Valued at a market cap of $14.9 billion, The Clorox Company (CLX) manufactures and markets consumer and professional products. The Oakland, California-based company’s offerings span cleaning and disinfecting products, bags and wraps, grilling supplies, natural personal care, food dressings, and water-filtration systems.
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and Clorox fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the household & personal products industry. The company’s strengths lie in its diverse and well-recognized brand portfolio, including Clorox, Brita, Burt’s Bees, Glad, and Kingsford among others, with many of its products holding leading market shares in their categories. Its broad distribution network, spanning mass retailers, grocery chains, e-commerce platforms, and professional channels, ensures wide market reach both domestically and internationally.
This household & personal care products company has dipped 29.4% from its 52-week high of $171.37, reached on Dec. 6, 2024. Moreover, shares of CLX have declined 16.5% over the past three months, considerably lagging behind the Consumer Staples Select Sector SPDR Fund’s (XLP) marginal uptick during the same time frame.
In the longer term, CLX has fallen 12.8% over the past 52 weeks, underperforming XLP’s 3.4% rise over the same time frame. Moreover, on a YTD basis, shares of Clorox are down 25.5%, compared to XLP’s 2.3% return.
To confirm its bearish trend, CLX has been trading below its 200-day moving average since early February, with minor fluctuations, and has remained below its 50-day moving average since mid-December, 2024.
On May 5, Clorox released weaker-than-expected Q3 results, prompting its share price to fall 2.4% in the following trading session. A consumption slowdown across most of its reportable segments, along with the divestitures of its VMS and Argentina operations, led to an 8% year-over-year decline in its overall revenue to $1.7 billion, which fell short of the consensus estimates by 2.3%. Moreover, its adjusted EPS of $1.45 dropped 15.2% from the year-ago quarter and missed Wall Street expectations by 7.6%.
However, despite a challenging and volatile consumer and geopolitical environment, Clorox achieved a 240 basis-point expansion in gross margin, driven by cost-saving initiatives and benefits from divestitures. Moreover, its adjusted EBIT improved 2.3% from the same period last year to $266 million.
Looking ahead to fiscal 2025, CLX updated its outlook, now expecting net sales to be down 1% to flat, and adjusted EPS in the range of $6.95 to $7.35.
Clorox’s underperformance looks pronounced when compared to its rival, Kimberly-Clark Corporation (KMB), which declined 9.7% over the past 52 weeks and 2.4% on a YTD basis.
Looking at CLX’s recent underperformance, analysts remain cautious about its prospects. The stock has a consensus rating of "Hold” from the 18 analysts covering it, and the mean price target of $142.75 suggests an 18% premium to its current price levels.
