Clorox Doesn't See Need For Any Further Price Rollbacks
June 11 2009 - 9:30AM
Dow Jones News
Clorox Co. (CLX) doesn't expect it will need to take any further
pricing rollbacks, Chief Financial Officer Dan Heinrich said at the
company's analyst meeting Thursday.
"We're not anticipating anywhere else in the portfolio we are
going to take pricing actions," Heinrich said. "We feel reasonably
confident that all the other pricing we've taken will stick."
In May, Clorox said it would cut prices for its Glad trash bags
for the second time in recent months to better compete in the
category as prices of some commodities have come down. That move
gave some analysts pause that the company would face pricing
pressure in other key categories for the company, such as its
namesake bleach and its disinfectant cleaners.
Consumer-product companies like Clorox have been roiled by
volatile commodities prices for the past few years, and Clorox said
it has absorbed commodity costs increases of nearly $600 million
over the last five years, while it has raised prices more than 50
times. Key brands, like Glad trash bags and Clorox bleach, have had
multiple price increases, Heinrich said.
For Glad trash bags specifically, Heinrich said the company has
raised prices five times in recent years, with just two rollbacks
in recent months.
"On a net basis, we're still up 30% on Glad," Heinrich said.
While the company doesn't expect to cut prices for now, Heinrich
did say that if commodity costs on the whole continued to decline,
they company would benefit, but if that were to happen, Clorox
would also face some further price rollbacks by competitors.
Overall, that would be a net positive for margins, he added.
Clorox shares were recently up 1.1% at $54.08.
-By Kelly Nolan, Dow Jones Newswires; 201-938-4049;
kelly.nolan@dowjones.com