Clorox (CLX 1.39%) says its disinfecting wipes will remain in short supply until next year, as the bleach maker has been unable to keep up with the overwhelming demand for them amid the coronavirus pandemic.
The company had previously expected to be able to bring supply back into equilibrium by the summer, but as a second wave of COVID-19 cases materializes, consumers continue wanting to wipe down every surface in an attempt to kill the virus.
Image source: Getty Images.
Cleaning up on COVID-19
In an interview with Reuters following Clorox's fiscal fourth-quarter earnings call, CEO Benno Dorer called disinfecting wipes "the hottest commodity in the business right now." He also said that even with 10 third-party manufacturers helping it produce the wipes, it's a complex supply chain involved in making them, so it's hard to meet demand. Clorox is looking to add additional contract manufacturers to help out.
Cleaning products account for more than 40% of Clorox's revenue, and fourth-quarter segment sales surged 33% from last year. Where demand had been up fivefold in the spring, the company said demand for disinfectants was now running six times higher.
Lysol disinfecting spray maker Reckitt Benckiser (RBGL.Y -1.43%) recently reported similar outsize consumer demand, saying sales for the first six months of 2020 have rocketed 70% higher. Its similarly positioned disinfectant in international markets, Dettol, is up 62% year over year.
Having raised its full-year guidance in April, Reckitt Benckiser said it now expects to beat those new higher targets and boosted guidance again.
Clorox typically doesn't provide quarterly guidance, but it is expecting double-digit top-line growth in the fiscal first quarter. However, its full-year fiscal 2021 forecast is suggesting flat to low single-digit increases.
