Clorox Stock Drops as Company Confirms Cyberattack Pummeled Sales
Key takeaways
- Cleaning products titan Clorox’s latest quarterly earnings have suffered due a cyberattack in August
- The hack left Clorox weeks behind on orders and has cost the company billions
- Clorox shares fell over 8% to a five-year low
Clorox shares have been sliding this week after the company admitted a serious cyberattack on its systems left sales hurting for the last quarter. The maker of Pine-Sol and other popular cleaning products was left on its knees after the attack wiped out its automated order processing.
It’s left the stock sliding this week as the share price hit fresh lows not seen in years. It’s left investors uneasy about Clorox’s future, especially as it’s taken so long for the company to get back on its feet.
Here’s the latest on the Clorox cyberattack, how it’s impacted the business’ operations and what Wall Street made of the earnings estimates.
What’s happened with Clorox?
Cleaning products company Clorox confirmed a cyberattack that the company had suffered earlier in the year has significantly impacted its operations since, even though it managed to contain the hack.
In the wake of the cyberattack, Clorox was forced to take key systems offline and switch to a manual order processing system. The automated order processing only started up again at the end of September.
The cyberattack, which took place in August, was contained after an “unauthorized activity” impacted Clorox’s operations. Investors started to understand how bad the attack was when Clorox warned that the latest quarterly results could see a “material impact”.
Wall Street’s worst fears have now been confirmed. Clorox said it anticipated a massive 23% to 28% decline in sales during the latest quarter ending September 30, which is a massive loss for the company. Clorox also expects its gross margin to be down from the year-ago period, though didn’t provide a figure, and anticipates an adjusted per-share loss of 35 cents to 75 cents.
How did Wall Street react?
Shares in Clorox fell 8.1% on Thursday, hitting a 52-week low for the company. Clorox stock is now down 11.7% since the start of the year and touching a low of $119, it’s the lowest price for the stock since 2018.
A slew of investors and banks cut targets on the stock going forward, with Evercore ISI slashing its target price for the stock from $160 to $120. Raymond James downgraded Clorox shares to ‘market perform’ from ‘outperform’, while Bank of America also cut its target to $120 from $145. Deutsche Bank didn’t make as deep a cut in its target, predicting $136 for Clorox, down from $155.
The bottom line
Clorox has greatly suffered from the August cyberattack, and investors have been concerned about how long it took for the cleaning products giant to assess the financial damage.
Everyone is under the impression that it’s going to take more time for the brand to fully recover, so the share price targets are pretty pessimistic right now.
