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Clorox (CLX) Strengthens Home Care Unit, Expands in Atlanta


The Clorox Company CLX announced the opening of its latest manufacturing facility in Atlanta. This new facility is expected to produce Home Care products, thereby strengthening the Home Care unit of the company’s Cleaning segment.

Spanning across 258,000 square feet, the new manufacturing facility, Atlanta West is adjacent to the Atlanta Main, which also makes Home Care products. This investment is likely to enhance the supply-chain capabilities and drive growth. Notably, this opening reflects Clorox’s Home Care unit’s continued success and the strength of Clorox-branded products.

Apparently, Scentiva products, including disinfecting wipes and sprays, that were introduced in January 2017 delivered solid sales in the recently reported first-quarter fiscal 2018. This helped boost the sales of the Home Care business.

Being an important center for Clorox, Atlanta is expected to create significant opportunities for the community in the days ahead. The company already employs nearly 800 people in its offices in Alpharetta, Kennesaw and Forest Park. Further, the new Atlanta West facility has added about 100 jobs in the Clayton County. Going forward, we expect Clorox to serve the needs of the community in a more efficient manner based on its constant efforts and differentiated products.

Cleaning Segment Bodes Well

As one of the most important divisions, the Cleaning Segment contributed nearly 37.3% to overall sales in the first quarter. This marks the highest contribution from any of the company’s segments. The division’s sales improved 5% to $559 million, mainly driven by strength in Home Care with higher shipments for several Clorox-branded products, particularly Clorox disinfecting wipes along with Scentiva wipes and sprays.

While the Cleaning Segment registered a volume growth of 5% in the quarter, Home Care unit increased by high-single digits. In the quarters ahead, we expect this division to drive growth, particularly in the Home Care unit.

Clorox stock did not react much to the news. However, the stock has gained 9.3% in the past month outperforming the industry’s growth of 3.8%. Further, this Zacks Rank #3 (Hold) company has a VGM Score of B and long-term earnings growth rate of 6.6%.

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Some better-ranked stocks in the broader Consumer Staples sector include The Boston Beer Company, Inc. SAM, The Estee Lauder Companies Inc. EL and Vector Group Ltd. VGR. While Boston Beer and Estee Lauder sport a Zacks Rank #1 (Strong Buy), Vector Group carries a Zacks rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Boston Beer has a long-term earnings growth rate of 5%. Also, the company’s earnings have outpaced the Zacks Consensus Estimate in each of the trailing four quarters by an average of 63.4%.

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Vector Group has pulled off an average earnings surprise of 9.6% in the trailing four quarters.

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