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Clorox Shows Earnings Boost in Wake of COVID-19 Pandemic

Aug. 10, 2020
Company expects sales growth to drop in 2021.

Buoyed by strong demand for disinfectant products, Clorox Co. reported August 3 they had made $310 million in earnings during their fourth financial quarter. The Oakland, California-based company saw sales increase by 22% overall. Clorox also announced a change in leadership: Linda Rendle, who has been with the company for 17 years, will become its new CEO effective September 14. Benno Dorer, its current CEO, will continue as the company’s executive chair.

“Benno has done a tremendous job leading the company through its 2020 strategy with significant advancements in innovation, superior customer value, digital consumer engagement, company culture and ESG,” said Pamela Thomas-Graham, lead independent director of the board, in a statement. She also credited Dorer with leading the company as it “more than doubled” shareholder return.

Dorer also praised Rendle’s track record and the timing of the decision. “With a healthy business, so much opportunity for continued good growth and a successor who is ready to lead this company, it’s the right time for the board to appoint Linda as CEO,” he said in a statement. “Clorox will be in good hands.”

Clorox, which manufactures disinfectants, vitamins, water filtration devices and other products, has seen sales increase in large part due to increased demand brought on by the novel coronavirus pandemic. While sales at the company increased overall by 22%, the company’s health and wellness segment sales—which includes its disinfectant products—shot up by 33%. In terms of net cash from operations, Clorox made $1.5 billion in its fiscal year 2020, up 56% from the previous year’s take of $1 billion.

In its 2021 outlook, the company anticipated that sales growth would drop to flat or low single-digit increases, assuming continued elevated demand for cleaning products and minimal supply chain disruptions. “Our focus now is on building this momentum, investing aggressively in brand-building and category growth as well as in production capacity to meet heightened demand,” said CFO Kevin Jacobsen.

In a statement, Linda Rendle said she was “thrilled” by her appointment and said she had “immense confidence” in Clorox employees worldwide. “I step into this role with great optimism for the future of our company and global portfolio of trusted brands,” she said.

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