Benno Dorer, CEO, Clorox
Scott Mlyn | CNBC
Clorox has not seen an increase in demand amid the coronavirus outbreak, but the company has plans in place to keep shelves stocked with its cleaning products should sales pick up, CEO Benno Dorer told CNBC’s Jim Cramer on Wednesday.
“We’re not seeing an impact on sales just yet, but what we are focused on is educating consumers on the proper use, on ways to prevent [contracting the virus] and getting ready to have products in place by building inventory, should consumers, customers and communities need it,” he said in a “Mad Money” interview.
The comments come one day after Clorox reported quarterly results where the company’s top-line numbers were in line with Wall Street estimates and the bottom line topped expectations. Executives said on the conference call that concerns about the novel coronavirus and flu season did not play a role in the quarter ended December.
“What I can tell you is that we’re leaning into inventory to be ready, just in case,” Dorer explained in the interview. “We are known to be more agile, now, in terms of our ability to build inventory, and we’re going to be ready to do that. But like I said it’s hard right now to speculate where this will go because it’s so rapidly evolving, but at this point we’re not seeing any inventory risk at all.”
The coronavirus, which originated in late 2019 in the Chinese city of Wuhan, has shaken up global markets as the flu-like disease spreads worldwide. As of Wednesday afternoon, more than 27,000 cases and 560 deaths have been recorded worldwide, though a large percent of those affected are in China.
U.S. health officials have confirmed a dozen cases in the U.S. from coast to coast. Five people were tested for the disease in New York City earlier Wednesday.
Because a remedy for the disease has yet to be developed, consumers are expected to load up on disinfecting wipes, sprays and bleach in efforts to kill germs.
An increase in demand “would certainly add meaningful value to our investors — the top line and the bottom line — except that though what we will never do is try to benefit from fears or concerns that consumers have,” Dorer said. “We’re here to serve the communities and we’re taking the lead from our customers, communities, from nonprofit organizations, which we have started to reach out with, and importantly from health organizations like the EPA [U.S. Environmental Protection Agency] and the World Health Organization.”
Clorox reported fiscal second-quarter revenue of $1.43 billion and $1.46 in earnings per share, which beat analyst expectations by 15 cents. The company said it expects that its gross margin will continue to widen this year. Revenue fell 1.5% from the year prior, according to FactSet.
Clorox’s revenue is projected to grow in the current quarter.
The stock is up 6% to $165.34 since the company reported.
Disclosure: Cramer’s charitable trust owns shares of Clorox.