Clorox has announced it will implement new price hikes for approximately 50% of its portfolio in November and 70% of its portfolio by the end of fiscal 2022 as it looks to mitigate inflationary headwinds.
"It is in relation to three things that we're really seeing," Clorox CEO Linda Rendle told analysts on the company's first quarter earnings call Monday. "Pressure on commodities is one, and certainly additional pressure on resin, Hurricane Ida pushed out the resin curve by a month or two and so we're seeing continued impact there. Transportation continues to be a negative driver for us and we're seeing that continue throughout the remainder of the fiscal year. And although there hasn't been a big material impact directly, we're looking at labor closely given what we're seeing on pressures there."
The additional price increases come after Rendle warned in April that Clorox was planning to raise prices for Glad products in July. Rendle noted during Monday's conference call that Clorox is currently evaluating whether to implement an additional price increase on Glad due to pressure on resin.
Clorox chief financial officer Kevin Jacobsen said the company now expects about $350 million in commodities and transportation cost inputs, up from previous guidance of about $300 million. Jacobsen added that peak cost inputs will likely be seen in the second quarter, primarily driven by resin.
Clorox reported adjusted earnings per share of $1.21 for the quarter and overall net sales of $1.8 billion, down approximately 6% year-over-year but up 21% from 2019.
Net sales for the company's health and wellness segment declined 8% year-over-year but was up 20% from 2019 and the household segment declined 12%-year-over-year but was up 27% from 2019. Meanwhile, net sales in the lifestyle and international segments increased by 4% and 1% year-over-year and 21% and 19% from 2019, respectively.
Rendle emphasized that Clorox saw stronger-than-anticipated demand across the vast majority of its portfolio during the first quarter.
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Looking ahead at the full year for fiscal 2022, Clorox is forecasting a net sales decline in the range of 2% to 6% and adjusted earnings per share between $5.40 and $5.70, or a decrease between 26% and 21%. In the second half of the fiscal year, Clorox continues to expect sales to return to the lower end of its long-term sales growth target of 3% to 5%.