The Clorox Company expects to report a financial loss in the first quarter of fiscal 2024, following an August cyberattack that caused massive delays in order processing and product shortages, according to a filing Wednesday with the Securities Exchange Commission.
Clorox said organic sales during the quarter, which ended September 30, are now expected to fall between 21% and 26% year over year, a contrast to the company’s prior estimates of mid single-digit growth.
The Oakland, Calif.-based company provides a range of commercial and consumer goods, including Clorox bleach, Pine-Sol, Burt’s Bees and Fresh Step cat litter.
Adjusted earnings per share are now expected to range between break-even to a loss of 40 cents a share, as the cyberattack's impact will outweigh the benefits of pricing, supply chain optimization and cost savings, the company said. The estimate also includes charges related to the cyberattack and long-term strategic investments for enhanced productivity and digitalization.
The company expects to report a net loss of between 35 cents to 75 cents a share.
The suspected hackers are Scattered Spider, the threat group linked to the MGM Resorts and Caesars Entertainment hacks in Las Vegas, Bloomberg reported.
Scattered Spider is suspected of working with another group called AlphV/Black Cat, according to the report. The Las Vegas casino attacks have been linked to social engineering techniques in which the hackers gained administrative access to internal computer systems by tricking customer service desks.
Clorox expects the operational strain of the attack to continue during the fiscal second quarter, but to a lesser extent, according to the SEC filing. The company said it will benefit somewhat as it begins to restock retailer inventory.
The company said it is still assessing how this will impact earnings for fiscal 2024 and beyond.
“This once again underscores the importance of securing the cyber-physical systems that underpin operational production environments,” Katell Thielemann, distinguished VP analyst at Gartner, said via email. “For companies that produce goods, an attack that impacts loss of visibility or loss of control of the physical modes of production, directly hurts the bottom line.”
Clorox plans to provide an update during its scheduled fiscal first quarter earnings call in November.
In late September, the company resumed normal order processing and later factory operations after weeks of production delays.
