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Consumer products giant Clorox (NYSE:CLX) reported Q4 CY2024 results topping the market’s revenue expectations , but sales fell by 15.3% year on year to $1.69 billion. Its non-GAAP profit of $1.55 per share was 10.7% above analysts’ consensus estimates.

Is now the time to buy Clorox? Find out in our full research report.

Clorox (CLX) Q4 CY2024 Highlights:

• Revenue: $1.69 billion vs analyst estimates of $1.64 billion (15.3% year-on-year decline, 2.8% beat)

• Adjusted EPS: $1.55 vs analyst estimates of $1.40 (10.7% beat)

• Management raised its full-year Adjusted EPS guidance to $7.15 at the midpoint, a 5.5% increase

• Operating Margin: 14.1%, down from 16.4% in the same quarter last year

• Organic Revenue fell 9% year on year (20% in the same quarter last year)

• Market Capitalization: $19.64 billion

"We achieved better-than-expected results across sales, margin and EPS in the second quarter due to our strong demand creation plans, which also supported our share growth. Our results underscore the resiliency of our portfolio as we continue to invest in our brands to deliver superior value to win with consumers at a time when they need it most," said Chair and CEO Linda Rendle.

Company Overview

Founded in 1913 with bleach as the sole product offering, Clorox (NYSE:CLX) today is a consumer products giant whose product portfolio spans everything from bleach to skincare to salad dressing to kitty litter.

Household Products

Household products stocks are generally stable investments, as many of the industry's products are essential for a comfortable and functional living space. Recently, there's been a growing emphasis on eco-friendly and sustainable offerings, reflecting the evolving consumer preferences for environmentally conscious options. These trends can be double-edged swords that benefit companies who innovate quickly to take advantage of them and hurt companies that don't invest enough to meet consumers where they want to be with regards to trends.

Sales Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

With $7.17 billion in revenue over the past 12 months, Clorox is one of the larger consumer staples companies and benefits from a well-known brand that influences consumer purchasing decisions. However, its scale is a double-edged sword because there are only so many big store chains to sell into, making it harder to find incremental growth. To accelerate sales, Clorox must lean into newer products.

As you can see below, Clorox struggled to increase demand as its $7.17 billion of sales for the trailing 12 months was close to its revenue three years ago. This shows demand was soft, a tough starting point for our analysis.

This quarter, Clorox’s revenue fell by 15.3% year on year to $1.69 billion but beat Wall Street’s estimates by 2.8%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. This projection doesn't excite us and suggests its newer products will not lead to better top-line performance yet.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.

Organic Revenue Growth

When analyzing revenue growth, we care most about organic revenue growth. This metric captures a business’s performance excluding one-time events such as mergers, acquisitions, and divestitures as well as foreign currency fluctuations.

Clorox has generated solid demand for its products over the last two years. On average, the company’s organic sales have grown by 6.4% year on year.

In the latest quarter, Clorox’s organic sales fell by 9% year on year. This decline was a reversal from its historical levels. We’ll keep a close eye on the company to see if this turns into a longer-term trend.

Key Takeaways from Clorox’s Q4 Results

This was a beat and raise quarter. We were impressed by how significantly Clorox blew past analysts’ organic revenue expectations this quarter. We were also happy its revenue and EPS both outperformed Wall Street’s estimates. As a result of positive momentum in the business, Clorox raised its full-year EPS guidance. Zooming out, we think this was a really good quarter. The stock remained flat at $160.55 immediately after reporting.

Clorox had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.