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Why Clorox Stock Gained 11% in May

By Demitri Kalogeropoulos – Jun 1, 2020 at 1:41PM

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An unprecedented global focus on health and sanitation created strong demand for its cleaning products.

What happened

Clorox (CLX -2.67%) shareholders outperformed a booming market last month. The stock gained 11% in May compared to a 4.5% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The rally added to a strong year for Clorox so far, which is up 34% while the broader market is down slightly.

A person disinfects their counter with cleaning spray.

Image source: Getty Images.

So what

Investors have shown Clorox more attention recently as the COVID-19 pandemic was seen to spark more demand for its disinfecting and cleaning supplies. The company confirmed that optimism by announcing on May 1 that organic sales shot higher by 18% in the fiscal third quarter. Clorox also revealed surging cash flow and rising profitability for the period .

Now what

CEO Benno Dorer said in a press release that sales are on pace to rise between 6% and 8% for the full fiscal year, which ends in July, up from their prior target of about 1%. But for investors to further stock price gains, the consumer staples giant will need to demonstrate that it can sustainably boost sales volumes even after the pandemic threat fades.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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