Clorox’s Sales Fall As Demand Fades In Post Pandemic Days

Despite the fact that Clorox was one of the companies that benefited the most with the arrival of the COVID-19 pandemic as people rushed to buy disinfectant products, in April, its quarterly sales were stable compared to last year. In the past, however, adjusted earnings fell by nearly 15%. Income and profits for the next fiscal year are expected to be similar, and the upsurge of the pandemic is expected to slow down. 

Recent data put forth by government officials hint that nearly 155 million Americans have been vaccinated with a total dose against COVID-19. With the flow of such a quick vaccination drive, all consumers are relaxing their clean-up measures, which is affecting the market value of the company’s products. The shares are down by more than 10% this year, making Clorox one of the worst-performing companies in the S&P 500 Index. Since the coronavirus pandemic began, its shares have fallen by more than 25% from its peak days. Clorox dominates the disinfectant wipe market with more than $1 billion with a 45% market share. For now, the company is focusing on products for business as Americans are returning to offices, restaurants, and movie theatres.

Since last year, the world’s largest manufacturer of cleaning materials said that consumers would continue to experience shortages of disinfectant wipes and other products during 2021 due to “overwhelming demand” during the coronavirus pandemic. However, recent data highlights a distorting image as the demand has fallen down by great margins due to the slowing down of the pandemic, ultimately because of the large-scale vaccination drive carried out by the government. 

At a virtual Deutsche Bank conference held in June, Kevin Jacobsen, Clorox’s chief financial officer, said that during the pandemic, the company was a growing height of 20+%. He also added saying that the company officials believe in its root and that in the future, they will grow the venture from 3 to 5%. 

Since March last year, disinfectants have been running out on supermarket shelves. Disinfectant wipes were in such high demand that along with toilet paper and hand sanitizer, they were the first products to register a shortage. But in the current scenario, the record says otherwise. 

John Boylan, the senior equity analyst with Edward Jones, made a remark saying that Clorox acted like the poster child of the lockdown due to the Covid-19 pandemic. He also added saying that there’s a wider market opportunity for Clorox and that they should consider moving beyond wipes. Referring to Clorox’s other consumer brands, such as Fresh Step litter and Hidden Valley Ranch line of salad dresses, Boylan emphasized how such entities can help the brand to continue being in the market.

ByMahendra D

Jul 5, 2021 ,