Clorox, a leading manufacturer of cleaning products, announced on Wednesday that it anticipates a loss in the first quarter due to a cyberattack that occurred in August. This attack resulted in product shortages and disruptions to their operations. In a statement, Clorox stated that they expect ongoing, albeit diminishing, operational impacts in the second quarter as they work towards returning to normalcy. They are also evaluating the potential long-term financial effects of the attack in fiscal year 2024 and beyond. This unfortunate incident is part of a larger trend, with other companies like MGM Resorts International and Caesars Entertainment falling victim to cyberattacks since August. Sources have indicated that these attacks were carried out by a group known as Scattered Spider, which specializes in using social engineering techniques to infiltrate systems and hold stolen data for ransom. Recently, Bloomberg reported that the same group was responsible for the cyber breach at Clorox, citing insider information. It is unclear at this time whether the hackers demanded a ransom or employed social engineering tactics. Clorox has notified law enforcement about the attack but has declined to provide further comments. The FBI is investigating the MGM and Caesars incidents but has not commented on the Clorox situation. When the cyberattack occurred in August, Clorox experienced disruptions to its IT infrastructure, leading to temporary shutdowns of certain systems and resorting to manual order processing. As a result, for the quarter ending on September 30, the company expects to report a loss per share ranging from 35 to 75 cents and a decrease in net sales by 23% to 28% compared to the previous year, when they recorded a profit of 68 cents per share. Additionally, Clorox now anticipates a decline in first-quarter gross margins, contrary to their initial expectations. Following the release of this outlook, Clorox’s stock declined by 2% during after-hours trading. Clorox attributed the negative impact on their financial performance to the cybersecurity attack, which overshadowed the favorable effects of pricing, cost savings, and supply chain improvements.
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