The Clorox 2025 Q4 Earnings Strong Performance as Net Income Surges 52%

The Clorox reported its fiscal 2025 Q4 earnings on July 31st, 2025. The company witnessed a 4% increase in net sales, largely driven by ERP-related inventory building, and a remarkable 55% rise in diluted EPS to $2.68. Adjusted EPS grew by 58% to $2.87. Looking ahead, Clorox anticipates a 6-10% decline in net sales for FY26 due to the reversal of ERP benefits. Guidance for adjusted EPS falls between $5.95 and $6.30, reflecting anticipated challenges.

Revenue
The Clorox's total revenue for the fourth quarter of fiscal 2025 rose by 4.5% year-over-year, reaching $1.99 billion compared to $1.90 billion in the same period of 2024. The Health and Wellness segment contributed $741 million, showcasing robust performance, while the Household segment generated $639 million. The Lifestyle segment provided $339 million, and the International segment added $269 million, culminating in the total revenue of $1.99 billion.

Earnings/Net Income
In fiscal 2025 Q4, The Clorox's earnings per share (EPS) rose significantly by 55.2% to $2.70, compared to $1.74 in fiscal 2024 Q4, demonstrating substantial earnings growth. The company also achieved a net income of $336 million for the quarter, marking a 52.0% increase from $221 million in the previous year. The EPS indicates strong financial performance and resilience.

Price Action
The stock price of The Clorox slightly declined by 0.73% during the latest trading day. Over the past week, it fell by 4.46%, while month-to-date, the stock has seen a 4.57% increase.

Post-Earnings Price Action Review
The post-earnings strategy of purchasing CLX stock following an earnings beat and holding for 30 days resulted in notable underperformance, yielding a total return of -34.54% against a benchmark return of 85.57%. Although the strategy did not experience any significant losses, as indicated by a maximum drawdown of 0.00%, it exhibited high risk and volatility, evidenced by a Sharpe ratio of -0.33 and volatility of 24.57%. This highlights the challenges faced by investors implementing this strategy despite the absence of significant losses. The high volatility and negative Sharpe ratio suggest that the strategy may not be optimal in the current market environment.

CEO Commentary
"While we delivered strong margin expansion and adjusted EPS growth for the year, we did not meet our topline expectations in the back half. We continued to see rapidly shifting consumer behaviors and broader market volatility which we expect to continue," said Chair and CEO Linda Rendle. She emphasized the advancement of the long-term strategy and the implementation of the new ERP system in the U.S., which supports financial goals through modernized capabilities. Rendle expressed confidence in the company's strategy, the resilience of its brand portfolio, and its ability to provide value to consumers, customers, and shareholders over the long term.

Guidance
Looking ahead to fiscal year 2026, the company expects to focus on operational excellence and driving category and market share improvements. The CEO indicated that the company remains committed to advancing its long-term strategy, emphasizing the need to navigate rapidly changing market conditions and consumer behaviors. The expectation is to leverage the new ERP system to enhance growth and efficiencies, reinforcing confidence in the potential for long-term value creation.

Additional News
In recent developments, The Clorox Company announced an increase in its quarterly dividend from $1.22 to $1.24 per share, effective August 29, 2025, for shareholders of record as of August 13, 2025. This decision reflects Clorox’s commitment to delivering consistent value to its shareholders through regular dividend payments and annual increases. Additionally, Clorox has been recognized as one of America's Greatest Workplaces by Newsweek, highlighting its dedication to fostering a positive work environment. As part of its strategic initiatives, Clorox continues to invest in digital transformation and product innovation to strengthen its market position.