Chair and CEO Linda Rendle on Q4 and FY24 performance
By Linda Rendle, Chair and Chief Executive Officer
Our fourth-quarter and fiscal year 2024 results, which we reported today, reflect the continued advancement of our IGNITE strategy to strengthen our competitive advantage, accelerate profitable growth and set up our company for long-term success.
Thanks to the execution by the team, we ended fiscal year 2024 in a position of operational strength as we fully restored supply and distribution and recovered most of the market share that we lost after our August 2023 cyberattack. We closed out with flat organic sales for the full year despite the significant disruption caused by the cyberattack, which drove an 18% organic sales decline in the first quarter.
Importantly, we continued to deliver on our commitment to rebuild margin so we can fuel growth, adding another 360 basis points of gross margin expansion on top of the 360 basis points in fiscal year 2023. We are on track to return to our pre-pandemic gross margins in fiscal year 2025. We also achieved another year of double-digit adjusted EPS growth. This strong recovery reflects the superior value of our brands, supported by our consistent investments in both good and challenging times.
Keeping our eyes on the long term, we executed relentlessly against our transformation plans:
- Today we announced that we have entered into a definitive agreement to sell our Better Health Vitamins, Minerals and Supplements (VMS) business and expect that transaction to close in the first quarter of fiscal year 2025. This, coupled with the prior divestiture of our Argentina business, reflects our commitment to continue evolving our portfolio to reduce volatility and accelerate sales growth, as well as structurally improve our margin, in service of driving more consistent and profitable growth over time.
- We successfully completed the implementation of our streamlined operating model, which enhances our ability to respond more quickly to changing consumer behaviors and innovate more quickly. Through this model, we expect to deliver ongoing cost savings of about $100 million annually.
- We successfully completed the first wave of our new Enterprise Resource Planning (ERP) system implementation in Canada to enable a more strategic and integrated environment across supply chain, finance and our business units, improving our agility, speed of innovation and ability to grow and operate more efficiently over the long term.
- We continued to invest behind value superiority with strong advertising and innovations across major brands in fiscal year 2024, such as Clorox Toilet Bomb Foaming Toilet Bowl Cleaner, Pine-Sol concentrated multi-surface cleaner, the Brita Refillable Water Filtration System, seven new Hidden Valley Ranch flavors and new fragrances in the Glad ForceFlex Scented Trash Bag lineup.
- We were named a Best Company to Work For by U.S. News & World Report, included in America’s Climate Leaders by USA Today, listed as one of America’s Best Employers for Diversity by Forbes, and recognized as one of the Best Companies for Equal Opportunity for Advancement by parity.org.
As we look ahead to fiscal year 2025, consumers will remain under pressure. That said, we have a portfolio of strong brands in essential categories that have shown resilience during challenging times. We have and will continue to invest strongly behind our brands to maintain value superiority.
While we have more work to do, we are confident that we have the right plans and investment level not only to win with consumers but also to deliver strong financial performance in fiscal year 2025, supported by a return to volume-driven sales growth, pre-pandemic gross margin, as well as free cash flows in line with our long-term goals.
I’d like to thank our Clorox teammates for their contributions and dedication to our business throughout the year, all while living our values each and every day. Together, we are building our business back even stronger in the year ahead as we deliver on our commitments to our company and our stakeholders.