Financial Data and Key Metrics Changes - The company experienced a mixed fiscal year 2025, delivering less than expected top-line growth but exceeding expectations on margin and earnings due to a strong margin transformation program [1][2] - In Q4, the company delivered strong margin and earnings performance but underperformed on top-line growth [2] - The company expects to be at the low end of its range for Q1, with shipments rebounding and consumption expected to improve in September [3][4] Business Line Data and Key Metrics Changes - The U.S. business, which constitutes 85% of the company's operations, is undergoing a greenfield implementation of a new ERP system, which has faced some initial challenges but is expected to stabilize [3][4] - The company noted volatility in category growth, particularly in food, which has historically been steady, indicating a shift in consumer behavior [11][12] Market Data and Key Metrics Changes - The company anticipates U.S. retail growth to average 0% to 1% through the year, with category growth expected to be lower than historical averages [52][53] - The consumer is under stress, leading to cautious spending behavior, which is impacting category growth [13][25] Company Strategy and Development Direction - The company is focused on transforming its capabilities through significant investments, including over $550 million in rebuilding its digital foundation [21][22] - The strategy includes a strong emphasis on innovation, with plans to launch new platforms and expand existing ones in the back half of the year [35][55] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by a volatile consumer environment and competitive activity, but remains optimistic about the company's ability to recover and grow [20][25] - The company expects sequential improvements in consumption and market share, particularly in the back half of the year [54][55] Other Important Information - The company is currently in a stabilization phase following a cyber attack in 2023, which impacted operations but demonstrated the strength of its brands [23][24] - The company is committed to ensuring that its categories grow again and is focused on innovation and consumer insights to drive this growth [25][48] Q&A Session Summary Question: What are the long-term category growth expectations? - The company expects its categories to grow about 2% to 2.5% in the U.S., with recent volatility noted but stabilization expected [11][12] Question: Why is Clorox losing share in several categories? - Management indicated that while some categories are performing well, execution issues in certain areas, such as Kingsford, have led to share loss [16][19] Question: How is the organization managing the transformation amidst operational challenges? - Management clarified that the organization is not distracted but is focused on building strong capabilities to better respond to consumer needs [20][24] Question: What is the outlook for promotional activity in the current competitive environment? - The company sees a rational promotional environment overall but acknowledges heightened competitive activity in specific categories like litter and trash [47][49] Question: Can you discuss the guidance for the upcoming quarters? - The company anticipates a year-over-year decline of 7% to 8% due to ERP implementation noise, with organic sales growth expected to be between -1% to +2% [52][54]

Financial Data and Key Metrics Changes - The fiscal year 2025 was mixed for the company, with top-line performance falling short of expectations, but margins and earnings exceeding expectations due to a strong margin transformation program [1][2] - The company expects to be at the low end of its range for Q1, but anticipates a rebound in shipments and consumption in September [3][4] Business Line Data and Key Metrics Changes - The U.S. business, which constitutes 85% of the company's operations, is undergoing a greenfield implementation of a new ERP system, which has caused some initial disruptions but is expected to stabilize [3][4] - The company has seen volatility in category growth, particularly in food, which has historically been steady, but is now expected to be flattish to slightly growing this year [11][12] Market Data and Key Metrics Changes - The company noted that consumer behavior is under stress, leading to cautious spending and a tendency to trade down to larger sizes or value SKUs, which compresses category growth [13][14] - The company expects U.S. retail growth to average 0% to 1% through the year, with category growth anticipated to be lower than historical averages [55] Company Strategy and Development Direction - The company is focused on strong category investments and winning market share, aiming to return category growth to the historical range of 2% to 2.5% [14][27] - The company is investing over $550 million in rebuilding its digital foundation to enhance capabilities and respond more effectively to consumer needs [22][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by a volatile consumer environment and the need for rapid adjustments to plans in response to changing consumer behavior [21][20] - The company is optimistic about its innovation pipeline and plans to launch new platforms in the back half of the year, which are expected to drive growth [36][37] Other Important Information - The company experienced a significant cyber attack in 2023, which impacted operations but highlighted the strength of its brands as it regained distribution and share [24][25] - The company is currently in a stabilization phase following the ERP implementation, with expectations for productivity improvements and cost savings in the future [59][60] Q&A Session Summary Question: What are the long-term category growth expectations? - The company expects U.S. categories to grow about 2% to 2.5% on average, with recent volatility noted [11][12] Question: Why is Clorox losing share in many categories? - The company identified execution issues and rapid changes in consumer behavior as key factors for losing share in certain categories [15][20] Question: How is the organization managing the transformation and operational challenges? - Management emphasized that the organization is not distracted but is focused on building strong capabilities while navigating various challenges [21][26] Question: What is the outlook for promotional activity in the current environment? - The company noted a rational promotional environment overall, but acknowledged increased competitive activity in specific categories like litter and trash [48][50] Question: What are the key assumptions in the guidance for the balance of the year? - The guidance includes a significant impact from the ERP implementation, with expectations for organic sales growth to be between -1% to +2% [54][55]