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)

Core Insights - The Clorox Company reported strong margin expansion and adjusted EPS growth for FY25 despite a challenging environment in the second half of the fiscal year [1][3] - The company faced rapidly shifting consumer behaviors and broader market volatility, which are expected to continue [3] Fiscal Year 2025 Summary - Net sales increased by 4%, driven by an 8-point increase in volume, partially offset by a 4-point unfavorable price mix [6] - Diluted EPS rose by 55% to $2.68, while adjusted EPS increased by 58% to $2.87, benefiting from higher volume and incremental ERP shipments [6][14] - The company achieved a gross margin of 46.5%, remaining flat year-over-year, with incremental ERP shipments contributing approximately 150 basis points [6] Strategic and Operational Highlights - The company executed strong preparations for its ERP launch, including building retailer inventory [7] - Clorox continued to invest in product innovations across major brands, enhancing product offerings and expanding partnerships [7] - The company was recognized as a top workplace by various publications, reflecting its commitment to employee satisfaction [7] Segment Performance - Health and Wellness segment net sales increased by 4% to $2.0 billion, with organic sales up by 8% [6] - Household segment net sales rose by 7%, driven by higher volume, while the Lifestyle segment saw a 3% increase in net sales [8][12] - International sales were impacted by unfavorable foreign exchange rates, but organic sales increased by 1% [12] ERP Transition Impact - The ERP transition resulted in temporary benefits, contributing about 3.5 to 4 points to sales and approximately 85 to 95 cents to earnings per share for FY25 [10] - The company anticipates a decline in sales and earnings for FY26 due to the reversal of the inventory drawdown related to the ERP transition [10][18] Fiscal Year 2026 Outlook - Net sales are expected to decrease by 6% to 10% compared to FY25, with organic sales projected to decline by 5% to 9% [18] - Diluted EPS for FY26 is forecasted to be between $5.60 and $5.95, reflecting a year-over-year decrease of 14% to 9% [18][40] - The company plans to continue investing in digital capabilities and productivity enhancements, which will impact adjusted EPS [18][40]

Core Points - The Clorox Company has announced an increase in its quarterly dividend from $1.22 to $1.24 per share, payable on August 29, 2025, to shareholders of record as of August 13, 2025 [1] - Clorox has a long-standing commitment to providing value to its shareholders through regular dividend payments and annual increases [1] Company Overview - The Clorox Company, headquartered in Oakland, California, has been in operation since 1913 and is known for its trusted brands, including Brita®, Burt's Bees®, Clorox®, Fresh Step®, Glad®, Hidden Valley®, Kingsford®, Liquid-Plumr®, and Pine-Sol® [2] - The company has integrated sustainability into its business reporting and was ranked No. 1 on Barron's 100 Most Sustainable Companies list for the third consecutive year in 2025 [2]

Core Insights - Clorox (CLX) is expected to report quarterly earnings of $2.24 per share, a 23.1% increase year-over-year, with revenues projected at $1.93 billion, reflecting a 1.5% increase compared to the same period last year [1] Earnings Estimates - Over the past 30 days, the consensus EPS estimate has been revised downward by 3.2%, indicating a reassessment by analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate revisions and short-term stock performance [3] Revenue Projections - Analysts predict 'Net Revenue- Health and Wellness' at $692.86 million, a 6.3% increase year-over-year [5] - 'Net Revenue- International' is estimated to be $249.98 million, showing a decline of 7.8% year-over-year [5] - The consensus for 'Net Revenue- Lifestyle' stands at $349.59 million, indicating a 6.6% increase from the previous year [5] - 'Net Revenue- Household' is estimated at $626.55 million, reflecting a 5% increase year-over-year [6] Income Estimates - 'Income before income taxes- Health and Wellness' is expected to reach $219.10 million, up from $202.00 million year-over-year [7] - 'Income before income taxes- International' is projected at $21.21 million, compared to $18.00 million last year [7] - 'Income before income taxes- Lifestyle' is likely to be $71.73 million, an increase from $61.00 million in the same quarter last year [8] - 'Income before income taxes- Household' is estimated at $102.89 million, compared to $98.00 million year-over-year [8] Stock Performance - Clorox shares have increased by 2.8% over the past month, while the Zacks S&P 500 composite has risen by 3.4% [8] - Clorox holds a Zacks Rank 5 (Strong Sell), indicating expected underperformance relative to the overall market in the near term [8]

Core Insights - Clorox Company (CLX) is expected to report fiscal fourth-quarter 2025 earnings on July 31, with anticipated year-over-year growth in both revenue and earnings [1][8] - The Zacks Consensus Estimate for fourth-quarter revenues is $1.94 billion, reflecting a 2% increase from the prior year, while the earnings per share (EPS) estimate is $2.25, indicating a 23.6% increase year-over-year [2][8] - For fiscal 2025, the revenue estimate is $7.1 billion, a slight decline of 0.5% from the previous year, with EPS expected to rise by 14.9% to $7.09 [3][8] Financial Performance - Clorox has achieved its 10th consecutive quarter of gross margin growth, with a projected gross margin of around 44% for Q4, despite facing tariff-related costs and ERP transition expenses [5][6] - The adjusted operating profit for Q4 is predicted to increase by 27% year-over-year to $391.2 million, with an expected operating margin expansion of 400 basis points to 20.2% [6][8] Strategic Initiatives - The company is executing its IGNITE strategy, focusing on innovation and brand equity, which has led to successful premium product launches like Scentiva [4][8] - Clorox's operational efficiency and margin expansion strategies have helped mitigate cost pressures, allowing the company to maintain stability amid external challenges [5][8] Market Position - Clorox's international segment shows growth potential, with strong household penetration and premium positioning insulating the brand from significant trade-down behavior [7][8] - Despite a challenging macroeconomic environment, Clorox's brand portfolio and execution capabilities enable it to navigate market challenges more effectively than many competitors [7][8] Valuation and Stock Performance - Clorox stock is trading at a forward 12-month price-to-earnings ratio of 19.50x, below the industry average of 20.20x, indicating a potential valuation opportunity [11][8] - Year-to-date, Clorox has underperformed, with a decline of 21.6%, compared to a 2.4% decline in its industry and a 5.4% growth in the broader Consumer Staples sector [14][8]

Core Viewpoint - The market anticipates Clorox (CLX) will report a year-over-year increase in earnings driven by higher revenues when it releases its quarterly results for the period ending June 2025 [1][2]. Earnings Expectations - Clorox is expected to report quarterly earnings of $2.25 per share, reflecting a year-over-year increase of +23.6% [3]. - Revenues are projected to reach $1.94 billion, which is a 2% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.26% higher in the last 30 days, indicating a collective reassessment by analysts [4]. - However, the Most Accurate Estimate for Clorox is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -3.62%, suggesting a bearish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the deviation of actual earnings from consensus estimates, but it is more reliable for positive readings [9][10]. - Clorox currently holds a Zacks Rank of 4, which complicates the prediction of an earnings beat [12]. Historical Performance - In the last reported quarter, Clorox was expected to post earnings of $1.57 per share but only achieved $1.45, resulting in a surprise of -7.64% [13]. - Over the past four quarters, Clorox has beaten consensus EPS estimates three times [14]. Industry Comparison - Procter & Gamble (PG), a competitor in the consumer products sector, is expected to report earnings of $1.43 per share for the same quarter, indicating a year-over-year change of +2.1% [18]. - P&G's revenues are anticipated to be $20.82 billion, up 1.4% from the previous year [18].

Core Viewpoint - Ahold NV (ADRNY) is currently viewed as a better investment opportunity compared to Clorox (CLX) based on various valuation metrics and analyst outlooks [1][3]. Valuation Metrics - Ahold NV has a forward P/E ratio of 13.29, while Clorox has a forward P/E of 20.07, indicating that Ahold NV is more undervalued at its current share price [5]. - The PEG ratio for Ahold NV is 1.65, compared to Clorox's PEG ratio of 3.41, suggesting Ahold NV has a more favorable earnings growth outlook relative to its valuation [5]. - Ahold NV's P/B ratio is 2.28, significantly lower than Clorox's P/B ratio of 84.19, further highlighting Ahold NV's relative undervaluation [6]. Analyst Ratings - Ahold NV holds a Zacks Rank of 1 (Strong Buy), indicating strong earnings estimate revision trends, while Clorox has a Zacks Rank of 4 (Sell), reflecting a less favorable analyst outlook [3][6]. - The Value grade for Ahold NV is A, whereas Clorox has a Value grade of D, reinforcing the perception that Ahold NV is the superior investment choice at this time [6].