Clorox stock fell 14% on Friday after the firm changed its outlook, projecting a greater drop in yearly profits and margins than previously expected.

Commodity, manufacturing, and logistics are to blame, with transportation and commodity expenses expected to reach $500 million this year, according to the company's conference call. Even while the business expects revenue to fall 1-4% this year, compared to an earlier prediction of a 2-6% reduction, the loss in earnings will occur.Cleaning Products, Disinfecting Wipes, Bleach | Clorox®

Cleaning chemicals, salad dressings, and health and wellness items are all part of Clorox's product line. Inflation in the cost of obtaining raw materials for those items, transportation-related supply-chain challenges, and a surge in demand over the last two years have all contributed to the increase in demand. As a result, the business has been under strain for the past two years, as demand for its products increased dramatically during the pandemic, while supply lines were stretched. It required time to receive raw materials and subsequently its own output.

To offset the cost increase, CFO Kevin Jacobson said on the conference call that the business will cut expenses and raise pricing on 85% of its portfolio by the end of the fiscal year in June. This is in contrast to a previous proposal to hike prices on 70% of Clorox's products. In the company's fiscal year 2023, the price hikes will have a greater impact.

Clorox now forecasts a 750-basis-point drop in gross margin to 36.1%, down from its previous prediction of a 300-400-basis-point drop.

The adjusted profit per share is expected to be between $4.25 and $4.5, compared to $5.4-$5.7 in the previous prediction.