Clorox Q2 Hit by $10M Cyberattack Costs, Totaling $49M YTD

Ticker: CLX · Form: 10-Q · Filed: 2024-02-01T00:00:00.000Z

Sentiment: bearish

Topics: earnings, cybersecurity, expenses, operational-risk

TL;DR

**Clorox's bottom line got dinged by $10M in cyberattack costs this quarter, totaling $49M for the half-year.**

AI Summary

Clorox Co. reported a significant impact from a cyberattack that occurred in August 2023. For the three months ended December 31, 2023, the company incurred $10 million in costs related to the cyberattack, with $5 million hitting Cost of Goods Sold and another $5 million in Selling, General and Administrative Expenses. Over the six months ended December 31, 2023, total cyberattack costs reached $49 million, split between $25 million in Cost of Goods Sold and $24 million in Selling, General and Administrative Expenses. This matters to investors because these unexpected costs directly reduce profitability and could signal ongoing operational vulnerabilities, potentially impacting future earnings and stock performance.

Why It Matters

The cyberattack costs directly reduced Clorox's profitability in the recent quarter and year-to-date, impacting earnings per share and potentially future operational efficiency.

Risk Assessment

Risk Level: medium — The ongoing costs and potential for future disruptions from the cyberattack present a moderate operational and financial risk to Clorox.

Analyst Insight

A smart investor would monitor Clorox's next earnings report for any further disclosures on cyberattack-related costs and their impact on future guidance, as these unexpected expenses directly reduce profitability.

Key Numbers

$10M — Cyberattack costs (incurred for the three months ended December 31, 2023, directly impacting profitability.)
$49M — Total cyberattack costs (incurred for the six months ended December 31, 2023, showing the cumulative financial impact.)
$5M — Cyberattack costs in Cost of Goods Sold (for the three months ended December 31, 2023, indicating direct production or supply chain disruptions.)
$24M — Cyberattack costs in Selling, General and Administrative Expenses (for the six months ended December 31, 2023, reflecting administrative and operational recovery efforts.)

Key Players & Entities

CLOROX CO /DE/ (company) — the company filing the 10-Q
$10 million (dollar_amount) — cyberattack costs for the three months ended December 31, 2023
$5 million (dollar_amount) — cyberattack costs in Cost of Goods Sold for the three months ended December 31, 2023
$5 million (dollar_amount) — cyberattack costs in Selling, General and Administrative Expenses for the three months ended December 31, 2023
$49 million (dollar_amount) — total cyberattack costs for the six months ended December 31, 2023
$25 million (dollar_amount) — cyberattack costs in Cost of Goods Sold for the six months ended December 31, 2023
$24 million (dollar_amount) — cyberattack costs in Selling, General and Administrative Expenses for the six months ended December 31, 2023
August 2023 (date) — when the cyberattack occurred
December 31, 2023 (date) — end of the reporting period for the three and six months

Forward-Looking Statements

Clorox will continue to incur cyberattack-related expenses in the next quarter. (CLOROX CO /DE/) — medium confidence, target: 2024-03-31

FAQ

What was the total financial impact of the cyberattack on Clorox for the three months ended December 31, 2023?

For the three months ended December 31, 2023, Clorox incurred a total of $10 million in costs related to the cyberattack.

How were the cyberattack costs distributed between Cost of Goods Sold and Selling, General and Administrative Expenses for the three months ended December 31, 2023?

For the three months ended December 31, 2023, $5 million of the cyberattack costs were recorded in Cost of Goods Sold and another $5 million in Selling, General and Administrative Expenses.

What was the cumulative financial impact of the cyberattack on Clorox for the six months ended December 31, 2023?

The total cyberattack costs for the six months ended December 31, 2023, amounted to $49 million.

How were the cyberattack costs allocated between Cost of Goods Sold and Selling, General and Administrative Expenses for the six months ended December 31, 2023?

For the six months ended December 31, 2023, $25 million of the cyberattack costs were attributed to Cost of Goods Sold and $24 million to Selling, General and Administrative Expenses.

When did the cyberattack that impacted Clorox's financials occur?

The cyberattack that impacted Clorox's financials occurred in August 2023.

From the Filing

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