The Clorox Company (NYSE:CLX) Q2 2015 Earnings Conference Call - Final Transcript

Feb 04, 2015 • 01:30 pm ET

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The Clorox Company (NYSE:CLX) Q2 2015 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen and welcome to The Clorox Company Second Quarter Fiscal Year 2015 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. At the conclusion of our prepared remarks, we will conduct a question-and-answer session. [Operator instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Mr. Steve Austenfeld, Vice President of Investor Relations for The Clorox Company. Mr. Austenfeld, you may begin your conference.

Executive
Steve Austenfeld

Great, thank you. Welcome everyone and thank you for joining Clorox's second quarter conference call. On the call with me today are Benno Dorer, Clorox's Chief Executive Officer; and Steve Robb, our Chief Financial Officer. We're broadcasting this call over the Internet and a replay of the call will be available for seven days at our website, thecloroxcompany.com.

Let me remind you that on today's call, we will refer to certain non-GAAP financial measures, including, but not limited to, free cash flow, EBIT margin, debt-to-EBITDA and economic profit. Management believes that providing insights on these measures enables investors to better understand and analyze our ongoing results of operations. Reconciliation with the most directly comparable financial measures, determined in accordance with GAAP can be found in today's press release, this webcast's prepared remarks or supplemental information available in the Financial Results area of our website as well as in our filings with the SEC.

In particular, it may be helpful to refer to tables located at the end of today's earnings release. Please recognize that today's discussion contains forward-looking statements. Actual results or outcomes could differ materially from management's expectations and plans. Please review our most recent 10-K filing with the SEC and our other SEC filings for a description of important factors that could cause results or outcomes to differ materially from management's expectations and plans. The Company undertakes no obligation to publicly update or revise any forward-looking statements.

Now turning to our prepared remarks, I'll cover highlights of our second quarter business performance by segment. Steve and Robb will then address our financial results and financial outlook for fiscal year '15 and finally, Benno will wrap-up our prepared remarks as well as open it up for Q&A.

Consistent with today's press release, all of our commentary today is on a continuing operations basis, unless otherwise stated. Turning to our top line results, in the second quarter, volume was up 4% and sales grew 3%, including the impact of 3 points of unfavorable foreign currencies, with the largest impact coming from Argentina. Excluding the impact of foreign currencies, sales grew 6%, our growth reflects higher volume as well as a nearly 2 point benefit from price increases. Importantly, our sales results reflect strong performance across all US segments and international on a currency neutral basis.

In Q2, our US 13-week market shares decreased one-tenth of a point versus the year-ago quarter. The slight decline in the quarter reflected continued intense competitive activity in our Cat Litter and Brita