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OAKLAND, Calif. Clorox reported strong earnings growth for its fourth-quarter and fiscal 2010, citing robust gross margin expansion and top-line growth within the company's targeted range for the year.
Clorox reported fourth-quarter net earnings of $171 million, or $1.20 diluted earnings per share, versus $170 million, or $1.20 diluted EPS, in the year-ago quarter. Earnings in the current quarter reflected higher sales and lower interest expense, offset by a higher effective tax rate and lower gross margin.
Selling and administrative expenses increased to 13.4% of sales from 12.3% of sales in the year-ago quarter, primarily driven by higher incentive compensation, and investments the company is making in facility and global IT improvements and the international expansion of the Burt's Bees business. "We believe these are important strategic investments that, once completed, will further enable growth, future cost savings and new product innovation," said CFO Dan Heinrich.
The company also said its sales were driven by an increased shipment of certain products, including auto care product ArmorAll, Pine-Sol, Burt's Bees and Glad trash bags.
"I'm very pleased with our performance for the fiscal year," said Clorox chairman and CEO Don Knauss. "We increased our total demand-building investment, driving higher all-outlet market share in the U.S. and share gains in international markets. I'm especially pleased we delivered 15% growth in economic profit, the metric we believe best aligns over the long term with creating value and generating shareholder return," Knauss said. "Our organization continues to do a fantastic job of executing the day-to-day business in a very challenging economic environment."