(All countries outside of the U.S.)
•3% volume decrease •3% sales increase •24% pretax earnings decrease
Volume declined in the segment largely due to decreased shipments in Latin America and Canada. Latin America volume was down mid-single digits, but sales were up due to the benefit of price increases. Outside of Latin America and Canada, volume results were generally positive. Overall segment sales increased primarily due to the benefit of price increases. The 24 percent pre-tax earnings decline of $8 million was due to margin compression, driven in part by significant inflation impacting manufacturing and logistics costs, expenses associated with IT systems implementation in Latin America and the impact of price controls in Venezuela and Argentina.
Clorox Provides Improved 2013 Financial Outlook
Clorox provided an improved financial outlook for fiscal 2013:
* 3-5 percent sales growth (previously 2-4 percent)
* EBIT margin up 25-50 basis points (unchanged)
* Diluted EPS in the range of $4.25-$4.35 (previously $4.20-$4.35)
Clorox now anticipates sales growth for fiscal 2013 in the range of 3 percent to 5 percent, versus the company's previous outlook of 2 percent to 4 percent. This reflects strong results in the first half of the fiscal year, continued category growth, product innovation across many of the company's brands and the benefit of previously implemented prices increases. Uncertainty in some international markets, particularly in Venezuela and Argentina, as well as a more challenging comparison to strong sales growth of nearly 6 percent in the second half of fiscal 2012, continue to be factors in the company's fiscal 2013 outlook.
The company continues to expect earnings before interest and taxes (EBIT) margin to increase by 25-50 basis points for the fiscal year, reflecting strong cost savings and the benefit of price increases. Commodity costs are estimated to be about flat versus the prior year. The company's outlook reflects a range of 5 to 10 cents of diluted EPS impact related to a possible currency devaluation in Venezuela and continued difficulty in implementing price increases in the country. The updated outlook also reflects higher advertising spending and a higher tax rate in the second half of the fiscal year versus the same period in fiscal 2012.
Clorox continues to expect spending against its systems and facilities investments, as well as other infrastructure-related investments, to be about equal to fiscal 2012, or in the range of $50 million to $55 million.
Net of all these factors, Clorox now anticipates fiscal 2013 diluted EPS in the range of $4.25 to $4.35 versus the company's previous outlook of $4.20 to $4.35.
"We're pleased to be raising our outlook for sales and earnings, recognizing the company's strong first-half results, including significant margin growth," said Senior Vice President - Chief Financial Officer Steve Robb. "I'm confident about the plans for the remainder of the year, including increased investments in demand-building programs to support product launches and the health of our brands. In addition, our outlook includes an increased contingency given the ongoing challenges in Venezuela, including a possible currency devaluation."
For More Detailed Financial Information
Visit the Investors: Financial Reporting: Financial Results section of the company's website at TheCloroxCompany.com for the following:
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