Clorox Shares Plummet as Cyberattack Takes a Toll on Sales
Clorox, the renowned producer of Pine-Sol and bleach, saw a steep drop in its shares as the company revealed the significant impact of a cyberattack on its sales and profits during the prior quarter. The attack, which occurred in August, has continued to hamper the company’s operations and resulted in major setbacks.
The consequences of the cyberattack were evident in Clorox’s stock performance, with shares plummeting more than 8% on Thursday morning. This decline pushed the stock to a 52-week low, and it has now lost over 13% of its value since the beginning of the year.
While Clorox stated that it had successfully contained the hack, the repercussions linger as the company gradually restores its operations to normalcy. The aftermath of the cyberattack severely impacted production, leaving Clorox dealing with the fallout even as it seeks to recover from the incident.
Adding to its troubles, Raymond James recently downgraded Clorox, expressing skepticism regarding the stock’s short-term prospects. The downgrade stemmed from the unexpected material effect of the cyberattack on the company. Raymond James struggles to foresee a swift recovery in Clorox’s stock, pointing out that consumers are increasingly making price-conscious choices and commodity costs are rising.
Clorox’s bleak outlook was further cemented by its financial projections. The company announced that it anticipates a sales decline of 23% to 28% for the quarter that ended on September 30. Additionally, Clorox expects its gross margin for the quarter to be lower compared to the same period last year. On a per-share basis, Clorox estimates a loss ranging from 35 cents to 75 cents. However, on an adjusted basis, the projected loss is slightly lower, reaching up to 40 cents per share.
The cyberattack and its aftermath have undoubtedly dealt a heavy blow to Clorox’s financial performance. The company now faces the arduous task of regaining consumer trust and mitigating the long-lasting effects of the cyber incident.