Clorox(US:CLX) ZACKS·2025-11-04 18:56Core Insights - The Clorox Company (CLX) reported first-quarter fiscal 2026 results with both revenue and earnings exceeding Zacks Consensus Estimates but showing a year-over-year decline [1][12] - The company achieved a significant milestone by launching a new enterprise resource planning (ERP) system in the U.S., enhancing its digital capabilities and operational adaptability [2][12] Financial Performance - Adjusted earnings were reported at 85 cents per share, surpassing the Zacks Consensus Estimate of 78 cents, but reflecting a 54% decrease from $1.86 per share in the same quarter last year [4][12] - Net sales totaled $1.43 billion, down 19% year-over-year, primarily due to lower shipments related to the ERP transition, although it exceeded the consensus estimate of $1.38 billion [5][12] - Gross profit fell 26.1% year-over-year to $596 million, with gross margin contracting by 410 basis points to 41.7% due to reduced volumes and increased manufacturing and logistics costs [6][12] Segment Performance - The Health and Wellness segment saw a 19% decline in sales to $565 million, with a 16-point decrease in volume and a three-point unfavorable price mix [7] - The Household segment reported a 19% decrease in net sales to $362 million, attributed to a one-point unfavorable price mix and lower volumes [8] - The Lifestyle segment experienced a 23% drop in sales to $245 million, reflecting a one-point negative price mix and lower volumes [9] - The International segment's net sales decreased by 2% to $253 million, impacted by lower volumes and shipments related to the ERP transition [10] Financial Position - Clorox ended the quarter with cash and cash equivalents of $166 million, long-term debt of $2.49 billion, and stockholders' deficit equity of $22 million, excluding non-controlling interest [11] Guidance for FY26 - Management maintains its fiscal 2026 outlook for net sales, gross margin, and adjusted EPS, projecting a net sales decline of 6-10% compared to the prior year [13][14] - Organic sales are expected to decrease by 5-9%, largely due to a 7.5 percentage point decline from the reversal of incremental shipments made in the previous year [14] - The gross margin is projected to decline by 50-100 basis points, with a significant portion attributed to the ERP-related shipment impact from the prior year [15] - Earnings per share (EPS) guidance is set between $5.60 and $5.95, indicating a year-over-year decrease of 9-14% [17] - Adjusted EPS is anticipated to be between $5.95 and $6.30, reflecting a decline of 18-23% from the previous year [18]