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Bleach, Disinfectant Sales Power Clorox's Q4 Earnings


Like some other companies that are major manufacturers of home cleaning products, the Clorox Company on Monday reported a 22% sales increase for the fourth quarter that ended June 30. That quarter, from April to the end of June, also includes the most damaging months so far of the pandemic.

"I'm pleased that we've delivered a quarter of exceptional results, fueled by strong demand for our products that we've been privileged to provide in support of public health and to serve some of the essential needs of consumers as they've had to stay at home more," said Clorox Chair and CEO Benno Dorer.

It’s a nice last act by Dorer. Clorox also announced today that after six years at the top, he will be replaced by the current Clorox president, Linda Rendle. Dorer becomes chairman of the board.

Clorox separates the company into four operating units. The Health and Wellness unit that contains Clorox bleach and cleaning products had a 33% sales increase and a 84% increase in pre-tax earnings.  That increase was driven mainly by sales growth, which the company says was partially offset by higher advertising investments and manufacturing and logistics costs.

In the third quarter, Clorox sales of its cleaning products, which includes its namesake disinfectant bleach, wipes and Pine-Sol, were up 32% over the year before, as consumers had already begun their rush to the cleaning aisles of supermarkets because of the pandemic.

Consumers seem to instantly connect the Clorox name to disinfectant, so much so that in April, when President Trump seemed to suggest that injecting disinfectant might be a possible treatment for the virus, Clorox and Lysol were quick to caution against that move. “Bleach and other disinfectants are not suitable for consumption or injection under any circumstances,” a Clorox spokesman said at the time.

Other companies with a big presence in the health and home care businesses, notably Procter & Gamble, have also reported larger quarterly earnings because of the pandemic. P&G’s overall sales were up 4%, but organic sales (that is, sales from businesses P&G owned prior to the quarter) went up a record 14%, for items like detergent and toilet paper.

P&G  warned that the pandemic could have a much more negative effect if there is another surge,  resulting in a deeper worldwide recession and stricter lockdowns in parts of the world.

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