Clorox(US:CLX) Prnewswire·2025-11-03 21:10Core Insights - The Clorox Company reported a 19% decline in net sales for the first quarter of fiscal year 2026, primarily due to lower shipments related to the ERP transition and the divestiture of the Better Health VMS business [9][11][15] - The company is focused on accelerating profitable growth through innovation and demand-creation initiatives following the ERP rollout, which has caused temporary disruptions [4][13] Financial Performance - Net sales decreased to $1.43 billion, with organic sales down 17%, largely attributed to lower shipment volumes as retailers depleted inventory built up prior to the ERP transition [9][12] - Gross margin fell by 410 basis points to 41.7%, driven by lower volume and increased manufacturing and logistics costs [9][15] - Diluted EPS decreased by 19% to $0.65, while adjusted EPS saw a more significant drop of 54% to $0.85, reflecting the impact of the ERP transition [9][27] ERP Transition Impact - The ERP transition led to a significant inventory build-up in the previous quarter, resulting in a 7.5-point decline in year-over-year sales growth as retailers reduced their stock [8][11] - The company expects the inventory drawdown to negatively impact fiscal year 2026 earnings per share by approximately $0.90 [11][15] Strategic Initiatives - Clorox is investing in digital capabilities and productivity enhancements, with a total investment of approximately $580 million expected to yield long-term efficiencies [23][24] - The company has introduced new products aligned with emerging consumer trends, aiming to deliver superior value [10][4] Outlook - The company maintains its full-year outlook for net sales, gross margin, and adjusted EPS, anticipating a decline of 6% to 10% in net sales for fiscal year 2026 [13][15] - Adjusted EPS is projected to be between $5.95 and $6.30, reflecting a decrease of 23% to 18% year-over-year [15][32]