Promote the non-gaap eps to investors

Reference no: EM132972582

Question: Clorox's products were in high demand in 2020. Sales increased 27% during the pandemic.
Clorox Co's 3rd quarter ended March 31, 2021. On April 30, 2021, Clorox issued a news release for the 3rd quarter earnings. Clorox stated the following in the news release/investor presentation:

"The estimated range for GAAP diluted EPS for FY21 outlook is $5.94 to $6.14, compared to FY20 diluted EPS of $7.36. Excluding the noncash impairment charge to the VMS business and the noncash gain from the 2020 Saudi JV acquisition valuation remeasurement, the estimated range for non-GAAP adjusted EPS for FY21 outlook is $7.45 to $7.65."

This is the first time that Clorox has elected to use/promote the non-GAAP adjusted EPS in a news release/investor presentation.

Beyond the fact that the non-GAAP measure provides a more favorable outlook for Clorox's EPS why do you think that Clorox elected to promote the non-GAAP EPS to investors?

Reference no: EM132972582

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