Clorox (NYSE: CLX) to achieve the goal of cost saving; job cuts

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clorox (New York Stock Exchange: CLXLinda Rindell, CEO, announced in a blog post that the company is on track to meet its goal of continuing annual savings of approximately $75 million to $100 million. Meanwhile, the manufacturer of consumer and professional products will also cut roughly 4% of its non-productive workforce, or about 200 jobs.

However, the company will hire some of the affected employees into other areas of the business and close a few open positions.

Clorox volumes remain low, and the company expects the trend to continue in the third quarter. This will affect the company’s overall revenue. However, benefits from higher prices and cost savings could continue to ease margins.

The company is focused on restoring its profitability to pre-pandemic levels. Prices increased to counter input cost headwinds. Moreover, it implemented cost saving initiatives to increase profitability.

During the second quarter conference call, Rundle said the company had a gross margin improvement of 320 basis points in the second quarter. Meanwhile, gross margins widened by 100 basis points in the first six months of the current fiscal year. Rendell added that the improvements underway provide the impetus to restore margins to pre-pandemic levels over time.

What is the expectation of Clorox stock?

While the company’s margin-expansion initiatives are likely to support margins, lower volume, cost-of-goods inflation, and investments in products and advertising could continue to pressure its earnings.

Clorox expects fiscal year 2023 adjusted earnings per share to decrease 1% or increase 5%. At the same time, its revenue is expected to increase by 1% or decrease by 2% due to moderate demand for cleaning and disinfection products.

Given near-term sales and earnings pressure, five analysts recommend selling CLX stock. Five suggest booking, and one recommends buying. Overall, Clorox has a Moderate Seller consensus rating on TipRanks. These analysts’ average price target of $142.20 reflects an upside potential of 12.73%.

Clorox (Nyse: Clx) To Achieve The Goal Of Cost Saving; Job Cuts 2