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
Executive
Steve Austenfeld

for the six month period ending in November, which is the latest available reporting period. Looking at our categories, five of our eight US retail business units increased market share with particularly strong gains in home care and charcoal. In addition to improving market shares, driving category growth remains a top priority and during the quarter, our US categories were up very healthy 2 points. For this quarter's performance highlights the investments we're making behind innovation and strong marketing communications to drive profitable growth are working.

And with that I'll review our second quarter results by segment. Starting with our cleaning segment, second quarter volume and sales, each increased 2% largely due to higher shipments of homecare products. But then homecare, which is our largest US business unit, sales increased strongly with growth seen broadly across Clorox branded products. In particular, we saw a double-digit growth on Clorox Disinfecting wipes, and that's despite a fairly muted cold and flu season today.

Building on our clean and the slow growth platform, we began shipping three new Clorox scrub single items in December, heavy duty, Decide-a-Size and multipurpose. These items build on previously launched new products such as Clorox Disinfecting wipes, with micro scrubbers, which have done particularly well in market. Sales in our laundry business also increased in the quarter driven in part by our most recent price increase on Clorox bleach, which was a year ago in February of 2015.

From a marketer standpoint, while overall bleach share dipped in the quarter, we were very pleased to see strong share growth on our splash list product line. Splash list bleach is a trade up from our regular product and we're driving growth with new sizes and dedicated advertiser. And system with our strategy, this is a great example of a margin creative product, helping drive profitable growth.

Partially offsetting increased sales in homecare and laundry was a decline in sales from our professional products business which was comparing against very strong double-digit growth in the year ago quarter, which had been driven by last year's Ebola and Enterovirus concerns.

Looking forward to the remainder of fiscal year '16, we continue to expect our professional products business to grow sales strongly. Switching to the household segment, we delivered flat volume and 1% sales growth. In Bags and Wraps sales were flat because we left the price increase taken in November 2014 and also increased trade promotion spending and system weather strategy to accelerate profitable growth, the Glad business is driving category trade up for base trash bags to our higher margin premium trash bag business, represented by our Force Flex and Odorshield offerings.

Operator
Operator

In September, we begin shipping to key retailers new kitchen trash bags branded as Glad with Clorox.

Executive
Steve Austenfeld

These bags feature antimicrobial properties that help control the growth of bacterial odors. We expect this new item to successfully build on prior launches of Glad Odorshield bags with powerful breeze and we're also watching tuning sense in this line in