Clorox Earnings: Cost Pressures Dent Profits, but Prudent Brand Spending Persists; Shares Attractive

Clorox's organic sales slipped 1%, reflecting lower prices and an unfavorable mix. Higher manufacturing and logistics costs, combined with negative mix (a 310-basis-point hit), outpaced cost savings (a 170-basis-point benefit), resulting in 140-basis-point erosion in gross margins to 43.2%.