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Clorox issued a warning that its financial performance suffered a considerable setback in the quarter ending September 30, primarily attributed to the lingering impacts of a cyberattack that disrupted its operations.
The manufacturer of bleach and cleaning products anticipates a 23% to 28% drop in net sales and predicts its gross margin for the quarter to also decline compared to the same period last year.
Furthermore, Clorox foresees reporting a per-share loss ranging between 35 and 75 cents, with an adjusted potential loss of up to 40 cents a share.
Net sales are expected to decrease by 28% to 23% from the year-ago quarter. Organic sales are now expected to decrease by 26% to 21% for the quarter, compared to the Company’s prior expectations of mid-single-digits growth as provided in the Q4 earnings remarks.
Based on its current assessment of the situation, the Company expects to experience ongoing, but lessening, operational impacts in the second quarter as it makes progress in returning to normalized operations.
Clorox Press Release (Source)
The company, which brought the cyberattack to light in August, acknowledged its continued interference with production, albeit to a diminishing degree, explains CNBC. Through a release, Clorox communicated its expectation to “begin to benefit from the restocking of retailer inventories as it enhances fulfillment” in the current quarter.
The company is in the process of evaluating the potential impact of the hack on its performance for the current fiscal year and beyond.
The Incident Forced Clorox to Switch to Manual Operations
In a securities filing from September, Clorox revealed that the cyberattack had broad ramifications. While operational systems have been mended, the company adopted manual methods for many processes, thereby hampering product fulfillment. Nonetheless, Clorox has assured that the threat has been contained.
As per Bloomberg, Scattered Spider, a hacker group linked to recent cyberattacks on casino companies MGM and Caesars, is believed to be associated with the August attack on Clorox. MGM also issued a warning in September, stating that the cyberattack might materially impact the company’s finances.
Operational downtime resulting from a cyberattack can lead to substantial financial losses, damage a company’s reputation, and potentially lead to legal consequences due to breaches of data protection regulations.
If you want to learn more about how you can build a strong, multi-layered cybersecurity strategy, check out this article: How to Create a Successful Cybersecurity Strategy.
Madalina, a seasoned digital content creator at Heimdal®, blends her passion for cybersecurity with an 8-year background in PR & CSR consultancy. Skilled in making complex cyber topics accessible, she bridges the gap between cyber experts and the wider audience with finesse.
