Financial Performance - The Clorox Company has published its financial data for fiscal Q4 2025 and the entire FY 2025, along with an outlook for FY 2026 [1] Analyst Perspective - The analyst previously assigned a "sell" rating to Clorox approximately one year ago, indicating a negative outlook on the company's performance [1] Investment Strategy - The article emphasizes the importance of dividend investing as a pathway to financial freedom, suggesting that it is an accessible method for building long-term wealth [1]

Core Insights - Clorox reported a significant increase in adjusted EPS to $2.87, surpassing analyst expectations of $2.20, with GAAP revenue reaching $1.99 billion, exceeding the forecast of $1.93 billion [1][2] - The strong performance was primarily driven by one-time "incremental ERP shipments" ahead of a digital system upgrade, which is not expected to recur [1][5] - Management anticipates lower sales and profits for FY2026, projecting a decline in net sales by 6% to 10% and adjusted EPS down by 18% to 23% [1][10] Financial Performance - Adjusted EPS increased by 57.7% year-over-year from $1.82 in Q4 2024 to $2.87 in Q4 2025 [2] - GAAP revenue grew by 4.7% year-over-year from $1.90 billion in Q4 2024 to $1.99 billion in Q4 2025 [2] - Operating cash flow increased by 41% in FY2025, reaching $981 million, while cash and equivalents declined to $167 million as of June 30, 2025 [6] Segment Performance - Health & Wellness segment net sales grew by 14%, with adjusted EBIT increasing by 20% [7] - Household segment net sales rose by 7%, with EBIT jumping 59%, both inflated by one-time volume surges [7] - Lifestyle segment net sales increased by 3%, reflecting innovation and reduced advertising [7] Strategic Focus - Clorox is prioritizing brand equity, supply chain management, product innovation, and digital transformation [4] - The company is investing over $570 million in digital technology to modernize operations and improve analytics [9] - Corporate responsibility and sustainability efforts, including waste and emissions reduction, are key components of the company's strategy [4] Future Outlook - Management expects organic sales to decline by 5% to 9% in FY2026, with gross margin compressing by 50 to 100 basis points [10] - The company faces $100 million in annualized cost pressure from new import tariffs starting in early FY2026 [9] - Investors will monitor Clorox's ability to manage inventory normalization, tariff impacts, and shifts in consumer behavior [11]

Core Insights - The Clorox Company (CLX) reported strong fourth-quarter fiscal 2025 results, with both revenue and earnings exceeding expectations and showing year-over-year growth [1][3][4] - The company is advancing its long-term strategy with the rollout of a new U.S. enterprise resource planning (ERP) system aimed at enhancing growth and efficiency [2][15] Financial Performance - Adjusted earnings per share (EPS) reached $2.87, surpassing the Zacks Consensus Estimate of $2.24, marking a 57.7% increase from $1.82 in the same quarter last year [3] - Net sales totaled $1.99 billion, a 4.5% increase year-over-year, driven by an 8-point increase in volume, partially offset by a 4-point decline in price mix [4] - Organic sales grew by 8% year-over-year [4] Segment Performance - The Health and Wellness segment saw a 14% increase in sales to $741 million, driven by an 18-point increase in volume [6] - The Household segment reported a 7% increase in net sales to $639 million, with a 13-point increase in volume [7] - The Lifestyle segment's sales grew by 3% to $339 million, reflecting an 8-point increase in volume [8] - The International segment experienced a 1% decline in net sales to $269 million, despite a 5-point increase in volume [9] Gross Profit and Margins - Gross profit increased by 4.5% year-over-year to $924 million, with a gross margin remaining flat at 46.5% [5] - Incremental ERP shipments contributed approximately 150 basis points to gross margin [5] Future Guidance - For fiscal 2026, net sales are expected to decline by 6% to 10%, with organic sales anticipated to decrease by 5% to 9% due to the reversal of incremental shipments from the previous year [16][19] - Adjusted EPS is projected to be between $5.95 and $6.30, indicating a decline of 18% to 23% from the previous year [20]

来源：格隆汇APP 格隆汇8月1日｜高乐氏公布截至6月30日的2025财年Q4业绩，营收同比增长4%至20亿美元，高于分析 师预期的19.4亿美元；调整后每股盈利2.87美元，亦高过预期的2.21美元；毛利率为46.5%，与去年同期 基本持平。高乐氏对今年7月开始的2026财年的展望低于预期，因为公司关键营运软件转换，导致零售 商订单大幅减少，估计将对未来一年的盈利造成高达每股95美仙的负面影响。公司预计2026财年净销售 额将同比下降6%至10%，每股盈利将介乎5.95至6.3美元，低于预期。 ...

Core Insights - Clorox reported revenue of $1.99 billion for the quarter ended June 2025, reflecting a 4.5% increase year-over-year and a surprise of +3.04% over the Zacks Consensus Estimate of $1.93 billion [1] - Earnings per share (EPS) reached $2.87, significantly higher than the $1.82 reported in the same quarter last year, resulting in an EPS surprise of +28.12% compared to the consensus estimate of $2.24 [1] Financial Performance Metrics - Organic Revenue Growth in Health and Wellness was 14%, exceeding the average estimate of 6.3% from four analysts [4] - Organic Revenue Growth in International markets was 1%, slightly below the average estimate of 2.4% [4] - Organic Revenue Growth in Lifestyle was 3%, compared to the average estimate of 6.3% [4] - Organic Revenue Growth in Household products was 7%, surpassing the average estimate of 4.6% [4] - Overall Organic Sales Growth was 8%, above the average estimate of 5.4% [4] Revenue Breakdown - Net Revenue for Health and Wellness was $741 million, exceeding the average estimate of $692.86 million, representing a year-over-year increase of +13.7% [4] - Net Revenue for International markets was $269 million, slightly below the average estimate of $249.98 million, with a year-over-year change of -0.7% [4] - Net Revenue for Lifestyle products was $339 million, compared to the average estimate of $349.59 million, reflecting a +3.4% year-over-year change [4] - Net Revenue for Household products was $639 million, above the average estimate of $626.55 million, indicating a +7% year-over-year increase [4] Income Before Taxes - Income before income taxes for Health and Wellness was $243 million, surpassing the average estimate of $219.1 million [4] - Income before income taxes for Corporate and Other segments was -$56 million, worse than the average estimate of -$26.67 million [4] - Income before income taxes for International markets was $23 million, slightly above the average estimate of $21.21 million [4]

Clorox (CLX) came out with quarterly earnings of $2.87 per share, beating the Zacks Consensus Estimate of $2.24 per share. This compares to earnings of $1.82 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +28.12%. A quarter ago, it was expected that this consumer products maker would post earnings of $1.57 per share when it actually produced earnings of $1.45, delivering a surprise of -7.64%.Over the last four quarters, the c ...

Financial Data and Key Metrics Changes - The company's Q4 and fiscal year 2025 performance was mixed, with weaker than expected top line growth but strong margin and earnings performance [4][5] - Organic sales growth was approximately 8%, but when excluding the 13% to 14% related to retailer inventory build, it resulted in a negative 5% [11][12] - The gross margin impact was higher than anticipated, with a 150 basis point impact for the quarter and 50 basis points for the full year [38][39] Business Line Data and Key Metrics Changes - The cleaning business performed well, continuing to grow share and executing innovation plans effectively [16][18] - The Kingsford business faced execution challenges, particularly during key holidays, but trends improved in July [84][85] Market Data and Key Metrics Changes - The overall consumer environment remains uncertain, with consumers exhibiting value-seeking behaviors and trading down to smaller sizes [20][21][108] - The promotional environment is rational overall, but there are pockets of high promotional activity, particularly in the trash and cat litter categories [59][60] Company Strategy and Development Direction - The company is focused on leveraging its innovation pipeline and enhancing execution to improve market share and financial performance in fiscal year 2026 [7][8][96] - The implementation of a new ERP system is seen as a critical step in building a strong digital foundation to drive revenue and efficiencies [5][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the current consumer environment but expressed confidence in the company's plans and capabilities to drive future growth [8][96] - The company expects sluggish category performance to continue but anticipates improvements in the back half of the year due to strong innovation plans [20][21][68] Other Important Information - The company is experiencing a transition period due to the ERP implementation, which has created noise in the financial results but is expected to lead to stronger performance in the future [30][43] - The company is closely monitoring the impact of tariffs, expecting an increase in costs but planning to offset these through various strategies [62] Q&A Session Summary Question: Sales performance in the quarter - The organic sales growth was about 8%, but excluding the ERP benefit, it was negative 5%, which was lower than expected [11][12] Question: Improvement in consumption trends - Management expects sequential improvement in consumption trends driven by innovation and adjustments to plans [20][21] Question: Impact of destocking - There was no material retailer destocking outside of the ERP, and the company is monitoring the situation closely [29] Question: Expectations for promotional environment - The promotional environment is largely rational, with some competitive activity in specific categories [59][60] Question: Kingsford business performance - Execution issues impacted Kingsford's performance, but adjustments have been made for upcoming holidays [84][85] Question: Medium-term growth outlook - The company aims to return to a 3% to 5% growth target, focusing on innovation and market share improvements [99][100]

Financial Data and Key Metrics Changes - The Q4 and fiscal year 2025 performance was mixed, with weaker than expected top line growth but strong margin and earnings performance [5][6] - Organic sales growth was about 8%, but when excluding the 13% to 14% related to retailer inventory build, it resulted in approximately negative 5% [11][12] - The gross margin impact was higher than anticipated, with a 150 basis point impact for the quarter and 50 basis points for the full year [41][42] Business Line Data and Key Metrics Changes - Cleaning products performed well, with continued share growth and successful innovation plans [16][19] - The Kingsford business faced execution challenges, particularly during key holidays, but trends improved in July [84][85] Market Data and Key Metrics Changes - The overall consumer environment remains uncertain, with consumers exhibiting value-seeking behaviors and trading down to smaller sizes [109][111] - The promotional environment is rational overall, but there are pockets of high promotional activity in specific categories like trash and cat litter [60][61] Company Strategy and Development Direction - The company is focused on leveraging its innovation pipeline and improving execution to drive market share and financial performance in fiscal year 2026 [8][19] - The ERP transition is seen as a critical step in modernizing capabilities and improving data utilization for better decision-making [32][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by macroeconomic uncertainties but expressed confidence in the company's plans and capabilities to navigate these challenges [8][19] - The company expects sluggish category performance to continue but anticipates improvements in the second half of the year due to strategic actions [20][24] Other Important Information - The company expects higher costs from tariffs to be around $40 million, with plans to offset this through various mitigating actions [63] - The ERP implementation is complex and has created noise in the financials, but management believes it will lead to stronger performance in the long term [46][47] Q&A Session Summary Question: Sales performance and consumption data - Management explained that organic sales growth was about 8%, but after adjusting for inventory build, it was negative 5%, which was lower than previous expectations [11][12] Question: Improvement in consumption trends - Management indicated that improvements are expected in the back half of the year due to innovation and adjustments in plans to address consumer behavior [20][22] Question: Impact of destocking and ERP - Management clarified that destocking was in line with expectations and that the ERP transition led to higher than anticipated retailer inventory builds [30][39] Question: Promotional environment and category growth - Management noted that the promotional environment remains rational overall, with some competitive activity in specific categories, and they plan to strategically allocate promotional spending [60][61] Question: Expectations for fiscal year 2026 - Management provided guidance for organic sales growth to be between negative 1% to positive 2%, with expectations for improved performance in the back half of the year [57][58]

Clorox’s full-year outlook came in below expectations as a switch in the company’s key operational software is seen causing severe cutbacks on orders from retailers https://t.co/B59pCp4uP4 ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) Clorox delivered strong FY25 margin expansion and adjusted EPS growth, despite missing topline expectations, while advancing its ERP system implementation and anticipating FY26 declines due to ERP shipment reversals [Q4 and FY25 Performance Overview](index=1&type=section&id=Q4%20and%20FY25%20Performance%20Overview) Clorox reported strong margin expansion and adjusted EPS growth for fiscal year 2025, despite not meeting topline expectations in the second half due to shifting consumer behaviors and market volatility. The company advanced its long-term strategy, including the implementation of a new ERP system in the U.S. to accelerate growth and improve efficiencies - Delivered **strong margin expansion** and **adjusted EPS growth** for FY25, but did not meet topline expectations in the second half due to rapidly shifting consumer behaviors and broader market volatility[1](index=1&type=chunk)[3](index=3&type=chunk) - Advanced long-term strategy and began implementing a new ERP system in the U.S. to modernize capabilities, accelerate growth, and deliver stronger efficiencies[3](index=3&type=chunk) [FY26 Outlook Highlights](index=1&type=section&id=FY26%20Outlook%20Highlights) For fiscal year 2026, Clorox anticipates a significant negative impact from the reversal of incremental ERP shipments from FY25, leading to expected declines in net sales and EPS. The company remains focused on operational excellence and market share improvements - Fiscal year 2026 outlook is significantly impacted by the transitory reversal of incremental ERP shipments from FY25[10](index=10&type=chunk)[14](index=14&type=chunk) - Company remains focused on operational excellence and driving category and market share improvements in FY26[3](index=3&type=chunk) [Fourth-Quarter Fiscal Year 2025 Summary](index=1&type=section&id=Fourth-Quarter%20Fiscal%20Year%202025%20Summary) Clorox reported increased Q4 FY25 net sales and EPS, driven by ERP shipments, alongside strategic advancements and varied segment performance [Key Financial Results (Q4 FY25)](index=1&type=section&id=Key%20Financial%20Results%20%28Q4%20FY25%29) In Q4 FY25, Clorox reported a 4% increase in net sales and an 8% increase in organic sales, largely due to incremental ERP shipments. Gross margin remained flat, while diluted EPS and adjusted EPS saw significant increases of 55% and 58% respectively, also benefiting from ERP shipments Key Financial Results (Q4 FY25) | Metric | Q4 FY25 | Q4 FY24 | Change | ERP Benefit (points/cents) | | :----------------------- | :------ | :------ | :----- | :------------------------- | | Net sales | $2.0 billion | - | +4% | 13-14 points | | Organic sales | - | - | +8% | - | | Gross margin | 46.5% | - | Flat | 150 basis points | | Diluted EPS | $2.68 | $1.73 | +55% | - | | Adjusted EPS | $2.87 | $1.82 | +58% | $0.85 - $0.95 | - Net sales increase was primarily driven by **incremental ERP shipments**, partially offset by the divestiture of the VMS business and unfavorable price mix[4](index=4&type=chunk) - Gross margin flatness was due to **higher volume** and **cost savings**, offset by higher manufacturing/logistics costs and trade promotion spending[4](index=4&type=chunk) [Strategic and Operational Highlights](index=2&type=section&id=Strategic%20and%20Operational%20Highlights) Clorox achieved strong cost savings, prepared for its U.S. ERP launch by building retailer inventory, and continued to invest in value-superiority innovations across major brands. The company also received recognition as a top workplace and Net-Zero Leader - Delivered **strong cost savings**, contributing to **margin expansion** and growth in market shares and organic sales for the fiscal year[7](index=7&type=chunk) - Executed strong preparation, including building retailer inventory, ahead of its ERP launch in the U.S. at the beginning of fiscal year 2026[7](index=7&type=chunk) - Continued investment in innovations across major brands, including relaunches and expansions in various product categories[7](index=7&type=chunk) [Key Segment Results (Q4 FY25)](index=2&type=section&id=Key%20Segment%20Results%20%28Q4%20FY25%29) All segments experienced net sales growth in Q4 FY25, primarily driven by higher volume from incremental ERP shipments, though partially offset by unfavorable price mix. Health and Wellness, Household, and Lifestyle segments showed significant increases in adjusted EBIT [Health and Wellness](index=2&type=section&id=Health%20and%20Wellness) Net sales increased 14% due to higher volume from ERP shipments, leading to a 20% rise in adjusted EBIT - Net sales increased **14%**, driven by **18 points of higher volume** (mainly incremental ERP shipments), partially offset by **4 points of unfavorable price mix**[8](index=8&type=chunk) - Segment adjusted EBIT increased **20%**, primarily due to higher net sales and lower advertising[8](index=8&type=chunk) [Household](index=2&type=section&id=Household) Net sales grew 7% from increased volume due to ERP shipments, resulting in a 59% increase in adjusted EBIT - Net sales increased **7%**, driven by **13 points of higher volume** (mainly incremental ERP shipments), partially offset by **6 points of unfavorable price mix**[8](index=8&type=chunk) - Segment adjusted EBIT increased **59%**, primarily driven by higher volume[8](index=8&type=chunk) [Lifestyle](index=2&type=section&id=Lifestyle) Net sales rose 3% driven by higher volume from ERP shipments, contributing to a 54% increase in adjusted EBIT - Net sales increased **3%**, driven by **8 points of higher volume** (mainly incremental ERP shipments), partially offset by **5 points of unfavorable price mix**[8](index=8&type=chunk) - Segment adjusted EBIT increased **54%**, primarily driven by lower advertising[8](index=8&type=chunk) [International](index=3&type=section&id=International) Net sales decreased 1% due to unfavorable price mix and FX, but organic sales increased 1%, with adjusted EBIT up 28% - Net sales decreased **1%**, mainly due to unfavorable price mix and foreign exchange rates, partially offset by higher volume (incremental ERP shipments). Organic sales increased **1%**[11](index=11&type=chunk) - Segment adjusted EBIT increased **28%**, primarily due to higher volume and lower selling/administrative and advertising expenses[11](index=11&type=chunk) [Fiscal Year 2025 Summary](index=3&type=section&id=Fiscal%20Year%202025%20Summary) Clorox's FY25 performance saw flat net sales but strong organic growth and margin expansion, significantly influenced by ERP transition benefits expected to reverse in FY26 [ERP Transition Impact](index=3&type=section&id=ERP%20Transition%20Impact) Retailers placed advance orders in Q4 FY25 due to Clorox's ERP system transition, providing a temporary benefit to FY25 net sales and EPS. This benefit is expected to reverse in FY26, leading to lower shipments and a significant reduction in sales and EPS for the upcoming fiscal year - Incremental ERP shipments in Q4 FY25 provided a benefit of about **3.5 to 4 points to FY25 sales** and **$0.85 to $0.95 to FY25 EPS**[10](index=10&type=chunk) - This benefit is expected to reverse in FY26, resulting in about **7 to 8 points of sales decline** and a reduction of **$0.85 to $0.95 in FY26 EPS**[10](index=10&type=chunk) - The inventory draw down is projected to reduce FY26 diluted EPS by **29% to 32%** and adjusted EPS by **22% to 25%** compared to FY25[10](index=10&type=chunk) [Key Financial Results (FY25)](index=3&type=section&id=Key%20Financial%20Results%20%28FY25%29) For the full fiscal year 2025, net sales were essentially flat, but organic sales increased by 5%. Gross margin improved significantly by 220 basis points. Diluted EPS surged by 190% and adjusted EPS increased by 25%, both benefiting from ERP shipments and cost savings Key Financial Results (FY25) | Metric | FY25 | FY24 | Change | ERP Benefit (points/cents) | | :----------------------- | :----- | :----- | :----- | :------------------------- | | Net sales | Flat | - | 0% | 3.5-4 points | | Organic sales | - | - | +5% | - | | Gross margin | 45.2% | 43.0% | +220 bps | 50 basis points | | Diluted EPS | $6.52 | $2.25 | +190% | $0.85 - $0.95 | | Adjusted EPS | $7.72 | $6.17 | +25% | $0.85 - $0.95 | | Net cash from operations | $981 million | $695 million | +41% | - | - Gross margin increase was primarily driven by **cost savings**, **higher volume**, and benefits from divestitures, partially offset by higher trade promotion spending and manufacturing/logistics costs[11](index=11&type=chunk) - Diluted EPS increase includes lapping the divestiture of the Argentina business, pension settlement charge, and cyberattack insurance recoveries[11](index=11&type=chunk) [Financial Performance Tables (FY25)](index=4&type=section&id=Financial%20Performance%20Tables%20%28FY25%29) The tables provide a detailed reconciliation of GAAP to non-GAAP measures for fiscal year 2025, highlighting the impact of foreign exchange, divestitures, and ERP transition on net sales and diluted earnings per share Net Sales Growth (Percentage Change vs. Year Ago Period) | Metric | Three months ended Jun. 30, 2025 | Twelve months ended Jun. 30, 2025 | | :------------------------------------------ | :------------------------------- | :-------------------------------- | | Net sales growth / (decrease) (GAAP) | 4 % | 0 % | | Add: Foreign Exchange | — | — | | Add/(Subtract): Divestitures/acquisitions | 4 | 5 | | Organic sales growth / (decrease) (non-GAAP) | 8 % | 5 % | | Note: Approximate benefit from incremental shipments related to ERP transition | +13% to +14% | 3.5% to 4% | Diluted Earnings Per Share (GAAP vs. Adjusted) | Metric | Three months ended Jun. 30, 2025 | Twelve months ended Jun. 30, 2025 | | :------------------------------------------ | :------------------------------- | :-------------------------------- | | As reported (GAAP) $ | 2.68 | 6.52 | | Loss on divestiture | — | 0.94 | | Cyberattack costs, net of insurance recoveries | — | (0.42) | | Digital capabilities and productivity enhancements investment | 0.19 | 0.68 | | As adjusted (non-GAAP) $ | 2.87 | 7.72 | | Note: Approximate benefit from incremental shipments related to ERP transition | $0.85 to $0.95 | $0.85 to $0.95 | [Fiscal Year 2026 Outlook](index=5&type=section&id=Fiscal%20Year%202026%20Outlook) Clorox forecasts significant declines in FY26 net sales and EPS, primarily due to the reversal of ERP-related incremental shipments from FY25 [Key Financial Projections (FY26)](index=5&type=section&id=Key%20Financial%20Projections%20%28FY26%29) Clorox projects a significant decline in net sales and organic sales for FY26, primarily due to the reversal of ERP-related incremental shipments from FY25. Gross margin is also expected to decrease, while selling and administrative expenses and advertising spending are projected as a percentage of net sales - Net sales are expected to be down **6% to 10%** compared to the prior year, with organic sales decreasing **5% to 9%**[16](index=16&type=chunk) - The reversal of ERP incremental shipments is expected to negatively impact organic sales by about **7 to 8 points** and gross margin by about **100 basis points**[16](index=16&type=chunk) - Diluted EPS is expected to be between **$5.60 and $5.95** (**14% to 9% decrease**), and Adjusted EPS between **$5.95 and $6.30** (**23% to 18% decrease**), both including a negative impact of **$0.85 to $0.95** from the ERP reversal[16](index=16&type=chunk) [Financial Outlook Tables (FY26)](index=5&type=section&id=Financial%20Outlook%20Tables%20%28FY26%29) These tables provide the full-year fiscal year 2026 outlook for net sales growth and diluted earnings per share, detailing the expected impact of the ERP transition and other adjustments Net Sales Growth Outlook (Percentage Change vs. Year Ago Period) | Metric | Fiscal year 2025 full year | Fiscal year 2026 full year outlook (Low) | Fiscal year 2026 full year outlook (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: Expected impact from incremental shipments related to ERP transition | 3.5% to 4% | (8)% | (7)% | Diluted Earnings Per Share Outlook (GAAP vs. Adjusted) | Metric | Fiscal year 2025 full year | Fiscal year 2026 full year outlook (Low) | Fiscal year 2026 full year outlook (High) | | :------------------------------------------ | :------------------------- | :--------------------------------------- | :---------------------------------------- | | As estimated (GAAP) $ | 6.52 | 5.60 | 5.90 | | Loss on divestiture | 0.94 | — | — | | Cyberattack costs, net of insurance recoveries | (0.42) | — | — | | Digital capabilities and productivity enhancements investment | 0.68 | 0.35 | 0.30 | | As adjusted (non-GAAP) $ | 7.72 | 5.95 | 6.30 | | Note: Expected impact from incremental shipments related to ERP transition | $0.85 to $0.95 | ($0.95) | ($0.80) | [Non-GAAP Financial Information](index=8&type=section&id=Non-GAAP%20Financial%20Information) This section defines and reconciles non-GAAP financial measures, detailing adjustments for divestitures, cyberattack costs, and digital capability investments [Non-GAAP Measures Definitions](index=8&type=section&id=Non-GAAP%20Measures%20Definitions) This section defines the non-GAAP financial measures used by Clorox, including organic sales growth/(decrease), adjusted EPS, adjusted ETR, and adjusted EBIT, explaining why management believes these measures are useful to investors for evaluating performance on a consistent basis - Organic sales growth/(decrease) is defined as GAAP net sales growth/(decrease) excluding the effect of foreign exchange rate changes and any acquisitions or divestitures[25](index=25&type=chunk) - Adjusted EPS is diluted earnings per share that excludes or has been adjusted for significant nonrecurring or unusual items[26](index=26&type=chunk) - Adjusted EBIT represents earnings (losses) before income taxes, excluding interest income, interest expense, and other significant nonrecurring or unusual items, used to assess segment operating results[26](index=26&type=chunk) [Adjustments to GAAP Measures](index=10&type=section&id=Adjustments%20to%20GAAP%20Measures) Clorox details specific adjustments made to GAAP results for non-GAAP reporting, including the divestiture of the Better Health VMS business, cyberattack costs (net of insurance recoveries), and investments in digital capabilities and productivity enhancements, explaining the rationale for each adjustment [Divestiture of Better Health VMS Business](index=10&type=section&id=Divestiture%20of%20Better%20Health%20VMS%20Business) Clorox completed the divestiture of its Better Health VMS business in Q1 FY25 to support its IGNITE strategy for portfolio evolution and margin improvement - Completed the divestiture of the Better Health VMS business (Natural Vitality, NeoCell, Rainbow Light, RenewLife brands) in **Q1 FY25**[28](index=28&type=chunk) - This transaction supports the IGNITE strategy to evolve the portfolio, reduce volatility, accelerate sales growth, and structurally improve margins[28](index=28&type=chunk) [Cyberattack Costs](index=10&type=section&id=Cyberattack%20Costs) Clorox incurred incremental costs from the August 2023 cyberattack, partially offset by $100 million in insurance recoveries - Incurred incremental costs from the **August 2023 cyberattack**, primarily for third-party consulting, IT recovery, forensic experts, and professional services[30](index=30&type=chunk) - Received **$100 million in insurance recoveries** related to the cyberattack, with no additional recoveries anticipated[30](index=30&type=chunk) [Digital Capabilities and Productivity Enhancements Investment](index=10&type=section&id=Digital%20Capabilities%20and%20Productivity%20Enhancements%20Investment) Clorox plans to invest $570 to $580 million over five years in transformative technologies, with approximately 75% as incremental operating costs adjusted from reported EPS - Plans to invest **$570 to $580 million over five years** (starting FY22) in transformative technologies, including ERP system replacement and cloud-based platform transition[32](index=32&type=chunk) - Approximately **75% of the total investment** is expected to be incremental operating costs, primarily recorded within selling and administrative expenses, adjusted from reported EPS through FY26[33](index=33&type=chunk) [Non-GAAP Reconciliations](index=11&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliation tables for various non-GAAP financial measures, including organic sales growth, adjusted diluted EPS, adjusted effective tax rate, and adjusted EBIT, to their most comparable GAAP measures for both quarterly and annual periods Organic Sales Growth Reconciliation (Q4 FY25 and FY25) | Segment | Q4 FY25 Net Sales Growth (GAAP) | Q4 FY25 Organic Sales Growth (Non-GAAP) | FY25 Net Sales Growth (GAAP) | FY25 Organic Sales Growth (Non-GAAP) | | :------------------ | :------------------------------ | :-------------------------------------- | :--------------------------- | :----------------------------------- | | Health and Wellness | 14 % | 14 % | 9 % | 9 % | | Household | 7 % | 7 % | 3 % | 3 % | | Lifestyle | 3 % | 3 % | 2 % | 2 % | | International | (1)% | 1 % | (8)% | 5 % | | Total Company | 4 % | 8 % | 0 % | 5 % | Adjusted Diluted EPS and ETR Reconciliation (Q4 FY25 and FY25) | Metric | Q4 FY25 GAAP | Q4 FY25 Adjusted | FY25 GAAP | FY25 Adjusted | | :------------------------------------------ | :----------- | :--------------- | :-------- | :------------ | | Diluted EPS | $2.68 | $2.87 | $6.52 | $7.72 | | Effective Tax Rate | 18.2 % | 18.6 % | 23.6 % | 21.4 % | | % Change (Diluted EPS) | 55 % | 58 % | 190 % | 25 % | | Adjustments (FY25 EPS): | | | | | | Loss on divestiture | | | 0.94 | | | Cyberattack costs, net of insurance recoveries | | | (0.42) | | | Digital capabilities and productivity enhancements investment | | | 0.68 | | Adjusted Diluted EPS Outlook Reconciliation (FY26) | Metric | FY26 Outlook (Low) | FY26 Outlook (High) | | :------------------------------------------ | :----------------- | :------------------ | | As estimated (GAAP) | $5.60 | $5.95 | | Digital capabilities and productivity enhancements investment | 0.35 | 0.35 | | As adjusted (Non-GAAP) | $5.95 | $6.30 | Adjusted EBIT Reconciliation (Q4 FY25 and FY25) | Metric | Q4 FY25 | Q4 FY24 | FY25 | FY24 | | :------------------------------------------ | :------ | :------ | :--- | :--- | | Earnings (losses) before income taxes | $410 | $275 | $1,078 | $398 | | Interest income | (2) | (2) | (9) | (23) | | Interest expense | 22 | 21 | 88 | 90 | | Loss on divestiture | — | — | 118 | 240 | | Pension settlement charge | — | — | — | 171 | | Cyberattack costs, net of insurance recoveries | — | (28) | (70) | 29 | | Streamlined operating model | — | 19 | — | 32 | | Digital capabilities and productivity enhancements investment | 30 | 23 | 111 | 108 | | Adjusted EBIT | $460 | $308 | $1,316 | $1,045 | [Condensed Consolidated Financial Statements](index=14&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents Clorox's condensed consolidated financial statements, including statements of earnings, reportable segment information, and balance sheets [Statements of Earnings](index=14&type=section&id=Statements%20of%20Earnings) The condensed consolidated statements of earnings show Clorox's financial performance for the three and twelve months ended June 30, 2025, detailing net sales, gross profit, operating expenses, and net earnings Condensed Consolidated Statements of Earnings (Dollars in millions) | Metric | Three months ended 06/30/2025 | Three months ended 06/30/2024 | Twelve months ended 06/30/2025 | Twelve months ended 06/30/2024 | | :------------------------------------------ | :---------------------------- | :---------------------------- | :----------------------------- | :----------------------------- | | Net sales | $1,988 | $1,903 | $7,104 | $7,093 | | Gross profit | $924 | $884 | $3,213 | $3,048 | | Selling and administrative expenses | $296 | $268 | $1,124 | $1,167 | | Advertising costs | $171 | $266 | $770 | $832 | | Earnings before income taxes | $410 | $275 | $1,078 | $398 | | Net earnings attributable to Clorox | $332 | $216 | $810 | $280 | | Diluted net earnings per share | $2.68 | $1.73 | $6.52 | $2.25 | [Reportable Segment Information](index=15&type=section&id=Reportable%20Segment%20Information) This section provides a breakdown of net sales and segment adjusted EBIT by reportable segment (Health and Wellness, Household, Lifestyle, International) for the three and twelve months ended June 30, 2025, highlighting performance across different business units Net Sales by Segment (Dollars in millions) | Segment | Q4 FY25 Net Sales | Q4 FY24 Net Sales | Q4 % Change | FY25 Net Sales | FY24 Net Sales | FY % Change | | :------------------ | :---------------- | :---------------- | :---------- | :------------- | :------------- | :---------- | | Health and Wellness | $741 | $652 | 14 % | $2,697 | $2,485 | 9 % | | Household | $639 | $597 | 7 % | $2,001 | $1,950 | 3 % | | Lifestyle | $339 | $328 | 3 % | $1,303 | $1,275 | 2 % | | International | $269 | $271 | (1)% | $1,065 | $1,162 | (8)% | | Total | $1,988 | $1,903 | 4 % | $7,104 | $7,093 | 0 % | Segment Adjusted EBIT (Dollars in millions) | Segment | Q4 FY25 Adjusted EBIT | Q4 FY24 Adjusted EBIT | Q4 % Change | FY25 Adjusted EBIT | FY24 Adjusted EBIT | FY % Change | | :------------------ | :-------------------- | :-------------------- | :---------- | :----------------- | :----------------- | :---------- | | Health and Wellness | $243 | $202 | 20 % | $840 | $719 | 17 % | | Household | $156 | $98 | 59 % | $325 | $260 | 25 % | | Lifestyle | $94 | $61 | 54 % | $290 | $253 | 15 % | | International | $23 | $18 | 28 % | $110 | $122 | (10)% | [Balance Sheets](index=16&type=section&id=Balance%20Sheets) The condensed consolidated balance sheets present Clorox's financial position as of June 30, 2025, and June 30, 2024, detailing assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (Dollars in millions) | Metric | 06/30/2025 | 06/30/2024 | | :------------------------------------------ | :--------- | :--------- | | Total current assets | $1,608 | $1,622 | | Total assets | $5,561 | $5,751 | | Total current liabilities | $1,919 | $1,574 | | Long-term debt | $2,484 | $2,481 | | Total liabilities | $5,079 | $5,259 | | Total stockholders' equity | $482 | $492 | [About The Clorox Company](index=6&type=section&id=About%20The%20Clorox%20Company) This section provides an overview of The Clorox Company, its brand portfolio, and its recognition for sustainability efforts [Company Profile and Brands](index=6&type=section&id=Company%20Profile%20and%20Brands) The Clorox Company, headquartered in Oakland, California, is a consumer products company known for its trusted brands such as Brita®, Burt's Bees®, Clorox®, and Glad®. It has been recognized for its sustainability efforts, ranking No. 1 on Barron's 100 Most Sustainable Companies list for three consecutive years - The Clorox Company (NYSE: CLX) champions people to be well and thrive every single day[20](index=20&type=chunk) - 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®[20](index=20&type=chunk) - Ranked **No. 1 on Barron's 100 Most Sustainable Companies list** for the third consecutive year in 2025[20](index=20&type=chunk) [Forward-Looking Statements](index=7&type=section&id=Forward-Looking%20Statements) This section outlines the inherent risks and uncertainties that could cause actual results to differ from forward-looking statements [Risks and Uncertainties](index=7&type=section&id=Risks%20and%20Uncertainties) This section outlines various risks, assumptions, and uncertainties that could cause actual results to differ materially from forward-looking statements. These include unfavorable economic conditions, supply chain disruptions, intense competition, volatility in costs, cyberattacks, and the ability to implement strategic initiatives like the ERP transition - Forward-looking statements are subject to risks and uncertainties, and actual results could differ materially from those discussed[22](index=22&type=chunk) - Important factors include unfavorable general economic and geopolitical conditions, supply chain disruptions, labor shortages, rising inflation, and foreign currency exchange rate fluctuations[22](index=22&type=chunk) - Other risks include the impact of the **August 2023 cyberattack**, intense competition, volatility in raw material costs, and the ability to successfully implement transformational initiatives like the ERP transition[22](index=22&type=chunk)