OAKLAND, Calif., Feb. 2, 2018 /PRNewswire/ — The Clorox Company (NYSE: CLX) reported sales growth of 1 percent and diluted net earnings per share from continuing operations (diluted EPS) of $1.77 for its second quarter of fiscal year 2018, which ended Dec. 31, 2017. Diluted EPS results reflect a benefit of 61 cents from a significantly lower effective tax rate in the second quarter as a result of U.S. corporate tax reform.
“We’re very pleased that halfway through the fiscal year, we’re on track to achieve our sales outlook,” said Chairman and CEO Benno Dorer. “Looking at the balance of the fiscal year, we’re staying the course with our 2020 Strategy, with continued investments to deliver superior consumer value behind robust innovation that differentiates our products and brands, and digital marketing that engages consumers online.”
Dorer added, “In addition, we’re extremely pleased with the expected benefits from tax reform, which will give us the opportunity to further enhance shareholder value.”
All results in this press release are reported on a continuing operations basis, unless otherwise stated.
Fiscal Second-Quarter Results and Tax Reform Impacts1
Following is a summary of key second-quarter results. All comparisons are with the second quarter of fiscal year 2017 unless otherwise stated.
1% sales growth $1.77 diluted EPS (55% increase)
Sales grew 1 percent, on top of a 5 percent sales increase in the year-ago quarter, reflecting increases in the International, Lifestyle and Cleaning segments, supported by the benefit of price increases and partially offset by unfavorable mix. Second quarter sales also included a reduction of nearly 1 point from the sale of the Aplicare business in late August 2017. Volume grew 1 percent, on top of 8 percent volume growth in the year-ago quarter, largely driven by gains in the Cleaning and Lifestyle segments.
As previously communicated, gross margin was significantly pressured in the second quarter, decreasing 170 basis points to 43.0 percent from 44.7 percent in the year-ago quarter. The decrease in gross margin was driven primarily by higher input costs related to commodities and further tightening of the transportation market. Strategic investments in future growth and cost savings initiatives also contributed to the decrease in gross margin. These factors were partially offset by the benefit of cost savings.
“Like other companies, we’re facing more pronounced cost pressures from commodities and logistics,” said Chief Financial Officer Steve Robb. “I believe we’re taking