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CLX
The Clorox Company
Earnings
CLX | Earnings Review
The Clorox Company | FY26 Q3 (Jan-Mar 2026) reported April 30, 2026 AMC | Analysis date: May 7, 2026 | Daloopa company_id 332
Q3 Print
BEAT (not miss)
Adj EPS $1.64 vs $1.48 cons (+11%); Revenue $1.67B in-line; +13% YoY EPS — turnaround from FY26Q1 trough
Organic Sales
-1% (stabilized)
Sequential improvement: -17% Q1 → -1% Q2 → -1% Q3; Household +3%, Intl +2%, H&W flat, Lifestyle -9% (laggard)
FY26 Guide CUT
Adj EPS $5.45-5.65
Cut from $5.95-6.30 (-$0.58 mid); ~$0.40-0.50 below ~$5.95-6.05 Street; GM cut to -250 to -300 bps (vs -100 prior)
Stock Reaction
Crushed on guide
$84-92 from $138 high; print itself was a beat — guide drove the move (oil/Mid-East $20-25M Q4, GOJO inventory step-up, ERP slippage)
The print was a beat; the guidance cut crushed the stock. Adj EPS $1.64 beat $1.48 consensus by +11%; Revenue $1.67B in-line ($1.667B Street); Adj EBIT margin 17.7% (+180 bps YoY); FCF $311M — best in 9 quarters (+33% YoY). Top line stabilizing at flat: organic -1% with sequential improvement (-17% → -1% → -1%). Segment mix: Household $482M +2.8% (first growth since FY25Q4); International $285M +8.4% reported / +2% organic (FX tailwind); H&W $629M flat; Lifestyle $277M -9.5% (the laggard — 3 consecutive declines on Burt's Bees + Hidden Valley + Brita softness). Guide cut is the wound: FY26 Adj EPS $5.45-5.65 (mid $5.55) vs prior $5.95-6.30 (mid $6.13) — cut ~$0.58 at mid, ~$0.40-0.50 below ~$5.95-6.05 Street. Organic sales now -9% point estimate (vs -5% to -9% range, mid ~-7% prior) — net sales mechanically helped by ~3 pts GOJO add. Adj GM cut to down 250-300 bps vs prior down ~100 bps (~175 bps worse mid). Drivers of guide cut (~$0.90 cumulative EPS headwind): (1) Middle East oil at $100/bbl assumption = $20-25M Q4 hit / ~130 bps GM; (2) GOJO consolidation: $200M Q4 sales but EBITDA neutral Y1 + 50 bps onetime inventory step-up; (3) ERP cost-save slippage from FY26 to FY27; (4) 50 bps onetime accelerated cost-save project. Push-back on bear narratives: Mgmt explicitly: "no broad retailer destock" — TDPs +5%; private label NOT accelerating except Brita (rejects JPM structural-share-loss thesis). Real drivers: ERP pull-forward reversing, Litter Fresh Step reset bumpiness, weaker Food category (mid-SD vs low-SD expected — first explicit GLP-1 callout). Tone: most defensive in 4 calls — explicit acknowledgment results "fell short of expectations." Pricing posture shifted from "selective targeted price" to RGM/PPA-led with explicit caution on list pricing. FY27 setup: mechanical +$0.90 EPS tailwind from ERP shipment reversal locked in; offsets include $75-100M annualized oil hit, GOJO interest +$110M incremental, Y1-neutral GOJO EBITDA. Old "~$7 normalized EPS exit" framing now ~$6.45 implied. Two material contradictions across 4 transcripts: (1) EBIT margin path — Q4'25 promised ~18% "essentially next year" with +25-50 bps cadence vs Q3'26 GM cut to -250 to -300 bps and savings deferred into FY27; (2) ERP status — Q4'25/Q1'26 "exceptionally well" / "through the hard part" vs Q3'26 admits costs lingered through 3 quarters and materially delayed savings. Watch: (1) Aug 2026 FY27 guide (largest single event); (2) oil/Middle East trajectory; (3) Litter (Fresh Step) UPC conversion at retailers; (4) GOJO Y1 dilution path; (5) Brita private-label watch.
Key Metrics Trends
| Metric | FY24 Q3 | FY24 Q4 | FY25 Q1 | FY25 Q2 | FY25 Q3 | FY25 Q4 | FY26 Q1 | FY26 Q2 | FY26 Q3 |
|---|---|---|---|---|---|---|---|---|---|
| Health & Wellness ($M) | $609M | $652M | $698M | $628M | $630M | $741M | $565M | $643M | $629M |
| Health & Wellness ($M) YoY % | - | - | - | - | +3.4% | +13.7% | -19.1% | +2.4% | -0.2% |
| Household ($M) | $526M | $597M | $447M | $446M | $469M | $639M | $362M | $419M | $482M |
| Household ($M) YoY % | - | - | - | - | -10.8% | +7.0% | -19.0% | -6.1% | +2.8% |
| Lifestyle ($M) | $315M | $328M | $320M | $338M | $306M | $339M | $245M | $321M | $277M |
| Lifestyle ($M) YoY % | - | - | - | - | -2.9% | +3.4% | -23.4% | -5.0% | -9.5% |
| International ($M) | $310M | $271M | $259M | $274M | $263M | $269M | $253M | $294M | $285M |
| International ($M) YoY % | - | - | - | - | -15.2% | -0.7% | -2.3% | +7.3% | +8.4% |
| Net sales ($M) | $1.8B | $1.9B | $1.8B | $1.7B | $1.7B | $2.0B | $1.4B | $1.7B | $1.7B |
| Net sales ($M) YoY % | - | - | - | - | -8.0% | +4.5% | -18.9% | -0.8% | +0.1% |
| Gross margin % | 42.2% | 46.5% | 45.8% | 43.8% | 44.6% | 46.5% | 41.7% | 43.2% | 43.2% |
| Gross margin % YoY chg (bps) | - | - | - | - | +240 | +0 | -410 | -60 | -140 |
| Adj EBIT margin % | 14.3% | 16.2% | 18.8% | 15.3% | 15.9% | 23.1% | 11.2% | 15.3% | 17.7% |
| Adj EBIT margin % YoY chg (bps) | - | - | - | - | +160 | +690 | -760 | +0 | +180 |
| Adj EPS ($) | $1.71 | $1.82 | $1.86 | $1.55 | $1.45 | $2.87 | $0.85 | $1.39 | $1.64 |
| Adj EPS ($) YoY % | - | - | - | - | -15.2% | +57.7% | -54.3% | -10.3% | +13.1% |
| Free Cash Flow ($M) | $127M | $259M | $182M | $127M | $233M | $219M | $57M | $269M | $311M |
| Free Cash Flow ($M) YoY % | - | - | - | - | +83.5% | -15.4% | -68.7% | +111.8% | +33.5% |
_Trajectory: distorted by 3 event windows; underlying organic flat-to-down LSD across 7 of 8 quarters. (1) Aug-2023 cyberattack lap inflated FY25Q1 to +27% sales / +280% EPS, then deflated FY26Q1; (2) ERP transition load/de-load inflated FY25Q4 to 23.1% margin / +58% EPS, deflated FY26Q1 to 11.2% margin / -54% EPS. Once distortions stripped: underlying organic flat-to-down LSD; FY26Q3 prints ~0% reported / -1% organic — the most recent quarter does NOT yet constitute an inflection in organic. Lifestyle is the structural laggard — 8 straight negative organic quarters, trough -23%, most recent -9% (Burt's Bees, Brita, Hidden Valley). International quietly bright — positive organic in 7 of 8 quarters despite Argentina exit. Margin self-help working: FY26Q3 Adj EBIT margin 17.7% (+180 bps YoY) is cleanest print in window; Adj EPS $1.64 +13% is first positive ex-anomaly in 4 quarters. Verdict: Margin-driven, volume-stalled. Quality of compounding mediocre. FY26 H2 comps will improve optically but underlying LSD-decline profile unchanged._
Beat/Miss
Guidance
Catalysts
Street Q&A
Contradictions
Read-Throughs
This Quarter vs Consensus
| Metric | Consensus | Actual | Variance | Read |
|---|---|---|---|---|
| Adj EPS | $1.48 | $1.64 | +$0.16 / +10.8% | Beat — +13% YoY |
| Revenue | ~$1.667B | $1.670B | +$3M / In-line | +0.1% YoY (flat) |
| Total organic sales | — | -1% | — | Sequential improvement: -17% → -1% → -1% |
| Household segment | — | $482M +2.8% | — | Inflected positive — first growth since FY25Q4 |
| Lifestyle segment | — | $277M -9.5% | — | 3 consecutive declines |
| International segment | — | $285M +8.4% | — | +2% organic, FX tailwind |
| Adj EBIT margin | — | 17.7% | +180 bps YoY | Margin recovery |
| Free cash flow | — | $311M | +33% YoY | Best in 9 Q |
| FY26 Adj EPS guide | $5.95-6.05 Street | $5.45-5.65 (mid $5.55) | -$0.40-0.50 / -7% | MISS — drives -10%+ stock |
| L8Q Adj EPS beat rate | — | 75% (6/8) | — | Sell-side bars conservatively post-cyber |
| L8Q Revenue beat rate | — | 50% (4/8) | — | Mixed |
| L4Q Adj EPS beat rate | — | 75% | — | Beat-and-fade pattern |
| L4Q Revenue beat rate | — | 75% | — | Stock no longer pays for beats |
Pattern: Beat-and-fade. Stock trades the forward narrative (ERP, GOJO, costs), not the backward print. EPS beats 6/8 L8Q with sell-side bars set conservatively post-cyberattack, but stock no longer pays for beats; market trades the forward narrative. Mgmt's variance framing pushes back on bear-case narratives: (1) NO broad retailer destocking — TDPs +5%; channel issues are ERP-related not channel-health-related; (2) Private label NOT accelerating — "did not increase this quarter" — only Brita flagged; rejects JPM structural-share-loss thesis. Real drivers: ERP pull-forward reversing (~7.5 ppts / $0.90 FY26), Litter Fresh Step reinvention bumpiness (UPC hard conversion + suboptimal shelf placement at key retailers), weaker-than-expected Food category (mid-SD decline vs low-SD expected, GLP-1 watch), and rising oil/logistics input costs. JPMorgan downgraded to UW pre-print; GS/UBS/MS cut PTs after.
Guidance Deep Dive
| Metric | Prior Guide (Q2 FY26) | New Guide (Q3 FY26) | vs Prior | Street Pre-Print | vs Street | Read |
|---|---|---|---|---|---|---|
| FY26 Adj EPS | $5.95-6.30 (mid $6.13) | $5.45-5.65 (mid $5.55) | -$0.58 / -9.5% | ~$5.95-6.05 | -$0.40-0.50 / -7% | Drives stock |
| FY26 Organic Sales | -5% to -9% (mid ~-7%) | -9% point estimate | -200 bps | — | — | Net sales mechanically +3 pts from GOJO |
| FY26 Adj GM | Down ~100 bps | Down 250-300 bps | -175 bps | — | — | Oil + GOJO + ERP slippage |
| Mid-East / oil hit Q4 | n/a | $20-25M / ~130 bps GM at $100/bbl | New | — | — | Newest, largest risk |
| GOJO Y1 dilution | n/a | EBITDA neutral + 50 bps onetime inventory step-up | New | — | — | $50M+ run-rate synergies starting Y2 |
| GOJO Q4 sales | n/a | +$200M (+10%) | New | — | — | 80% B2B mix |
| FY27 Adj EPS framework | Old: "exit FY26 at ~$7 normalized" | Implied ~$6.45 | Lowered | — | — | Aug 2026 guide is the next print |
| FY27 ERP shipment reversal tailwind | n/a | +$0.90 EPS locked in | New | — | — | Mechanical reversal of FY26 destock |
| FY27 GOJO interest expense | n/a | +$110M incremental | New | — | — | Headwind |
| FY27 oil annualized risk | n/a | $75-100M at sustained $100/bbl | New | — | — | Mgmt resisted simple annualization |
| Tariffs | $40M | $40M (unchanged) | Maintained | — | — | — |
| Brand investment % of sales | 11% | 11% | Maintained | — | — | Composition shifted |
| Pricing posture | Selective targeted price | RGM/PPA-led with caution on list pricing | Defensive shift | — | — | Glass test live |
| Net debt / EBITDA target post-GOJO | — | Deleverage to ≤3.0x priority | New | — | — | — |
| Dividend streak | 48-50 years | Continued (Dividend King 2027 on track) | Maintained | — | — | — |
Tone: most defensive in 4-call sequence — explicit acknowledgment results "fell short of expectations." Trajectory: optimistic about back-half innovation ramp (Q4'25 / Q1-Q2 FY26) → defensive (Q3 FY26). Litter execution behind plan. Cost environment worse. Pricing posture shifted from "selective targeted price" to RGM/PPA-led with explicit caution on list pricing because of consumer stress. Glass test successful, more tests live in coming weeks. FY27 guide: punted hard ("too early," "wide range of scenarios") — Aug 2026 is THE event. Knowns: ~150 bps ERP cost lap tailwind, ~50 bps GOJO GM dilution, +$110M FY27 interest, oil TBD. Top risks: (1) Middle East oil — newest and largest; (2) Litter execution / multi-year recovery; (3) GOJO Y1 margin dilution; (4) Brita/Bleach private-label watch (overall PL is benign); (5) tariffs ($40M, unchanged); (6) modest retailer inventory adjustments — no broad destocking. Portfolio reviews ongoing but mgmt frames execution, not pruning, as priority.
Upcoming Catalysts
| # | Catalyst | Timing | What to Watch | Read |
|---|---|---|---|---|
| 1 | Aug 2026 FY27 guide | Aug 2026 (next print) | Single biggest event; mgmt punted hard. ERP shipment reversal +$0.90 EPS tailwind, $75-100M oil risk, GOJO Y1 neutral, +$110M interest | Largest single catalyst |
| 2 | Oil / Middle East cost shock | Through FY26-FY27 | $20-25M Q4 hit (~130 bps GM); annualized $75-100M at $100/bbl; mgmt resisted simple annualization | Newest, largest risk |
| 3 | Litter (Fresh Step) reset | Through FY26-FY27 | Biggest under-indexed share recovery opportunity; category up mid-SD; UPC hard conversion + shelf placement issues | NEGATIVE for CHD Litter (Arm & Hammer) if successful |
| 4 | GOJO Y1 dilution path | FY26 Q4 + FY27 | Q4 +$200M sales (+10%); EBITDA neutral Y1; 80% B2B mix; $50M+ run-rate synergies starting Y2 | Watch |
| 5 | ERP / IGNITE transition | FY26 → FY27 | Stabilization costs lingered through 3 quarters; ran higher than expected; cost-save delays | Material delay vs prior framing |
| 6 | Innovation pipeline (PURE, Scentiva, Glad, HVR) | Through FY26 | PURE allergen platform above plan; Scentiva/Glad/HVR landing; Litter the only laggard | Brand investment paying off |
| 7 | Pricing / RGM disciplined | Through FY26-FY27 | Glass test live; RGM/PPA-led; not first lever; value superiority first | Disciplined |
| 8 | Tariffs ~$40M (vs $100M prior) | FY26 | CLX evaluating sourcing/formulation; PG already pricing 25% of SKUs | Manageable |
| 9 | Private label watch — Brita | FY26 | Q3 share flat across most categories; Brita explicit watch | Idiosyncratic |
| 10 | Capital allocation: deleverage | Multi-year | Net debt / EBITDA ≤3.0x priority post-GOJO | Defensive |
| 11 | Dividend King 2027 | 2027 | 48-50 yr streak on track for King status | Stable |
| 12 | Glad innovation (new absorbent layer) | FY26-FY27 | RGM price-down on 80ct; new product feature | NEGATIVE for REYN/Hefty |
| 13 | Cleaning category — Lysol vs Clorox | Ongoing | RB Lysol losing to CLX in Cleaning despite heavy promo | POSITIVE share |
| 14 | Hidden Valley GLP-1 impact | FY26-FY27 | First explicit GLP-1 callout; food category mid-SD vs low-SD expected | Sustained pressure |
| 15 | Burt's Bees / Brita / VMS portfolio review | Multi-year | Routine review per mgmt; not divestiture-imminent | Neutral |
Street Q&A
| # | Analyst (Firm) | Topic | Mgmt Response | Quality |
|---|---|---|---|---|
| 1 | Multiple analysts (UBS, Citi, JPM, TD Cowen, BofA) | FY26 GM guide cut bridge | Bellet (CFO): ~1 pt Q3 ERP/cost-save slippage; ~200 bps GOJO Q4 (50 ongoing + 150 onetime inventory); ~100-150 bps Mid-East oil; ~50 bps onetime accelerated cost-save project. | Well Answered — full bridge |
| 2 | Multiple analysts | Q4 oil hit / FY27 annualization | Bellet: $20-25M Q4 (~130 bps GM at $100/bbl); refused to let analysts annualize into FY27. "Wide range of scenarios." | Partial deflection — refused FY27 scoping |
| 3 | Multiple analysts | Volume softness / Litter / Food | Rendle (CEO): Litter (Fresh Step) hard UPC conversion + shelf placement issues; Food category mid-SD vs low-SD expected (GLP-1 watch). Rest of portfolio progressing. | Well Answered — concentrated story |
| 4 | Multiple analysts | Retailer destocking | Rendle: NO broad destock. TDPs +5%. Issues are ERP-related (Lifestyle inventory) and Kingsford early ships, not channel-health. | Well Answered — pushback on bear narrative |
| 5 | Multiple analysts | Private label / share loss thesis | Rendle: Q3 share flat across most categories; private label "did not increase this quarter" — only Brita flagged. Rejects structural-share-loss thesis. | Well Answered — direct pushback |
| 6 | Multiple analysts | FY27 EPS framework | Bellet: declined to provide; "too early"; Aug 2026 guide. Knowns: +$0.90 ERP tailwind, +$110M interest, oil TBD, GOJO neutral. | Hard deflection — punted to Aug |
| 7 | Multiple analysts | Pricing posture / RGM | Rendle: shifted from "selective targeted price" to RGM/PPA-led; value superiority first; Glass test successful, more tests live. | Well Answered — disciplined framing |
| 8 | Multiple analysts | GOJO mechanics / synergies | Bellet: +$200M Q4 sales (+10%); EBITDA neutral Y1; $50M+ run-rate synergies starting Y2; 80% B2B mix. | Well Answered — full mechanics |
| 9 | Multiple analysts | Cost-save project specifics | Bellet: declined to give specifics on accelerated cost-save project (50 bps onetime). | Deflection |
| 10 | Multiple analysts | Glad JV buyout NPV | Bellet: declined to give NPV — punted to August. | Deflection |
| 11 | Multiple analysts | Capital allocation post-GOJO | Bellet: deleverage to ≤3.0x net debt/EBITDA priority; dividend streak ~48-50 yrs (Dividend King 2027 on track). | Well Answered |
| 12 | Multiple analysts | Brand investment intensity | Rendle: 11% of sales held; composition shifted toward innovation/working media via AI tools. | Well Answered |
| 13 | Multiple analysts | Margin trajectory | Bellet: GM guide cut to -250 to -300 bps for FY26; savings deferred into FY27. Q3'26 EBIT margin 17.7% (+180 bps YoY) cleanest print. | Well Answered |
| 14 | Multiple analysts | GLP-1 impact on Food | Rendle: first explicit GLP-1 callout — Hidden Valley dressings; mid-SD decline vs low-SD expected. | Well Answered — first explicit acknowledgment |
| 15 | Multiple analysts | Activist / portfolio review | Rendle: routine review; not divestiture-imminent; execution priority. | Well Answered |
Contradictions
| # | Topic | Severity | Statement A | Statement B | Why it's a tension |
|---|---|---|---|---|---|
| 1 | EBIT margin trajectory | High — material walk-back | Q4'25 (Rendle): "~18% EBIT margin essentially next year" with +25-50 bps cadence | Q3'26 (Bellet): GM cut to down 250-300 bps for FY26; savings deferred into FY27 | Direct contradiction. "Essentially next year" framing materially walked back. ~18% target now multi-year deferred. |
| 2 | ERP transition status | High — material walk-back | Q4'25 / Q1'26 (Rendle): "exceptionally well" / "through the hard part" / "costs are winding down, benefits ramping up" | Q3'26 (Bellet): admits stabilization costs lingered through 3 quarters; ran higher than expected; materially delayed cost savings | Direct contradiction. "Through the hard part" framing was incorrect; ERP slippage is the largest single driver of the FY26 EPS cut. |
| 3 | Organic sales high end | Medium — narrative drift | Q2 FY26: organic -5% to -9% (mid ~-7%) range | Q3'26: -9% point estimate (within range but at low end) | High end became unreachable within one quarter. |
| 4 | Retailer destocking framing | Medium — quantification appeared | Multiple prior calls: "no material destocking" | Q3'26: quantified Lifestyle inventory adjustment (~$X M) | Quantified after repeated denials. |
| 5 | Private label watch | Low — expanded list | Q4'25: "PL is benign" | Q1'26: PL watchlist expanded to include Brita | Brita added to watch. |
| 6 | Brand investment adequacy | Low — composition shift | Multiple calls: 11% of sales held | Q3'26: composition shifted toward innovation/working media via AI tools | Same dollar level, different composition. |
| 7 | Volume vs price/mix | None — consistent | Multiple calls: ~-1% price/mix consistent throughout | — | Consistent. |
| 8 | Capital allocation / GOJO | None — consistent | Consistent narrative culminating in GOJO acquisition | — | Consistent. |
Indirect Read-Throughs
| Name | Relationship | What CLX signaled | Read-through |
|---|---|---|---|
| Church & Dwight (CHD) | Direct competitor — Litter (Arm & Hammer) | Fresh Step relaunch (full SKU/name/claim/pack reset rolling out late Q3); category up mid-SD; CLX targeting share recovery | NEGATIVE for CHD Arm & Hammer Litter |
| Reynolds (REYN — Hefty) | Direct competitor — trash bags | Glad RGM price-down on 80ct + new absorbent layer = renewed price+innovation attack | NEGATIVE for REYN/Hefty |
| Reckitt (RB.L — Lysol) | Direct competitor — cleaning/disinfecting | RB Lysol losing to CLX in Cleaning despite heavy promo | NEGATIVE for RB |
| P&G (PG) | CPG peer | Tariffs: PG already pricing 25% of SKUs vs CLX evaluating sourcing/formulation. Mid-East oil shock framed as sector-wide | NEUTRAL — PG ahead on tariff pricing |
| Colgate (CL) / Henkel / Energizer | CPG peers | Sector-wide oil/Mid-East GM headwind 100-150 bps | NEGATIVE — sector-wide |
| SC Johnson (private) | Cleaning competitor | CLX gaining vs RB in Cleaning despite heavy promo from peers | Indirectly NEGATIVE |
| Royal Oak (Kingsford competitor) | Charcoal competitor | Kingsford early ships dynamic; category specifics not detailed | Neutral |
| Nestle Health Science / Pfizer Consumer (VMS) | VMS peers | VMS portfolio review routine; not divestiture-imminent | Neutral |
| Walmart / Target / Costco / Amazon / Kroger / dollar stores | Retailers | TDPs +5%; no broad destock; only ERP-related and Kingsford early-ship adjustments | POSITIVE — retailer health intact |
| GLP-1 manufacturers (LLY, NVO) | Macro driver | First explicit GLP-1 callout — Hidden Valley dressings; mid-SD vs low-SD expected | NEGATIVE for Food category broadly |
| GOJO (acquired) | Acquisition target | +$200M Q4 sales (+10%); EBITDA neutral Y1; $50M+ Y2 synergies; 80% B2B mix; 50 bps onetime inventory step-up | Strategic — B2B exposure |
| Activist / PE | Speculative | No activist/PE rumors; portfolio review framed as routine | Neutral |
| AI / IGNITE / cost-save projects | Internal | Working-media + cost takeout on new ERP; no external vendor names | Internal-only |
| Tax-refund / gas-pump consumer | Macro KPI | March tax-refund pop reversed by April gas-pump pressure | Consumer barbell |
| JPMorgan / GS / UBS / MS sell-side | Analyst sentiment | JPM downgraded to UW pre-print; GS/UBS/MS cut PTs after | Sell-side capitulation |
Data sourced from Daloopa. Document search is currently in beta; transcript and filing snippets may vary.