Why Has Clorox Stock Underperformed The S&P Since Late 2020?

CLX: Clorox logo

Clorox (NYSE: CLX) stock price lost 39% from $202 at 2020 end to around $123 currently, primarily due to unfavorable changes in its P/S multiple. However, the company witnessed a steady rise in its revenue per share, driven by a rise in sales and a drop in its outstanding share count. The company’s stock had risen strongly during 2020 due to increased demand for sanitation and cleaning products during the pandemic, but has pulled back since, and has underperformed the S&P 500, which was roughly unchanged over this period.

In our interactive dashboard, Why Clorox Stock Moved: CLX Stock Has Lost 39% Since 2020, we break down the factors behind this move.

(A) Clorox’s Total Revenue has risen 5.8% from $6.7 billion in FY 2020 to $7.1 billion currently

  • Clorox’s total revenue had risen from $6.7 billion in FY ’20 to $7.3 billion in FY ’21, but currently stands lower at $7.1 billion on an LTM basis.
  • As of FY ’21, around 40% of Clorox’s total sales come from its Health and Wellness segment, which brought in $2.98 billion in FY ’21.
  • However, the international sales segment grew the fastest, rising 14% from $1.02 in FY ’20 to $1.16 billion in FY ’21.
  • For details about Clorox revenues and comparison to peers, see Clorox (CLX) Revenue Comparison
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(B) Revenue per share (RPS) increased 8.3% from $53.40 in FY 2020 to $57.81 currently

  • Clorox revenue rose from $6.7 billion in 2018 to $7.1 billion currently, while the outstanding share count dropped 2.3% from 125.9 million in 2020 to 123 million currently.
  • Due to this, RPS has risen steadily from $53.40 in FY ’20 to $57.81 currently.

(C) Price-To-Sales (P/S) multiple for Clorox has dropped from 3.7x in 2020 to 2.9x by 2021 end, and currently stands at 2.1x, around 40% lower than its 2020 level

  • Clorox’s P/S multiple dropped to around 2.9x by late 2021, on the back of lowering investor expectations surrounding demand for its products across all segments, leading to a pull back in the company’s sales.
  • Additionally, due to the increased economic uncertainty weighing on the broader markets and the gradual drop in demand for cleanliness products to pre-Covid levels, the P/S multiple has pulled back further, currently standing at around 2.1x.
  • For additional details about the company’s stock returns and comparison to peers, see Clorox (CLX) Stock Return Comparison.

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Returns Jun 2022
MTD [1]
YTD [1]
Total [2]
 CLX Return -15% -29% 3%
 S&P 500 Return 1% -21% 86%
 Trefis Multi-Strategy Portfolio -7% -25% 194%

[1] Month-to-date and year-to-date as of 6/15/2022
[2] Cumulative total returns since the end of 2016

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