Clorox cuts annual profit forecast on weaker demand, rising costs

April 30 (Reuters) – Clorox cut its annual profit forecast on Thursday, as the Bleach maker battles weaker demand and rising costs tied to the U.S.-Israeli war on Iran.

Rising energy, fuel and freight costs are squeezing consumers, prompting them to cut discretionary spending, including branded household products, and raising concerns about margin pressure for consumer goods makers like Clorox.

“Consumer confidence weakened further as consumers faced rising gas prices and a weaker jobs outlook. As a result, consumers became even more selective in their spending, making it more competitive to capture incremental share of wallet,” Clorox executives said.

Shares of the company fell about 7% in extended trading.

The warning echoes concerns from across the consumer goods sector, including Procter & Gamble , flagging rising input costs as the Middle East conflict drives up oil prices.

Clorox now expects annual adjusted earnings per share of between $5.45 and $5.65, down from its prior forecast of $5.95 to $6.30.

The company also said it expects its annual gross margin to fall by 250 to 300 basis points, citing headwinds from the higher energy costs, as well as costs related to its acquisition of Purell maker GOJO Industries.

Earlier this month, Clorox completed the acquisition of GOJO to expand its portfolio in the health and hygiene segment.

The company expects annual net sales to fall 6%, compared with its earlier forecast of a 6% to 10% decline.

The Pine‑Sol parent reported adjusted earnings of $1.64 per share for the third quarter, beating estimates of $1.55, according to data compiled by LSEG.

Quarterly revenue of $1.67 billion was largely in line with estimates.

(Reporting by Koyena Das in Bengaluru; Editing by Sahal Muhammed and Sriraj Kalluvila)