The Clorox Company (NYSE:CLX) Q2 2016 Earnings Conference Call - Preliminary Transcript

Feb 04, 2016 • 01:30 pm ET

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The Clorox Company (NYSE:CLX) Q2 2016 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to The Clorox Company Second Quarter Fiscal Year 2016 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 call, 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 a call with me today are Benno Dorer, Clorox's CEO, 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. Putting them up 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 most directly comparable financial measures, determined in accordance with GAAP can be found in today's press release this webcast prepared remarks or supplemental information available in the financial results 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.

So turning to our prepared remarks, I'll cover highlights in our second quarter business performance by segment. Steve Robb will then address our financial results and outlook for fiscal year '16 and finally, Benno will close with his perspective, as well as open up the call for Q&A.

So turning to our top results, in the second quarter volume grew 1% and sales were flat, as the benefits of pricing and volume growth were offset by unfavorable foreign exchange and increased trade spending. On a currency neutral basis, sales grew 3% and that was on top of 6% in the year ago quarter. Each of our US business segments grew sales in the quarter, as did our international business on a currency neutral basis. Market share in the US during the quarter increased a 10th of a point versus a year ago period, up to 22.3%. We're pleased to see that our investments in higher margin, faster growing businesses are continuing to support stable to growing market shares in our categories.

We're also pleased that international shares grew meaningfully