OAKLAND, Calif., Nov. 3, 2025 /PRNewswire/ -- The Clorox Company (NYSE:CLX) today reported results for the first quarter of fiscal year 2026, which ended September 30, 2025.
First-Quarter Fiscal Year 2026 Summary
Following is a summary of key results for the first quarter, which reflects the impact from incremental shipments associated with the enterprise resource planning transition in the U.S. (incremental ERP shipments) in the prior fiscal year and the prior divestiture of the Better Health Vitamins, Minerals and Supplements (VMS) business. All comparisons are with the first quarter of fiscal year 2025 unless otherwise stated.
At the end of the fourth quarter of fiscal year 2025, the company shipped about two weeks of inventory ahead of consumption as retailers built up stock in anticipation of its ERP transition. As retailers drew down on these inventories this quarter, it resulted in year-over-year shipment decline.
Net sales decreased 19% to $1.43 billion, primarily driven by lower shipments related to the ERP transition. Organic sales1 decreased 17%, driven mainly by lower volume related to its ERP transition.
Gross margin decreased 410 basis points to 41.7% from 45.8% in the year-ago quarter, primarily driven by lower volume and higher manufacturing and logistics costs, partially offset by cost savings.
Diluted net earnings per share (diluted EPS) decreased 19% to $0.65 from $0.80 in the year-ago quarter, primarily due to lower net sales in the current period and partially offset by the loss relating to the divestiture of the Better Health VMS business in the prior period.
Adjusted EPS1 decreased 54% to $0.85 from $1.86 in the year-ago quarter, primarily due to lower net sales related to its ERP transition.
Year-to-date net cash provided by operations was $93 million compared to $221 million in the year-ago period, representing a 58% decrease, primarily due to the impact of its ERP transition.
"This quarter's ERP launch marks a significant milestone in our transformation journey, empowering faster execution, greater productivity, and deeper insights, all aimed at delivering superior value to our consumers," said Chair and CEO Linda Rendle "As with any rollout of this scale, we experienced some temporary disruptions that affected our market share. With the majority of the rollout now behind us, our focus is now squarely on accelerating profitable growth through innovation and strong demand-creation initiatives in the second half of this fiscal year. Leveraging our rich consumer insights and new advanced digital tools, we're well positioned to drive growth and continue delivering superior value even as consumers navigate ongoing uncertainty and volatility."
This press release includes certain non-GAAP financial measures. See "Non-GAAP Financial Information" at the end of this press release for more details.
1Organic sales growth / (decrease) and adjusted EPS are non-GAAP measures. See Non-GAAP Financial Information at the end of this press release for reconciliations to the most comparable GAAP measures.
Strategic and Operational Highlights
The following are recent strategic and operational highlights:
Introduced new products inspired by emerging consumer trends that deliver superior value, including Clorox Screen+ Sanitizing Wipes, Glad ForceFlex Apple Cinnamon scented trash bags, Hidden Valley Ranch Dippers & Toppers, as well as platform-expanding innovations like the Burt's Bees Lip Milk, and Boosted Body Daily Lotion, Whipped Butter and Moisturizing Melt.
Successfully completed the first two phases of its U.S. ERP implementation and is on track to finish the third and final phase this winter. The company is well positioned to accelerate its digital transformation through productivity gains and better insights, all in service of delivering clearly superior experiences to consumers.
The Clorox brand received Kantar's Outstanding Innovation Award, while the company was named among America's Greatest Companies and the World's Most Trustworthy Companies by Newsweek, as well as one of the World's Top Companies for Women by Forbes.
Key Segment Results
The following is a summary of key first-quarter results by reportable segment. All comparisons are with the first quarter of fiscal year 2025 unless otherwise stated.
Net sales decreased 19%, driven by 18 points of lower volume and about 1 point of unfavorable price mix. Lower volume was mainly driven by shipment decline as retailers drew down on the incremental inventory they built in advance of its ERP transition in the fourth quarter of last fiscal year.
Health and Wellness (Cleaning; Professional Products)
Net sales decreased 19%, driven by 16 points of lower volume and 3 points of unfavorable price mix. The volume decrease was primarily due to lower shipments related to the ERP transition. Unfavorable price mix was primarily driven by strong shipments to the Club channel.
Segment adjusted EBIT2 decreased 47%, primarily due to lower net sales and higher manufacturing and logistics costs.
Household (Bags and Wraps; Cat Litter; Grilling)
Net sales decreased 19%, driven by 18 points of lower volume and 1 point of unfavorable price mix. Lower volume was primarily due to lower shipments related to the ERP transition.
Segment adjusted EBIT decreased 55%, primarily due to lower net sales.
Lifestyle (Food; Water Filtration; Natural Personal Care)
Net sales decreased 23%, driven by 22 points of lower volume driven mainly by lower shipments related to the ERP transition and 1 point of unfavorable price mix.
Segment adjusted EBIT decreased 42%, primarily due to lower net sales, partially offset by lower advertising investments as compared to the prior period.
International (Sales Outside the U.S.)
Net sales decreased 2%, mainly driven by lower volume, primarily due to lower shipments related to the ERP transition. Organic sales decreased 2%.
Segment adjusted EBIT decreased 46%, mainly driven by higher manufacturing and logistics costs.
2 Adjusted EBIT is a non-GAAP measure. See Non-GAAP Financial Information at the end of this press release for reconciliations to the most comparable GAAP measures.
ERP Transition Impact
During the fourth quarter of fiscal year 2025, retailers placed orders in advance of the company's ERP system transition in the U.S. to minimize any potential inventory impacts during the implementation phase. During the first quarter of fiscal year 2026, retailers depleted this inventory, resulting in lower shipments. From a year-over-year sales growth perspective, the reduction in sales from this inventory draw down translates to about 7.5 points of decline in fiscal year 2026 as compared to the higher base in fiscal year 2025. Inventory draw down is expected to reduce fiscal year 2026 earnings per share by about 90 cents. In comparison to the higher base in fiscal year 2025, this results in a year-over-year reduction of about 30% to fiscal year 2026 diluted earnings per share and about 23% to fiscal year 2026 adjusted earnings per share.
Fiscal Year 2026
Net sales (percentage change versus the year ago period)
Three months ended
9/30/2025
Net sales growth / (decrease) (GAAP)
(19) %
Add: Foreign Exchange
—
Add/(Subtract): Divestitures/acquisitions
2
Organic sales growth / (decrease) (non-GAAP)
(17) %
Note: Approximate impact from incremental shipments related to ERP transition
(14) %
Diluted earnings per share
Three months ended
9/30/2025
As reported (GAAP)
$ 0.65
Digital capabilities and productivity enhancements investment
0.20
As adjusted (non-GAAP)
$ 0.85
Note: Approximate impact from incremental shipments related to ERP transition
$ (0.90)
Fiscal Year 2026 Outlook
The company is maintaining its full year outlook for net sales, gross margin and adjusted EPS. The impact of the order fulfillment challenges experienced earlier in the year, which led to consumption and market share losses, keeps the company's current expectations towards the lower end of the range. This guidance also reflects slightly lower input costs and a strengthened demand creation plan to support share and sales growth in the second half of the fiscal year.
The company is confirming the following elements of its fiscal year 2026 outlook:
The company still expects net sales to be down 6% to 10%, including less than a point of negative impact from the divestiture of its VMS business and foreign exchange rate changes. Organic sales are still expected to decrease 5% to 9%, including a negative impact of about 7.5 points related to the reversal of the impact from incremental shipments associated with the ERP transition in the prior year.
Gross margin is still expected to be down 50 to 100 basis points. The reversal of the impact from incremental shipments associated with ERP transition in the prior fiscal year is expected to result in about 100 basis points of headwinds.
Selling and administrative expenses are still expected to be about 16% of net sales. It continues to include about 90 basis points of impact from the company's strategic investments in digital capabilities and productivity enhancements.
Advertising and sales promotion spending is still expected to be about 11% of net sales, reflecting the company's ongoing commitment to invest behind its brands.
The company's effective tax rate is still expected to be about 24%.
Fiscal year diluted EPS is still expected to be between $5.60 and $5.95, a year-over-year decrease of 14% to 9%, respectively. This includes the negative impact of about 90 cents related to the reversal of the impact from incremental shipments associated with the ERP transition in the prior fiscal year.
Adjusted EPS is still expected to be between $5.95 and $6.30, or a decrease between 23% and 18%, respectively. Adjusted EPS excludes the long-term strategic investment in digital capabilities and productivity enhancements, estimated to be about 35 cents. This includes the negative impact of about 90 cents related to the reversal of the impact from incremental shipments associated with the ERP transition in the prior fiscal year.
Net sales (percentage change versus the year ago period)
Fiscal year 2025full year
Fiscal year 2026 full year outlook
Impact
Low
High
Net sales growth / (decrease) (GAAP)
0 %
(10) %
(6) %
Add: Foreign Exchange
—
—
—
Add/(Subtract): Divestitures/acquisitions
5
<1
<1
Organic sales growth / (decrease) (non-GAAP)
5 %
(9) %
(5) %
Note: Approximate impact from incremental shipments related to ERP transition
3.5 %
(7.5) %
(7.5) %
Diluted earnings per share
Fiscal year 2025 full year
Fiscal year 2026 full year outlook
Impact
Low
High
As estimated (GAAP)
$ 6.52
$ 5.60
$ 5.95
Loss on divestiture
0.94
—
—
Cyberattack costs, net of insurance recoveries
(0.42)
—
—
Digital capabilities and productivity enhancements investment
0.68
0.35
0.35
As adjusted (non-GAAP)
$ 7.72
$ 5.95
$ 6.30
Note: Approximate impact from incremental shipments related toERP transition
$ 0.90
$ (0.90)
$ (0.90)
Clorox Earnings Conference Call Schedule
At approximately 4:15 p.m. ET today, Clorox will post prepared management remarks regarding its first quarter fiscal year 2026 results.
At 5 p.m. ET today, the company will host a live Q&A audio webcast with Chair and CEO Linda Rendle and Chief Financial Officer Luc Bellet to discuss the results.
Links to the live (and archived) webcast, press release and prepared remarks can be found at Clorox Quarterly Results.
For More Detailed Financial Information
Visit the company's Quarterly Results for the following:
Supplemental unaudited volume and sales growth information
Supplemental unaudited gross margin drivers information
Supplemental unaudited cash flow information and free cash flow reconciliation
Supplemental unaudited reconciliation of earnings before interest and taxes (EBIT) and adjusted EBIT
Supplemental unaudited reconciliation of adjusted earnings per share (EPS)
Note: Percentage and basis-point, or point, changes noted in this press release are calculated based on rounded numbers, except for per-share data and the effective tax rate.
About The Clorox Company
The Clorox Company (NYSE:CLX) champions people to be well and thrive every single day. Its trusted brands include Brita®, Burt's Bees®, Clorox®, Fresh Step®, Glad®, Hidden Valley®, Kingsford®, Liquid-Plumr® and Pine-Sol® as well as international brands such as Chux®, Clorinda® and Poett®. Headquartered in Oakland, California, since 1913, Clorox was one of the first U.S. companies to integrate sustainability into its business reporting. In 2025 the company was ranked No. 1 on Barron's 100 Most Sustainable Companies list for the third consecutive year. Visit thecloroxcompany.com to learn more.
CLX-F
Forward-Looking StatementsThis press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and any such forward-looking statements involve risks, assumptions and uncertainties. Except for historical information, statements about future volumes, sales, organic sales growth, foreign currencies, costs, cost savings, margins, earnings, earnings per share, diluted earnings per share, foreign currency exchange rates, tax rates, cash flows, plans, objectives, expectations, growth or profitability are forward-looking statements based on management's estimates, beliefs, assumptions and projections. Words such as "could," "may," "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," "will," "predicts," and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic and financial performance are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed. Important factors that could affect performance and cause results to differ materially from management's expectations, are described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2025, as updated from time to time in the company's Securities and Exchange Commission filings. These factors include, but are not limited to: unfavorable general economic and geopolitical conditions beyond our control, including inflation, supply chain disruptions, labor shortages, wage pressures, fuel and energy costs, interest rate fluctuations, foreign currency exchange rate fluctuations, weather events or natural disasters, disease outbreaks or pandemics, terrorism, and unstable geopolitical conditions, including ongoing conflicts and rising tensions in the Middle East and/or Ukraine and rising tensions between China and Taiwan, as well as macroeconomic and geopolitical volatility and uncertainty as a result of a number of these and other factors, including actual and potential shifts in U.S. and foreign trade policies, including as a result of escalating trade tensions between the U.S. and its trading partners, especially China, particularly as a result of the imposition of U.S. and retaliatory tariffs; the impact of market and category declines, and the company's product and geographic mix on its ability to meet sales growth targets; the company's ability to successfully execute or realize the anticipated benefits of its strategic or transformational initiatives, including the ERP transition and the related timing and volume of shipment movement related to the ERP transition; the impact of the changing retail environment, including the growth of alternative retail channels and business models, and changing consumer preferences; intense competition in the company's markets; volatility and increases in the costs of raw materials, energy, transportation, labor and other necessary supplies or services; risks related to supply chain issues, product shortages and disruptions to the business, as a result of increased supply chain dependencies due to an expanded supplier network and a reliance on certain single-source suppliers; risks related to the company's use of and reliance on information technology systems, including potential and actual security breaches, cyberattacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, customer, employee or company information, business, service or operational disruptions, or that impact the company's financial results or financial reporting, or any resulting unfavorable outcomes, increased costs or legal proceedings; the ability of the company ...
