Clorox, the bleach manufacturing giant, has reported that a cyberattack in August resulted in a significant decline in sales and profits for the quarter ending September 30. The company expects organic sales to drop between 21% and 26% due to disruption, delays in order processing, and product outages caused by the attack. Clorox also anticipates a per share loss of between $0.35 and $0.75 as a result of the cyberattack, outweighing the benefits of higher pricing and cost savings. The company has incurred $25 million in costs related to the attack, including expenses for forensic experts, legal counsel, and IT professional services. Clorox’s stock has dropped 5.5% since the attack was disclosed in August. The cyberattack is believed to be the work of the threat group Scattered Spider, which has also targeted other organizations.
Clorox expects to experience ongoing operational impacts in the second quarter as it works towards returning to normalized operations. The company also plans to benefit from restocking retailer inventories as it ramps up fulfillment. The cyberattack has caused short-term fixed costs, such as lower cost absorption and operating expenses. Clorox’s stock price has reached its lowest point since June 2022, with a decrease of 22.2% since the attack was disclosed.
The costs associated with the cyberattack amount to $25 million, with $19 million after tax. These costs include expenses for forensic experts, legal counsel, and IT professional services, as well as high operating costs due to disrupted business operations. Ongoing cybersecurity monitoring and prevention costs, as well as enhancements to Clorox’s cybersecurity program, are not included in this figure. The company is making progress in restoring its systems and operations and believes the cyberattack has been contained.
The cyberattack on Clorox is believed to be the work of Scattered Spider, the same threat group responsible for recent attacks on Caesars Entertainment and MGM Resorts International. Scattered Spider is known for its social engineering tactics.