Key Takeaways:
- Clorox Q4 net sales fell 2% to $1.95 billion, beating consensus of $1.90 billion.
- Adjusted EPS dropped 42% to $1.66, edging past estimates of $1.65 per share.
- FY27 net sales guided up 13%-14%, above analyst forecasts of 12.8% growth.
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Clorox forecasts 13% sales growth as GOJO acquisition lifts outlook
Clorox forecast fiscal 2027 net sales growth of 13% to 14%, beating analyst estimates, as the GOJO acquisition lifts the outlook.
"Our fourth-quarter results were in line with our expectations and reflect disciplined execution in a dynamic environment," Chair and CEO Linda Rendle said.
Fourth-quarter net sales fell 2% to $1.95 billion, beating consensus of $1.90 billion, while adjusted EPS dropped 42% to $1.66, edging past estimates of $1.65. Gross margin contracted 520 basis points to 41.3%, pressured by the GOJO inventory step-up, higher commodity costs and lower volume.
The guidance implies a return to organic growth after fiscal 2026 organic sales declined 8%. Clorox completed its $2.25 billion acquisition of GOJO Industries in April, folding the Purell brand into a health and hygiene portfolio that now represents more than half of net sales.
For fiscal 2026, net sales fell 5% to $6.72 billion, with organic sales down 8% as retailers drew down inventory built ahead of the company's U.S. ERP system transition. Diluted EPS declined 26% to $4.81, and adjusted EPS fell 28% to $5.53. The ERP inventory drawdown reduced fiscal 2026 EPS by about 90 cents.
The company guided fiscal 2027 adjusted EPS of $5.70 to $6.00, versus analyst expectations of $5.97, and diluted EPS of $5.41 to $5.71. Gross margin is expected near 42%, with higher-than-normal inflation and negative mix offsetting cost savings. Advertising spending is planned at about 10% of net sales.
By segment in the fourth quarter, Health and Wellness net sales rose 16% on the GOJO contribution, while Household fell 18% and Lifestyle dropped 17%, both pressured by the ERP shipment comparison. International net sales gained 4%, with organic sales up 1%. Segment adjusted EBIT fell 15% in Health and Wellness, 56% in Household and 60% in Lifestyle, while International rose 17%.
Clorox also completed its U.S. ERP implementation, ending a five-year digital transformation, and adopted a simplified operating structure. The company raised its quarterly dividend to $1.25 per share.
The FY27 outlook implies management expects demand to recover as the ERP drag fades and the Purell integration adds scale. Investors will watch the Q&A webcast with Rendle and CFO Luc Bellet at 5 p.m. ET today for segment margin detail.
This article is for informational purposes only and does not constitute investment advice.
