Jan/san products vendor Clorox has baked in a “mild” US recession to its fiscal 2024 outlook.
In his prepared remarks for the company’s Q4 earnings conference call, CFO Kevin Jacobsen said he expects to see the volatile and challenging business environment continue, with inflation impacting its customers and input costs.
“While our consumers and categories have remained resilient to date, our outlook assumes a mild US recession in the back half of our fiscal year,” he stated. Clorox’s H2 corresponds to the first six months of the 2024 calendar year.
His comments came after a good fourth quarter for the manufacturer in which price increases helped organic sales grow by 14% – despite a 2% drop in volumes. In fact, the volume figure was better than the company had been expecting. It reported strong shipments in its Cleaning business as it lapped significant inventory reductions in last year’s Q2, primarily in the disinfecting wipes business. There was also improving demand in the Professional Products segment.
The higher pricing had a positive effect on the bottom line. Gross margin was up 560 basis points to almost 43%, while adjusted operating profit climbed by more than 50% year on year to $294 million.