Six Unsexy-But-Profitable Brands
Clorox, Kraft and Palmolive put performance ahead of cachet.
Clorox (CLX) is, to put it bluntly, about as sexy as Margaret Thatcher. Consider its main products: The flagship bleach, Pine-Sol and Tilex cleaning products, Glad trash bags, Brita water filters, Kingsford charcoal and Hidden Valley dressing. The list goes on; all are products few of us could do without.
Clorox's reputation is built on the fact that its products are indispensable. Although its products are not proprietary -- indeed, that secret formula for bleach was released long ago -- it faces few legitimate competitors because of customer loyalty and its well-established brand name.
The company was founded in 1913 in Oakland, California, and its products are distributed worldwide. You can find them virtually everywhere. My local bodega in New York, for example, hoards Clorox bleach - it's right next to the pre-packaged sushi.
Out of necessity, Clorox raised prices in its last quarter. This, in tandem with cutting expenses, helped it exceed expectations on both earnings and sales in early August.
"Our market shares held steady overall, despite continued economic pressure on consumers," said chairman and CEO Don Knauss. "Cost savings and the benefit of recent price increases helped lessen the impact of intense pressure from commodity and energy cost increases."
What that means in terms of today's dramatically altered energy paradigm is this: Clorox should benefit nicely in the next quarter, since the price of its major input -- natural gas for its plastic products -- has dropped precipitously. And last quarter, the company announced that it was raising prices to compensate for rising commodity costs. So either way, the company wins.
Last year, however, Clorox tried to add a little glamor to its image by acquiring Burt's Bees for almost $925 million. The move has already been accretive; in the aforementioned quarter, Clorox reported that Burt's added nearly 3% of the 11% gain in sales. Alongside Clorox's other products, Burt's beeswax lip balm looks almost obscenely sexy.
Click through to see 5 other radically unsexy companies whose stocks are performing seductively:
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