Please ensure Javascript is enabled for purposes of website accessibility

Stock Market Today: Clorox and Sysco Beat Profit Expectations

By Jim Crumly – Updated Apr 20, 2019 at 5:59PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Steady sales growth and profit surprises lifted these two dividend stocks.

With little new information on trade negotiations with China, investors were focused on upcoming earnings reports on Monday. The Dow Jones Industrial Average (^DJI -1.62%) and the S&P 500 (^GSPC -1.72%) were in the red in the morning, rose in the afternoon, and jumped in the final minutes of trading.

Today's stock market

Index Percentage Change Point Change
Dow 0.70% 175.48
S&P 500 0.68% 18.34

Data source: Yahoo! Finance.

Technology led the market today, with the Technology Select Sector SPDR ETF (XLK -1.31%) rising 1.6%. Healthcare stocks were laggards; the Health Care Select Sector SPDR ETF (XLV -0.51%) slipped 0.3%. 

As for individual stocks, two dividend-paying consumer goods giants, Clorox (CLX 0.21%) and Sysco (SYY -3.18%), reported surprisingly high profits in their latest quarters.

Check out the latest Clorox and Sysco earnings call transcripts.

Rising bar graph and stacks of coins.

Image source: Getty Images.

Clorox sees steady growth

Shares of consumer goods conglomerate Clorox jumped 5.7% after the company beat profit expectations for its fiscal second quarter, thanks to price increases and cost-cutting. Net sales grew 4% to $1.47 billion, about what analysts were anticipating. Earnings per share of $1.40 came in well ahead of expectations of $1.30.

The company's largest segment, cleaning, increased sales 6% and pre-tax earnings 12%, with growth across all businesses. The lifestyle segment, which was bolstered by Clorox's acquisition of Nutranext last year, had sales growth of 25% and a pre-tax earnings increase of 13%. Sales declined in the household segment by 4% due to competition, and international sales were down 8% on currency losses.

Clorox maintained earlier full-year guidance of EPS between $6.20 and $6.40 despite $0.05 to $0.07 of negative impact from tariffs. That steady outlook for continued growth was encouraging for investors in the consumer staples sector, which was hit hard in the fourth quarter.

Sysco battles cost pressures

Last quarter, shares of food distributor Sysco were hammered when the company reported disappointing profit on rising supply chain costs. Those cost pressures were still in evidence when the company announceded Q2 results today, but it beat lowered expectations and promised further savings measures, sending the stock up 4.8%.

Sales came in as expected, up 2.5% to $14.8 billion, while the company earned an adjusted $0.75 per share, down 3.8% from last year but above the analyst consensus of $0.73. Sales in the U.S. grew 4.2% and gross profit increased 4.5%, but operating expenses were up 4.7% due to increased costs in warehouse and transportation.

Sysco said it has recently implemented organizational and executive leadership changes that will result in a 10% reduction in salaried corporate support positions, and it expects to see further benefit from cost savings initiatives in the second half.

Jim Crumly has no position in any of the stocks mentioned. The Motley Fool is short shares of Clorox. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sysco Corporation Stock Quote
Sysco Corporation
$74.92 (-3.18%) $-2.46
The Clorox Company Stock Quote
The Clorox Company
$141.58 (0.21%) $0.30
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$29,590.41 (-1.62%) $-486.27
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$3,693.23 (-1.72%) $-64.76
The Select Sector SPDR Trust - The Health Care Select Sector SPDR Fund Stock Quote
The Select Sector SPDR Trust - The Health Care Select Sector SPDR Fund
$122.73 (-0.51%) $0.63
The Select Sector SPDR Trust - The Technology Select Sector SPDR Fund Stock Quote
The Select Sector SPDR Trust - The Technology Select Sector SPDR Fund
$123.74 (-1.31%) $-1.64

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.