FILE PHOTO: Bottles of Clorox bleach are displayed for sale on the shelves of a Wal-Mart store in Rogers, Arkansas, June 4, 2009. REUTERS/Jessica Rinaldi/File Photo
(Reuters) - Shares in Clorox were down 8.1% on Thursday, after hitting their lowest level since May 2018, after the cleaning supplies company's warned that an August cyber attack would push it into a quarterly loss and slash up to 28% off its revenue.
Shares in Clorox last traded at $121.16 after earlier hitting a low of $119.56 and were eying their biggest one-day percentage loss since Feb. 2022.
Late Wednesday, Clorox forecast a loss per share between $0.35 and $0.75 for its fiscal first quarter ended Sept. 30, versus a year-ago profit of $0.68. It said net sales would fall year-over-year by 23% to 28%.
After this, Evercore ISI slashed its Clorox price target to $120 from $160 and Raymond James downgraded it to 'market perform' from 'outperform'. Bank of America cut its price target to $120 from $145 while Deutsche Bank dropped its target to $136 from $155.
BoFA analyst Anna Lizzul, who rates Clorox 'underperform', said its warning of a first-quarter gross margin decline is "particularly notable" as she had expected it to be "the largest quarter for gross margin expansion" in its fiscal year 2024.
Along with the attack and a challenging consumer environment, Lizzul said rising shipment costs from higher oil prices may also push Clorox to reduce promotalsol activity in fiscal year 2024 to protect margins.
And Lizzul saw "little potential to raise prices," since it had made four rounds of price increases in the last 2 years.
On Aug 14 Clorox said it took some systems offline after unauthorized activity disrupted operations. Then on Sept. 18 it said first-quarter results could see a "material impact."
On Sept 29 it said all its manufacturing facilities resumed operations and that it was ramping up production to restock inventories after the attack.
But, Evercore ISI analyst Javier Escalante who rates Clorox 'underperform,' voiced concerns about how long the company took to work out the financial impact. He also pointed to its warning about "ongoing, but lessening operational impacts in the second quarter."
Escalante described this as a "disconcerting" disconnect between operations, financial planning and reporting in his research note.
(Reporting By Sinéad Carew; Editing by Andrew Heavens)
