(Reuters) - Clorox Co (CLX.N) posted its biggest rise in quarterly sales in a decade and raised its annual forecast on Friday as it reaped the benefits of unprecedented demand for disinfectants and bleach during the COVID-19 pandemic, sending its shares up.
Demand for cleaners and other hygiene products has skyrocketed as consumers try everything to avoid the virus, which has now infected more than 3.2 million people globally, according to a Reuters tally.
Clorox is running its factories around the clock and using third-party suppliers and air freight to try to meet demand for disinfecting products, which include its namesake bleaches, wipes and cleaners. It managed to boost their production by 40%.
But demand for some of those products spiked more than 500% in March, and remains “exorbitantly high,” Clorox said.
“As people see wipes in stores, they grab them and they’re pretty much sold out right away,” Chief Executive Benno Dorer said. “And we’re far from refilling customer inventories”.
The company continues to find new ways to increase capacity and “should see meaningful continued improvement this summer,” he said.
Clorox shares, already up more than 21% this year, rose 3.4% to $192.71 on Friday.
“The company’s cleaning portfolio likely a long-term beneficiary from consumers’ increasing emphasis on health and well-being,” said Jefferies analysts, noting that Clorox’s valuation, at 28 times earnings, was the highest among its direct peers and likely full.
What is more, Clorox has a range of other goods, such as Glad trash bags and Kingsford charcoal, which should continue to perform well despite an economic downturn, Clorox said.
Quarterly sales in its cleaning division, which makes up nearly 38% of total sales, surged 32%.
Clorox’s net sales rose 15% to $1.78 billion in the third quarter ended March 31, the biggest increase in quarterly sales since June 2010, according to Refinitiv data.
Quarterly net earnings jumped to $241 million, or $1.89 per share, topping analysts’ average estimate of $1.67 per share, according to IBES data from Refinitiv.
Reckitt Benckiser (RB.L), which owns rival cleaning brand Lysol, on Thursday reported record sales growth.
Clorox and Reckitt last week urged people not to inject or ingest their disinfectants, after U.S. President Donald Trump suggested researchers try using them in COVID-19 patients.
Clorox’s new full-year forecast calls for sales to rise between 4% and 6%, and earnings per share of $6.70 to $6.90.
Reporting by Uday Sampath in Bengaluru and Martinne Geller in London; Editing by William Maclean, Nick Zieminski and Jonathan Oatis