Why Is Clorox (CLX) Up 1.7% Since Last Earnings Report?

Core Viewpoint - Clorox reported second-quarter fiscal 2025 results that exceeded earnings and sales estimates, but both revenues and earnings declined year over year [2][3]. Financial Performance - Adjusted earnings per share (EPS) of $1.55 surpassed the Zacks Consensus Estimate of $1.39, but declined 28% from $2.16 in the prior year [3]. - Net sales were $1.69 billion, a decrease of 15% year over year, yet above the Zacks Consensus Estimate of $1.64 billion [4]. - The gross margin expanded by 30 basis points to 43.8%, marking the ninth consecutive quarter of margin expansion, driven by cost savings and divestitures [5]. Segment Performance - Health and Wellness segment sales fell 13% to $628 million, with a 25% drop in segment-adjusted EBIT [6]. - Household segment sales declined 11% to $446 million, with adjusted EBIT down 48% [7]. - Lifestyle segment sales decreased 16% to $338 million, with a 36% decline in segment-adjusted EBIT [8]. - International segment sales dropped 12% to $274 million, with adjusted EBIT down 34% [9]. Financial Position - Clorox ended the quarter with cash and cash equivalents of $290 million and long-term debt of $2.5 billion [10]. Guidance for FY25 - Clorox updated its guidance for fiscal 2025, expecting net sales to decline 1% to increase by 2%, and organic sales to rise by 4-7% [12]. - The gross margin is projected to expand by 125-150 basis points, with selling and administrative expenses forecasted to be 15-16% of net sales [13]. - The company anticipates a GAAP EPS of $5.52-$5.92, indicating a year-over-year increase of 145-163% [14]. - Adjusted EPS is projected at $6.95-$7.35, reflecting a 13-19% year-over-year increase [15]. Market Sentiment - Estimates for Clorox have been trending downward, indicating a shift in market sentiment [16][18]. - Clorox holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [18].