Clorox Company
Q1 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +1.55%.
Did CLX Beat Earnings? Q1 2026 Results
Clorox posted a headline beat in fiscal Q1 2026, but the underlying story was decidedly more complicated. The consumer products giant reported adjusted EPS of $0.85, clearing the $0.78 consensus estimate by 9.23%, while revenue of $1.43 billion edged past expectations by 2.21%, yet still tumbled 18.9% year-over-year as the company absorbed the full weight of its U.S. ERP system transition. That single operational shift accounted for roughly 14 percentage points of the quarterly sales decline, as retailers drew down approximately two weeks of pre-shipped inventory that had been built ahead of the ERP go-live at the end of fiscal Q4 2025. Gross margin contracted 410 basis points to 41.7%, and free cash flow fell sharply to $57.00 million from $182.00 million a year ago. With Morgan Stanley trimming its price target to $125 from $137 in the wake of results, management acknowledged that its full-year outlook, which calls for net sales down 6% to 10% and adjusted EPS of $5.95 to $6.30, is now tracking toward the lower end of those ranges.
- ERP transition caused retailers to draw down pre-built inventory, reducing Q1 shipments by approximately 14 percentage points
- Gross margin declined 410 basis points to 41.7% due to lower volume and higher manufacturing and logistics costs
- Cost savings provided 140 basis points of gross margin benefit
- Lower advertising spending in Lifestyle segment partially offset lower net sales
- Strong shipments to Club channel drove unfavorable price mix in Health and Wellness
“This quarter's ERP launch marks a significant milestone in our transformation journey, empowering faster execution, greater productivity, and deeper insights — all aimed at delivering superior value to our consumers.”
Clorox CEO, on the earnings call
Forward Guidance & Outlook
Clorox maintained its full-year FY2026 outlook but noted current expectations are tracking toward the lower end of ranges due to order fulfillment challenges that led to consumption and market share losses. Net sales are expected to decline 6% to 10% (organic sales down 5% to 9%), including approximately 7.5 points of negative impact from the reversal of ERP-related incremental shipments from the prior year. Gross margin is expected to decline 50 to 100 basis points. GAAP diluted EPS is expected to be $5.60 to $5.95, and adjusted EPS is expected to be $5.95 to $6.30. Selling and administrative expenses are expected at about 16% of net sales, advertising spending at about 11% of net sales, and the effective tax rate at about 24%. The guidance reflects slightly lower input costs and a strengthened demand creation plan to support share and sales growth in the second half.
CLX YoY Financials
CLX Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.