What is The Clorox's gross profit margin?

What were the key takeaways from The Clorox’s earnings call?

What guidance did The Clorox's management provide for the next earnings period?

What does The Clorox do and what are its main business segments?

What is the revenue and EPS growth rate for The Clorox year over year?

Did The Clorox beat or miss consensus estimates last quarter?

What factors drove the changes in The Clorox's revenue and profit?

What is the market's earnings forecast for The Clorox next quarter?

- **Q2 Sequential Improvement**: Category growth flat to down 0.1%, with share performance in line despite elevated promotions. 
- **Innovation-Driven Growth**: H2 innovation pipeline includes allergen-fighting cleaning, Glad LeakGuard, and litter relaunch, with early January share gains. 
- **Gross Margin Outlook**: Q3 flat, Q4 expansion; full-year 25-50bp EBIT margin expansion. 
- **Consumer Trends**: Value-focused shopping, increased dollar store trips, and stock-up behavior. 
- **Strategic Moves**: Disciplined promotions to rebuild share, while protecting category value; GOJO acquisition to drive long-term health and hygiene growth.

**【CEO Summary Section】**
- CEO Linda Rendle highlighted Q2 sequential improvement, with category growth flat to down 0.1% and share performance in line with expectations. She emphasized the competitive environment, noting promotional activity at pre-COVID levels, particularly in litter and trash bags. 
- Innovation pipeline for H2 includes allergen-fighting cleaning solutions, Glad ForceFlex LeakGuard, and a relaunch of the litter business. These initiatives aim to drive share gains, with early January results showing improved share in the last week of the quarter. 
- Consumer trends show focus on value, with increased trips to dollar stores and stock-up behavior. The company is balancing price promotions with innovation to maintain profitability.

**【CFO Financial Commentary】**
- CFO Luc Bellet noted Q2 gross margin contraction due to ERP-related logistics costs, with expectations for improvement in Q3 and Q4. Full-year gross margin expansion is driven by cost savings and the termination of the Glad JV. 
- Price mix is expected to be a 1% headwind for the year, reflecting consumer channel shifts and value-seeking. 
- Advertising spend remains targeted at 11% of sales, with Q2 at 11.5% and Q3/Q4 expected to trend lower. Trade promotions are being used strategically to support innovation launches.

**【Q&A Key Highlights】**
- **Promotional Environment**: Competitive activity remains elevated, particularly in litter and trash bags. Clorox is using disciplined promotions to rebuild share while protecting category value. 
- **Gross Margin Trends**: Q3 gross margin will be flat due to lingering ERP costs, with solid expansion expected in Q4. 
- **ERP Impact**: The final phase of ERP implementation in January caused higher-than-expected shipments, but the company expects this to reverse in Q3. 
- **Household Business**: Negative volume and pricing in Q2 reflect consumer trade-up to larger sizes and channel shifts. Innovation and demand spending are key to turning the business around. 
- **GOJO Integration**: The Purell acquisition is expected to add long-term growth, with minimal distraction from core business execution.

The Clorox Company (CLX) Q2 2026 Earnings Call Transcript

- **ERP Implementation**: Successfully launched, causing 7.5-point Q1 sales headwind but enabling Q3/Q4 gross margin expansion.
- **Sales Growth**: Back-half FY26 organic sales +low single digits driven by innovations (e.g., Glad scent platform, Brita filters) and lapping negative trends.
- **Competitive Environment**: Rational competition with increased promotions in trash bags and cat litter; Clorox using price pack architecture to capture value.
- **Gross Margin**: FY26 at lower end of 38-40% range, improving in Q3/Q4 as ERP costs subside.
- **Market Share**: Q1 decline due to ERP out-of-stocks, but rebounding in October; innovation pipeline targeting back-half share recovery.

**【CEO Opening Remarks】**
- Launched new ERP system in the U.S., overcoming implementation challenges to strengthen operations and unlock value streams.
- Focused on demand creation to reinvigorate category growth, with adjustments to outlook reflecting ERP-related disruptions.

**【CFO Financial Commentary】**
- Q1 organic sales decline of 3% (excluding ERP impact), with front-half FY26 sales expected in negative low single digits and back-half in positive low single digits.
- FY26 input cost inflation reduced to $70M (from $90M), with $40M tariff headwind. Gross margin expected to expand in Q3 and Q4, despite near-term pressures.
- FY26 EPS guidance at $5.95-$6.15, with $0.90 EPS impact from ERP-related shipments.

**【Q&A Highlights】**
- **Sales Cadence**: Q2 organic sales expected in low single digits, driven by U.S. retail trends and ERP timing headwinds. Back-half growth from innovation and lapping negative trends.
- **Promotional Environment**: Rational competition, with increased promotions in certain categories (e.g., trash bags, cat litter). Clorox using price pack architecture to capture value across consumer segments.
- **Gross Margin**: FY26 gross margin at lower end of 38-40% range due to ERP expenses and demand creation investments, with improvement expected in Q3/Q4.
- **Market Share**: Q1 market share impacted by ERP-related out-of-stocks, but rebounding in October. Innovation pipeline (e.g., Glad scent platform, Brita pitcher modernization) aims to regain share in back-half.
- **Specific Categories**: Trash bags facing promotional intensity, while cat litter category growing but Clorox underperforming. Clorox prioritizing long-term value creation over short-term share gains.
- **Spending Plans**: Back-half demand creation spending adjusted for consumer behavior, with focus on ROI-driven advertising and merchandising.
- **Portfolio Strategy**: Long-term focus on core brands and disciplined portfolio management, with recent divestitures (Argentina, VMS) reducing volatility.
- **ERP Impact**: Q2 order fulfillment normalized, with minor ongoing adjustments in professional business. FY26 EPS run rate expected to exclude $0.90 ERP impact.

The Clorox Company (CLX) Q1 2026 Earnings Call Transcript

- **FY25 Results**: 8% organic growth driven by 13-14% ERP-related inventory build; underlying sales -5% vs. -3% expectation.
- **FY26 Outlook**: Organic growth -1% to +2%, gross margin flat to +50bps, adjusted EPS growth 2-4% (excluding ERP noise).
- **ERP Impact**: FY25 gross margin reduced by ~100bps; FY26 to lap ERP-related volatility with Q1/Q4 sales impacts of -14% and -3.5-4%.
- **Strategic Focus**: Innovation pipeline, net revenue management, and ERP stabilization to drive FY26+ growth.
- **Long-Term Vision**: 18% operating margin achievable post-ERP; FY27+ targeting 3-5% organic growth through category reinvigoration.

**【CEO Summary Section】**
- Q4 FY25 organic sales growth of 8%, with 13-14% driven by ERP-related inventory build at retailers. Excluding this, underlying sales were -5% vs. -3% expected.
- FY25 gross margin improved due to cost management, but Q4 saw higher-than-expected margin impact (-150bps vs. -50bps guidance) from ERP-related operating leverage.
- FY26 outlook: Organic growth -1% to +2%, gross margin flat to +50bps, adjusted EPS growth 2-4% (excluding ERP noise).
- Key initiatives: Innovation pipeline (back-half 2026), net revenue management, and ERP stabilization.

**【CFO Financial Commentary】**
- FY25 GAAP net income: $420M; Non-GAAP EPS: $1.08 (vs. $0.95 prior year).
- FY25 operating expenses down 5% YoY due to cost control.
- ERP impact: FY25 gross margin reduced by ~100bps; FY26 expected to lap ERP-related sales volatility.
- Tariffs: $40M incremental cost in FY26, partially offset by sourcing, reformulation, and strategic pricing.

**【Q&A Key Highlights】**
- **ERP Transition**: U.S. implementation complete but still in ramp-up phase; FY26 Q1 and Q4 will see year-over-year sales impacts of -14% and -3.5-4%, respectively.
- **Consumer Behavior**: Smaller size buying trends and channel shifts driving promotional activity adjustments.
- **Kingsford Performance**: Q4 execution issues (e.g., Memorial Day merchandising) but July improvement; innovation pipeline to address size preferences.
- **Long-Term Targets**: 18% operating margin achievable post-ERP stabilization; FY27+ focus on 3-5% organic growth through category reinvigoration and share gains.
- **Digital Investment**: $0.35 EPS of one-time ERP-related costs in FY25; FY26+ to return to normal R&D and CapEx levels.

The Clorox Company (CLX) Q4 2025 Earnings Call Transcript

- **Resilient Performance**: 10th consecutive quarter of gross margin expansion despite category declines, no significant private label trade-down.
- **Tariff Impact**: $100M annual tariff impact, with $10-20M in Q4 FY25; ERP transition adds 2-3% FY25 organic sales headwind.
- **Consumer Trends**: Consumers prioritize convenience (e.g., premium products) and value, with no long-term trade-down risk observed.
- **Margin Confidence**: Tools like price-pack architecture and ERP-driven efficiency will sustain margin expansion beyond FY25.

**【CEO Opening Remarks】**
- Despite macroeconomic challenges, the company maintained market share and delivered the 10th consecutive quarter of gross margin expansion.
- Consumer sentiment weakened in mid-February, leading to category declines, but no significant trade-down to private label observed.
- Fiscal year 2025 outlook reflects cautious consumer behavior, with continued focus on reinvesting in brands and innovation.

**【CFO Financial Insights】**
- Tariffs are expected to impact gross margin with a 12-month run rate of $100 million, with $10-20 million affecting Q4 FY25.
- ERP transition will drive 1.5 weeks of inventory build in Q4, impacting organic sales by 2-3% for the full year.
- Gross margin for Q4 is expected to remain stable at ~44%, aligning with the full-year average of 44.5%.

**【Key Q&A Highlights】**
- **Consumer Behavior**: No trade-down to private label; consumers prioritize convenience and value (e.g., smaller sizes, premium innovations like Bahama Bliss trash bags).
- **Tariff Mitigation**: Limited exposure to tariffs, with strategies including supply chain adjustments and targeted pricing.
- **ERP Transition**: Retailers are building inventory ahead of the ERP go-live, with the majority of inventory adjustments reversing in Q1 FY26.
- **Margin Management**: Holistic margin management tools (e.g., price-pack architecture) will help offset headwinds and maintain margin expansion trajectory.


The Clorox Company (CLX)-5 May 25-2025 Q3 Earnings call transcript

- **Gross Margin Recovery Confirmed**: On track for 44% FY25, with 25-50bps EBIT margin expansion starting FY26.
- **ERP-Driven Growth**: Q4 FY25 organic sales +mid-high single digits, reversing in FY26 front-half.
- **Competitive Resilience**: Glad share growth despite elevated promotions; private label share stable/down.
- **International Momentum**: +10%+ organic sales driven by Cleaning and new market entries.
- **Cash Flow Strength**: FY25 free cash flow ~11-13% of sales, with FY26+ upside from ERP savings.

**【CEO Opening Remarks】**
- Announced CFO transition: Kevin Jacobsen retiring, Luc Bellet stepping into CFO role starting April 1, 2025.
- Highlighted Kevin's 30-year contribution to Clorox's IGNITE strategy and transformation.
- Confirmed confidence in achieving 44% gross margin target for FY25 and 25-50bps EBIT margin expansion starting FY26.

**【CFO Financial Update】**
- Q2 FY25 organic sales down 9.5% vs. guidance of low-teens decline, driven by strong demand creation and Kingsford shipment timing.
- Gross margin recovery on track, with FY25 target of 44% achievable.
- FY25 EPS guidance raised to $5.20-$5.40 (from $5.10-$5.40), reflecting ERP-related benefits and tax rate improvement.
- FY26 outlook includes 1-2pts of organic sales growth from ERP transition, offsetting front-half inventory normalization.

**【Q&A Key Themes】**
1. **Gross Margin Expansion**: 
   - Confident in FY25 44% target, with FY26+ EBIT margin expansion via productivity (ERP), design-to-value, and net revenue management.
   - FY25 supply chain inflation lower than expected, offsetting 1pt FX headwind.

2. **ERP Transition Impact**: 
   - Q4 FY25 organic sales +mid-high single digits (vs. Q3 low single digits), driven by 1-2pts ERP-related shipment.
   - FY26 front-half will reverse this benefit, with no long-term margin impact.

3. **Competitive Dynamics**: 
   - Glad trash bag category seeing elevated promotions, but Clorox growing share via innovation (e.g., Bahama Bliss).
   - Litter category promotional environment normalized to pre-COVID levels.
   - Private label share stable or declining across core categories.

4. **Tariffs & Supply Chain**: 
   - Minimal exposure due to nearshored manufacturing; no tariffs baked into FY25 guidance.
   - Flexibility to adjust promotions based on competitive activity (e.g., Glad spending increased in Q2).

5. **International Growth**: 
   - International organic sales +10%+ driven by Cleaning category strength and new market entries (e.g., Cat Litter in Europe/Asia).
   - Professional business +mid-single digits via new verticals (government, healthcare).

6. **Cash Flow & Capital Allocation**: 
   - FY25 free cash flow ~11-13% of sales, with FY26+ upside from ERP cost savings.
   - $50-100M cash impact from ERP transition in Q4 FY25, fully reversing in FY26.
   - Glad JV buyback ($530M fair value) to occur FY26, unlocking 20% margin expansion.


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