has an Earnings ESP of +0.14% and a Zacks Rank #3. MO is likely to register top and bottom-line growth when it reports the fourth-quarter 2022 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $5.2 billion, which suggests growth of 1.5% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Altria's quarterly earnings has moved up by a penny in the past 30 days to $1.18 per share, suggesting growth of 8.3% from the year-ago quarter’s reported number. MO has delivered an earnings beat of 0.3%, on average, in the trailing four quarters.
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Hershey Company (The) (HSY) : Free Stock Analysis Report
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e.l.f. Beauty (ELF) : Free Stock Analysis Report
