Clorox Stocks Tank As Pandemic Demand Fades

Clorox is one of the financial casualties in the aftermath of the COVID-19 pandemic, as an obsessively cleaning population eased disinfecting protocols as the world reopened amid widening vaccination distribution. Approximately 155 million people in the U.S. are now fully vaccinated.

During the pandemic, Clorox and other disinfectant wipes were hard to find due to purchase limits imposed by supermarkets and other retailers. That has now changed in the post-pandemic world, with the bigger short-term growth the company experienced giving way to a more modest long-term outlook, CNN reported on Thursday (July 1).

Regarding the company’s stock, five Wall Street analysts have rated Clorox as a “sell” and eight have recommended “hold.” Just four analysts have rated Clorox as a “buy,” CNN reported, citing data from Refinitiv.

“Clorox was the poster child for the COVID lockdown. But there is an opportunity beyond wipes,” said John Boylan, senior equity analyst with Edward Jones. He noted that Clorox also owns Glad trash bags as well as some other well-known consumer brands, most notably Fresh Step cat litter and the Hidden Valley Ranch line of salad dressings.

Shares of Clorox are down over 10 percent, making it among the worst performers in the S&P 500, per the report. The stock price has dropped 25 percent from its peak during the pandemic last summer. Sales and earnings are expected to be flat in 2022. 

“During the height of the pandemic, we were growing at 20-plus percent. We believe long term, we’ll be growing 3 percent to 5 percent,” Kevin Jacobsen, Clorox’s chief financial officer, said at a virtual Deutsche Bank conference held earlier in June.

April’s quarterly sales were flat compared to a year ago, Clorox said, and adjusted earnings fell close to 15 percent. The next fiscal year, which starts on Thursday (July 1), is forecasted to have flat revenue and profits, CNN reported.

The travel industry is now making a comeback, but hotels are still hard at work to maintain higher cleanliness protocols in order to encourage people to check in. The U.S. Travel Association and the American Hotel & Lodging Association (AHLA) launched guidelines to help the industry rebound.