By Jessica DiNapoli and Deborah Mary Sophia
(Reuters) – Clorox (NYSE:) Co on Thursday raised its forecast for annual adjusted profit after reporting a surprise rise in sales, as higher prices helped the bleach maker offset a slowdown in demand for its cleaning products and disinfectants.
Chief financial officer Kevin Jacobson said in an interview with Reuters that the household staples maker has no more price hikes planned for the rest of its fiscal year, ending in June.
“We think we’ve taken enough for now,” Jacobson said.
Jacobson added that Clorox is planning for more layoffs over the next few months as it cut costs. He declined to share the number of employees who would be let go. The first phase was last September, and more are planned for its next fiscal year, Jacobson said.
Clorox saw its products fly off the shelves at the height of the pandemic, when consumers rushed to keep their homes free of infection and stockpiled on its wipes and surface cleaners.
However, demand has waned since then, with product volumes decreasing in three of Clorox’s four business segments in the reported quarter.
Still, the multiple rounds of price increases that Clorox rolled out across a breadth of its products over the last two years helped the company report a 1% increase in second-quarter net sales at $1.72 billion from a year ago.
Analysts on average were expecting a near 2% drop to $1.66 billion, according to Refinitiv IBES data.
Even as Clorox grappled with higher raw material costs and manufacturing expenses, the price increases helped its gross margin expand 320 basis points to 36.2% in the three months ended Dec. 31.
Oakland, California-based Clorox said it now expects adjusted earnings between $4.05 and $4.30 per share for fiscal 2023, compared with its previous outlook range of $3.85 to $4.22 per share.
Jacobson said that consumers are buying smaller sizes of Clorox products at stores they typically shop at, like Walmart (NYSE:), as they seek to lower the total cost of the shopping trip. The maker of Pine-Sol cleaners and Liquid Plumr clog removers skews toward low-income consumers earning less than $50,000 per year, executives have said.
Clorox also tightened its forecast for full-year sales to between a 2% drop and a 1% rise, compared to a 4% decrease to a 2% increase estimated previously.