Clorox says cyberattack will impact first-quarter net sales, earnings
The company first reported to investors about the initial cyberattacks in August
SentinelOne Chief Security Advisor Morgan Wright says there is a 'high likelihood' hackers will attack again on 'Making Money.'
Clorox revealed Wednesday how much it anticipates the cyberattack that the company recently experienced will weigh on its first-quarter financial performance.
Its latest update about the business impact of the cybersecurity attack came just over two weeks after Clorox had indicated September 18 that it would likely see negative financial impacts stemming from it.
Clorox first informed investors about the incident, which involved "unauthorized activity" in its IT systems, back in August. It wasn’t the only company targeted by a cyberattack this fall – MGM Resorts and Caesars Entertainment were, too.
Clorox disinfecting wipes arranged in Germantown, New York, US, on Monday, July 24, 2023. Clorox Co. released earnings figures on August 2. Photographer: Gabby Jones/Bloomberg via Getty Images (Gabby Jones/Bloomberg via Getty Images / Getty Images)
For the first quarter, Clorox projected a year-over-year drop of 28-23% in net sales.
CLOROX WARNS OF PRODUCT SHORTAGES AFTER CYBERATTACK
Preliminary first-quarter expectations included its adjusted earnings per share to be "a loss of $0.40 to $0.00." It linked that to the cyberattack "more than offset[ting] the benefits of pricing, cost savings and supply chain optimization," as well as it leading to "lower cost absorption in costs of products and operating expenses.
Other metrics – gross margin, organic sales and diluted net earnings per share – will see negative effects as well, according to the company.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CLX | THE CLOROX CO. | 167.64 | +1.89 | +1.14% |
The now-contained cyberattack had brought "wide-scale disruption of Clorox’s operations, including order processing delays and significant product outages," it said.
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Regarding the status of its operations, Clorox reported it was "making progress in restoring its systems and operations."
"On Sept. 25, Clorox began the process of transitioning back to automated order processing and the vast majority of orders are now taking place in an automated manner, which is enabling the company to ramp up output and shipments to rebuild retailer inventories," it said. "Clorox expects the process of restocking retailer inventories will occur over time as it ships above consumption levels."
The Clorox brands include wipes, multi-surface disinfecting sprays, bleach, toilet cleaners and other products. The company also has numerous brands like Burt’s Bees, Fresh Step Glad and Pine-Sol under its purview.
"Based on its current assessment of the situation, the company expects to experience ongoing, but lessening, operational impacts in the second quarter as it makes progress in returning to normalized operations," Clorox said.
Glad trash bags are displayed at an Associated Supermarket in New York, U.S., on Wednesday, Oct. 31, 2007. Clorox Co., the maker of Glad trash bags and its namesake bleach, said first-quarter profit fell on increased raw material costs. The consumer- … (Reed/Bloomberg via Getty Images / Getty Images)
Meanwhile, Clorox also revealed that it planned to hold an earnings call for the first quarter's results in November, at which time it will update its longer-term expectations.
CAESARS CONFIRMS HACKER STOLE SOCIAL SECURITY NUMBERS, OTHER DATA IN CYBERATTACK
According to an early August press release, the company generated a total of $2.02 billion net sales for fiscal 2023’s fourth quarter, a figure that represented a lift of 12% from the $1.8 billion it saw in the same period the prior year. Its net earnings were $176 million.
In terms of adjusted EPS, it experienced an 80% year-over-year jump in the fourth quarter, coming in at $1.67.