Clorox NZ, like NYSE-listed parent, finds little earnings growth in household staples

Monday 10th February 2014

Clorox New Zealand, the local arm of the NYSE-listed bleach and Glad wrap maker, has extended a run of flat earnings, echoing the results of a parent company looking to emerging markets to drive growth in sales of household staples.

Profit was $8.8 million in the 12 months ended June 30, 2013, little changed from a year earlier, according to the Auckland-based company's annual report, and has declined about 11 percent from 2008. Sales edged up 0.5 percent to $42.7 million in the latest year, to be 15 percent down on 2008 revenue.

The California-based maker of household staples including cling wrap, Chux cloths and its eponymous bleach, Clorox, last week lowered its full-year sales forecast after reporting quarterly earnings that missed analyst expectations. Sales were little changed at US$1.33 billion in the three months ended Dec. 31.

"Like many companies, we continue to face significant headwinds from foreign currency declines, sluggish category growth and increasing commodity costs," said chief executive of the parent company Don Knaus said in a statement last week.

Clorox plans to "invest disproportionately behind its fastest-growing markets, including Chile, Colombia and Peru," according to a statement on its website. A spokesman for the New Zealand unit couldn't immediately be reached for comment.

The company also owns Burt's Bees' cosmetics, Brita water filters and Hidden Valley salad dressings. It sells its products in more than 100 countries, and manufactures products in more than two dozen countries.

Clorox entered the local market when it acquired NationalPak New Zealand in 2000, as part of their 1998 takeover of the Glad cling wrap company First Brands.

Clorox is listed on the Standard & Poor's 500 Index. Its shares have risen about 6 percent in the past 12 months, about a third of the rise in the benchmark index over the same time period. It recently traded at US$85.63.

The stock is rated as 'hold', based on the consensus of 19 analysts surveyed by Reuters and has a median price target of US$87.

BusinessDesk.co.nz

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