Clorox Gears Up for Q1 Earnings: Here's What You Should Know
Earnings Preview
The Clorox Company (NYSE: CLX) is set to report its fiscal 2023 first-quarter earnings on Thursday, November 3, before the market opens. Analysts expect the company to post earnings per share (EPS) of $1.50 on revenue of $1.86 billion.
Clorox has beaten EPS estimates in three of the past four quarters. In the fiscal 2022 fourth quarter, the company reported EPS of $1.62, beating estimates by $0.05. Revenue came in at $1.85 billion, also beating estimates.
What to Watch
There are several key things to watch for in Clorox's upcoming earnings report:
- Sales growth: Clorox has been struggling with sales growth in recent quarters. In the fiscal 2022 fourth quarter, sales declined by 1%. Analysts will be looking for signs of improvement in sales growth in the first quarter.
- Cost inflation: Clorox has been facing cost inflation pressures, particularly in the areas of raw materials and transportation. Analysts will be looking for how the company is managing these costs.
- Profitability: Clorox's profitability has been declining in recent quarters. In the fiscal 2022 fourth quarter, operating margin declined by 130 basis points to 12.7%. Analysts will be looking for signs of improvement in profitability in the first quarter.
Valuation
Clorox shares are currently trading at a price-to-earnings (P/E) ratio of 21.5, which is above the average P/E ratio of 19.9 for the household products industry. However, Clorox's P/E ratio is below its five-year average of 23.2.
Clorox's forward P/E ratio, which is based on estimated earnings for the next 12 months, is 19.3. This is below the industry average forward P/E ratio of 20.3.
Technical Analysis
Clorox shares have been trending lower in recent months. The stock is currently trading below its 50-day and 200-day moving averages. The relative strength index (RSI) is also below 50, indicating that the stock is oversold.
However, the stock is approaching a support level at $140. If the stock can hold above this level, it could provide a buying opportunity.
Conclusion
Clorox is a well-known consumer products company with a strong brand portfolio. However, the company has been facing some challenges in recent quarters, including declining sales growth, cost inflation, and declining profitability.
Analysts will be looking for signs of improvement in these areas when Clorox reports its fiscal 2023 first-quarter earnings on Thursday, November 3.
