Clorox Q4 Earnings & Sales Top Estimates as GOJO Supports Sales

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CLX Q4 Key Metrics & Insights

Clorox posted adjusted earnings of $1.66 per share for the fourth quarter of fiscal 2026, falling 42% year over year but beating the Zacks Consensus Estimate of $1.64 by 1.2%. Lower sales and gross margin weighed on the bottom line.

Net sales declined 2% to $1.95 billion but surpassed the consensus mark of $1.91 billion by 1.8%. The GOJO acquisition contributed about 10 percentage points to sales, while organic sales fell 13% due mainly to the ERP-related shipment comparison.

CLX Margin Contracts on Costs & Lower Volume

Gross profit declined 13% to $804 million from $924 million a year ago. The gross margin declined 520 basis points (bps) year over year to 41.3%. Lower volume, GOJO inventory step-up costs, higher commodity expenses, and elevated manufacturing and logistics costs more than offset savings initiatives.

The comparison with incremental shipments ahead of the prior-year ERP transition reduced the margin by about 150 bps. The GOJO inventory step-up created another roughly 150-bps drag. The adjusted gross margin, excluding acquisition and integration costs, was 42.8%.

Clorox Records Higher Operating Expenses

Selling and administrative expenses increased 0.7% year over year to $298 million from $296 million in the year-ago quarter. These expenses represented 15.3% of net sales and included $21 million of GOJO integration costs.

Advertising costs rose 26.3% year over year to $216 million from $171 million, and represented 11.1% of sales. Research and development expenses were unchanged at $32 million. Interest expenses increased sharply to $55 million from $22 million, reflecting the company’s higher debt burden.

CLX Posts Mixed Segment Results

Health and Wellness sales increased 16% year over year to $860 million. The GOJO acquisition contributed about 28 percentage points to growth. Organic sales declined 12% because of the ERP-related shipment comparison, while segment adjusted EBIT fell 15% to $206 million.

Household sales decreased 18% to $524 million, led by a 16-point volume decline and two points of unfavorable price mix. The decrease reflected the ERP comparison and shipments ahead of consumption in the fiscal third quarter. Segmental adjusted EBIT plunged 56% to $69 million amid lower sales and higher commodity costs.

Lifestyle sales declined 17% year over year to $280 million. Volume fell 14 points, while unfavorable price mix reduced growth by another three points. Segment adjusted EBIT decreased 60% to $38 million, mainly because of lower revenues.

International sales increased 4% to $281 million, primarily supported by favorable foreign exchange rates. Organic sales rose 1%. Segment adjusted EBIT advanced 17% to $27 million on higher sales and cost savings.

CLX Highlights Brand & Portfolio Actions

Clorox completed the GOJO acquisition during the quarter, adding the Purell brand, and expanding its health and hygiene portfolio to more than half of the company's sales. Management noted that early performance from Clorox Professional and Purell supported the strategic rationale for the transaction.

The company also completed its U.S. ERP implementation after a five-year digital transformation program. Management is shifting its focus from system stabilization to productivity improvements, cost removal and optimization.

Glad Trash returned to market-share growth following stronger innovation, brand investment and revenue growth management. Hidden Valley Ranch also gained share, supported by increased media spending, price-pack initiatives and retail execution. Cat Litter remained challenged as Clorox worked through distribution, shelf execution and consumer adoption following a broad brand reset.

Clorox Issues FY27 Outlook

For fiscal 2027, CLX expects net sales growth of 13-14%, including 9.5 percentage points from GOJO. Organic sales are projected to rise 3.5-4.5%, including more than 3.5 points of benefit from lapping the ERP-related inventory drawdown.

The company expects a gross margin of 42%, as stronger-than-normal inflation and unfavorable mix are anticipated to more than offset cost savings. Selling and administrative expenses are projected at 16% of sales, while advertising spending is expected to be 10%.

Adjusted earnings are forecast between $5.70 and $6.00 per share, implying growth of 3-8% year over year. Reported earnings are expected between $5.41 and $5.71 per share, including 29 cents of GOJO transaction-related costs.

CLX Cash Flow & Balance Sheet Update

The fiscal 2026 operating cash flow decreased 38% year over year to $612 million due to the Glad Venture Agreement termination payment. Management expects the fiscal 2027 free cash flow to be 11-13% of net sales.

Clorox ended fiscal 2026 with $143 million in cash and cash equivalents. Long-term debt rose to $3.98 billion from $2.48 billion a year earlier, while notes and loans payable increased to $1.09 billion from $4 million following the GOJO transaction.

Stocks to Consider

Some better-ranked stocks have been discussed below:

Newell Brands Inc. NWL is a global manufacturer and marketer of consumer and commercial products, including Paper Mate, Sharpie, Dymo, EXPO, Parker, Oster, Rubbermaid, FoodSaver and Graco. At present, NWL sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Newell Brands’ current fiscal-year sales implies growth of 1%, and earnings estimates suggest flat results from the year-ago reported figures. NWL delivered a trailing four-quarter earnings surprise of 40%, on average.

Purple Innovation Inc. PRPL designs and manufactures products which include mattresses, pillows and cushions, using its patented Hyper-Elastic Polymer. PRPL currently carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for Purple Innovation’s current fiscal-year sales implies a decline of 0.4% from the year-ago reported figure, while the same for earnings suggests growth of 13.5%. PRPL delivered a trailing four-quarter earnings surprise of 17.4%, on average.

BBB Foods Inc. TBBB operates grocery retail stores principally in Mexico. It offers food products, drinks, hygiene and beauty products, home cleaning products, coffee, tea and substitutes, jellies and desserts, and baby and pet products. TBBB currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for BBB Foods’ current fiscal-year sales and earnings implies growth of 44.6% and 52.7%, respectively, from the year-ago actual. TBBB delivered a trailing four-quarter negative earnings surprise of 98.9%, on average. 

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