Clorox ( NYSE: CLX ) shares sank in Wednesday’s extended trading after management offered a pessimistic forecast for the upcoming fiscal year.
For its fiscal fourth quarter, the Oakland-based consumer products manufacturer posted EPS in-line with estimates alongside a narrow miss on revenue. Gross margins were also flat year over year at 37.1% due to elevated commodity and freight costs that offset price increases. Gross margin decreased 780 basis points to 35.8% from 43.6% over the course of the fiscal year.
However, the company’s forecasts for full-year sales and profits were the key metric watching the market’s eye in after hours trading. The company set an outlook that anticipated net sales to be in a range of down 4% to up 2% compared to the prior year while sales are expected to be in a range of down 3% to up 3%.
Adjusted EPS is also expected to decline in the 2023 fiscal year to between $3.85 and $4.22, marking a decrease of 6% to an increase of 3%, respectively. More optimistically, gross margins are expected to expand by 200 basis points.
"Looking to fiscal year 2023, the environment remains difficult, with consumer behaviors adapting to ongoing inflation as well as continued normalization in our cleaning and disinfecting portfolio,” CEO Linda Rendle said. “We're addressing these challenges head-on while taking steps to keep our categories healthy and offer superior consumer value.”
Shares of the typically stable consumer staples name declined over 7% shortly after the print. Read more on the details of the results .
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Clorox stock slides on downbeat full-year forecast