The Clorox Company reported sales growth of 4 percent and an 11 percent increase in diluted net earnings per share (EPS) from continuing operations for its fourth quarter, which ended June 30, 2015.
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On a currency-neutral basis, fourth-quarter sales grew 6 percent. For fiscal year 2015, the company reported sales growth of 3 percent and diluted EPS of $4.57 from continuing operations, an increase of 4 percent. On a currency-neutral basis, fiscal-year sales grew 5 percent.
In the fourth quarter, Clorox delivered earnings from continuing operations of $189 million, or $1.44 diluted EPS, compared to $171 million, or $1.30 diluted EPS, in the year-ago quarter.
Fourth-quarter diluted EPS results reflect the benefits of higher sales and gross margin expansion. In addition, the sale of real estate assets by a low-income housing partnership contributed a one-time benefit of 6 cents to diluted EPS.
These factors were partially offset by increased selling and administrative expenses, primarily from higher performance-based incentive costs as a result of strong fiscal-year financial performance; compared to the prior year which reflected lower performance-based incentive costs when the company's results fell below financial targets.
In addition to the impact on selling and administrative expenses, the impact of incentive costs is reflected in cost of goods sold and research and development on the income statement. Increased investments in total demand-building programs also reduced fourth-quarter diluted EPS.
In the fourth quarter, sales grew 4 percent, driven by the benefits of strong volume growth and price increases, partially offset by 2 percentage points of unfavorable foreign currency exchange rates.
Volume for the fourth quarter increased 3 percent, reflecting gains in three out of the company's four reporting segments.
The company's fourth-quarter gross margin increased 270 basis points to 45.6 percent from 42.9 percent in the year-ago quarter, driven primarily by the benefits of cost savings, price increases and lower commodity costs. These factors were partially offset by higher manufacturing and logistics costs. ■