Executive Summary
The Clorox Company reported its QQ4 2024 results, showcasing a solid recovery with net revenue of $1.903 billion, representing a slight decline of 5.75% year-over-year but an increase of 4.91% quarter-over-quarter. The company's strategic focus on cost management and product innovation contrasted with a challenging retail environment, allowing for operating income to rise by 6.31% year-over-year and net income to increase significantly by 22.73% year-over-year. Furthermore, the diluted EPS surged to $1.73, reflecting an impressive 22.54% increase on a year-over-year basis. Management's commitment to maintaining margin health and enhancing operational efficiencies is evident in the 14.75% quarter-over-quarter improvement in gross profit, suggesting a resilient underlying business model.
Key Performance Indicators
QoQ: 523.53% | YoY:22.73%
QoQ: 524.39% | YoY:22.54%
Key Insights
### Revenue Performance
**Total Revenue:** $1.903 billion (YoY: -5.75%, QoQ: +4.91%)
**Gross Profit:** $879 million (gross profit margin: 46.19%, YoY: +1.97%, QoQ: +14.75%)
**Operating Income**: $320 million (operating income margin: 16.82%, YoY: +6.31%, QoQ: +36.75%)
**Net Income:** $216 million (net income margin: 11.36%, YoY: +22.73%, QoQ: +523.53%)
**Diluted EPS:** $1.73 (YoY: +22.54%, QoQ: +524.39%)
### Balance Sheet Health
**Total Assets:** $5.751 billion
**Total Liabilities...
Financial Highlights
### Revenue Performance
Total Revenue: $1.903 billion (YoY: -5.75%, QoQ: +4.91%)
Gross Profit: $879 million (gross profit margin: 46.19%, YoY: +1.97%, QoQ: +14.75%)
Operating Income: $320 million (operating income margin: 16.82%, YoY: +6.31%, QoQ: +36.75%)
Net Income: $216 million (net income margin: 11.36%, YoY: +22.73%, QoQ: +523.53%)
Diluted EPS: $1.73 (YoY: +22.54%, QoQ: +524.39%)
### Balance Sheet Health
Total Assets: $5.751 billion
Total Liabilities: $5.259 billion
Total Stockholder Equity: $328 million
Current Ratio: 1.031
Debt-to-Equity Ratio: 10.51 (high leverage poses risks)
### Cash Flow Assessment
Net Cash from Operating Activities: $340 million
Free Cash Flow: $259 million (indicative of healthy cash generation)
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.90B |
-5.75% |
4.91% |
| Gross Profit |
879.00M |
1.97% |
14.75% |
| Operating Income |
320.00M |
6.31% |
36.75% |
| Net Income |
216.00M |
22.73% |
523.53% |
| EPS |
1.74 |
22.54% |
524.39% |
Key Financial Ratios
operatingProfitMargin
16.8%
operatingCashFlowPerShare
$2.74
freeCashFlowPerShare
$2.08
Management Commentary
### Management Commentary
During the earnings call, management emphasized the importance of adaptability in a turbulent market environment.
- On cost management: "We remain focused on driving efficiencies across our cost structure, ensuring that we can reinvest in key growth areas while protecting our margins."
- On product innovation: "We're excited about our upcoming launches in the Health and Wellness category, which continue to be a strong performer in our portfolio. Innovation remains our anchor strategy to meet evolving consumer needs."
"Despite the challenges we faced this quarter, our strong operational execution and cost management allowed us to enhance our profitability metrics substantially. We are confident in our ability to deliver consistent growth moving forward."
— Linda Rendle, CEO
"Innovation will continue to drive our growth. The positive reception to our new product lines under the Health and Wellness segment validates our strategic priorities."
— Kevin Jacobsen, CFO
Forward Guidance
Management provided encouraging forward guidance for the upcoming quarters, expecting revenue stabilization as product innovation initiatives begin to roll out and market conditions improve. Targets for gross margins are also set to remain within the 45-50% range, company-wide. They suggest that monitoring input costs and consumer demand fluctuations will be critical in navigating the coming fiscal year, particularly with ongoing economic pressures.