Clorox issued a warning on Wednesday, revealing a significant impact on sales and profit during the quarter ending September 30, mainly attributed to the aftermath of a cyberattack that disrupted operations. The company expects a net sales decrease of 23% to 28% and estimates a decline in gross margin for the quarter compared to the same period last year. Clorox anticipates a per-share loss ranging from 35 cents to 75 cents and an adjusted loss of up to 40 cents per share. The cyberattack, disclosed in August, continues to affect production, although its impact is diminishing.
While operational systems have been repaired, the cyberattack compelled Clorox to resort to manual procedures, slowing down product fulfillment. The company mentioned that it is still evaluating the potential effects of the hack on the current fiscal year and beyond. Clorox expects to benefit from the restocking of retailer inventories as it gradually resumes fulfillment during the current quarter.
The cyberattack on Clorox had wide-ranging effects, as disclosed in a September securities filing. Although the threat is contained, the company faced challenges in its operations. The cybercriminal group Scattered Spider, previously linked to attacks on casino companies MGM and Caesars, is suspected to be connected to the August attack on Clorox. MGM also warned in September that the cyberattack could have a material impact on the company’s finances.
Clorox’s warning highlights the persistent threats and consequences of cyberattacks on businesses, affecting not only immediate operations but also financial performance. The company’s efforts to recover and resume normal operations underscore the challenges faced by organizations in the aftermath of such incidents, emphasizing the importance of cybersecurity measures to safeguard against potential disruptions and financial losses.
