CLOROX CO /DE/ (CLX) Business Analysis — Annual Report Summary, Outlook & Risks

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CLOROX CO /DE/ (CLX)

Business Summary

The Clorox Company is a leading multinational manufacturer and marketer of consumer and professional products. The Company has operations in approximately 25 countries or territories and sells its products in approximately 95 markets, primarily through mass retailers; grocery outlets; warehouse clubs; dollar stores; home hardware centers; drug, pet and military stores; third-party and owned e-commerce channels; and distributors.

Clorox markets some of the most trusted and recognized consumer brand names, including Clorox cleaning and disinfecting products; Pine-Sol cleaner; Liquid-Plumr clog removers; Poett home care products; Glad bags and wraps; Fresh Step cat litter; Kingsford grilling products; Hidden Valley dressings, dips, seasonings and sauces; Brita water-filtration products; and Burt's Bees natural personal care products. The Company also markets industry-leading products and technologies for professional customers, including those sold under the Purell, CloroxPro and Clorox Healthcare brand names. Over 80% of the Company's sales are generated from brands that hold the No. 1 or No. 2 market share positions in their categories.

The Company generates revenue through the sale of consumer and professional products across multiple segments. The business model is primarily transactional, with revenue recognized at the point of sale through mass retailers, grocery outlets, warehouse clubs, dollar stores, home hardware centers, drug, pet and military stores, third-party and owned e-commerce channels, and distributors.

The Company operates through four reportable segments: Health and Wellness, Household, Lifestyle, and International. The Health and Wellness segment includes cleaning and professional products. The Household segment includes bags and wraps, cat litter, and grilling products. The Lifestyle segment includes food products, water filtration, and natural personal care. The International segment includes all products sold outside the United States. In fiscal year 2026, the Health and Wellness segment reported net sales of $2.908 billion ¹, the Household segment reported net sales of $1.832 billion ², the Lifestyle segment reported net sales of $1.166 billion ³, and the International segment reported net sales of $1.031 billion ⁴.

In April 2026, the Company completed the acquisition of GOJO, expanding its product portfolio to include the Purell brand and GOJO's health and hygiene solutions. The Company acquired all of the issued and outstanding membership interests of GOJO, which now operates as Clorox Purell and is based in northeast Ohio. The acquisition reflects the Company's strategy to expand its position in health and hygiene and strengthens its presence in business-to-business (B2B) channels, including healthcare and other institutional markets, through an established distribution network and a large installed base of dispensing systems that drive recurring demand. During the fiscal year, the Company also saw the impact of the final phase of ERP system implementation, which pulled certain sales into the prior fiscal year ahead of consumption.

In fiscal year 2026, net sales were $6.937 billion ⁵, compared to $7.275 billion ⁶ in fiscal year 2025. Net earnings were $281 million ⁷ in fiscal year 2026, compared to $377 million ⁸ in fiscal year 2025. Diluted net earnings per share (EPS) decreased 26% compared to the year-ago period, primarily due to lower net sales and higher manufacturing and logistics costs, partially offset by lapping the loss on the divestiture of the Better Health Vitamins, Minerals and Supplements (VMS) business in the prior year.

Business Outlook & Financial Sufficiency

The Company's IGNITE strategy accelerates innovation in key areas of the business to drive growth and deliver value for all Company stakeholders. IGNITE focuses on four strategic choices aimed at fueling long-term, profitable growth; innovating consumer experiences; reimagining how the company and its people work; and continuously evolving the product portfolio. In addition, IGNITE's integrated approach to sustainability supports long-term value creation for the Company and its stakeholders.

The acquisition of GOJO represents a major growth vector, expanding the Company's product portfolio to include the Purell brand and GOJO's health and hygiene solutions. The acquisition strengthens the Company's presence in business-to-business (B2B) channels, including healthcare and other institutional markets, through an established distribution network and a large installed base of dispensing systems that drive recurring demand.

The Company continued to make significant investments in its strong brands, strategic digital capabilities and streamlined operating model to drive long-term value creation. The Company entered fiscal year 2026 focused on implementing and stabilizing its new enterprise resource planning (ERP) system. While this foundational effort created some expected near-term disruption, the Company continues to work towards optimization of its digital capabilities.

The Company's capital allocation strategy includes investments in its brands, digital capabilities, and operating model. The Company also engages in share repurchases and dividend payments, though specific authorization amounts or dividend policy figures were not disclosed in the filing.

Ongoing macroeconomic uncertainty continued to influence consumer shopping behaviors, resulting in category slowdowns and lower sales. Given these headwinds, as well as the timing impact of the final phase of ERP system implementation, which pulled certain sales into the prior fiscal year ahead of consumption, in fiscal year 2026 the Company saw decreases to organic sales and earnings.

Management Sentiments & Priorities

Management's message emphasizes the Company's focus on its IGNITE strategy, which accelerates innovation in key areas to drive growth and deliver value for all stakeholders. The Company remained focused on making significant investments in its strong brands, strategic digital capabilities and streamlined operating model to drive long-term value creation. While net sales declined in fiscal year 2026, the Company strengthened the foundation of its business and expanded its portfolio through the GOJO acquisition.

Financial Details

In fiscal year 2026, total net sales were $6.937 billion , compared to $7.275 billion in fiscal year 2025. Net earnings were $281 million in fiscal year 2026, compared to $377 million in fiscal year 2025. Diluted net earnings per share (EPS) was $2.26 ¹² in fiscal year 2026, compared to $3.04 ¹³ in fiscal year 2025. Gross profit was $2.918 billion ¹⁴ in fiscal year 2026, compared to $3.147 billion ¹⁵ in fiscal year 2025. Selling and administrative expenses were $2.058 billion ¹⁶ in fiscal year 2026, compared to $2.147 billion ¹⁷ in fiscal year 2025. Research and development expenses were $131 million ¹⁸ in fiscal year 2026, compared to $131 million ¹⁹ in fiscal year 2025. Interest expense was $155 million ²⁰ in fiscal year 2026, compared to $145 million ²¹ in fiscal year 2025. The effective tax rate was 23.7% ²² in fiscal year 2026, compared to 22.7% ²³ in fiscal year 2025. Cash and cash equivalents were $1.178 billion ²⁴ as of June 30, 2026, compared to $1.023 billion ²⁵ as of June 30, 2025. Total debt was $3.614 billion as of June 30, 2026, compared to $2.826 billion as of June 30, 2025. Net cash provided by operations was $1.009 billion ²⁶ in fiscal year 2026, compared to $1.127 billion ²⁷ in fiscal year 2025. Capital expenditures were $244 million ²⁸ in fiscal year 2026, compared to $247 million ²⁹ in fiscal year 2025. Free cash flow, defined as net cash provided by operations less capital expenditures, was $765 million ³⁰ in fiscal year 2026, compared to $880 million ³¹ in fiscal year 2025. The Health and Wellness segment reported net sales of $2.908 billion in fiscal year 2026, compared to $3.125 billion ³² in fiscal year 2025. The Household segment reported net sales of $1.832 billion in fiscal year 2026, compared to $1.902 billion ³³ in fiscal year 2025. The Lifestyle segment reported net sales of $1.166 billion in fiscal year 2026, compared to $1.218 billion ³⁴ in fiscal year 2025. The International segment reported net sales of $1.031 billion in fiscal year 2026, compared to $1.030 billion ³⁵ in fiscal year 2025.

Risk Factors

The Company faces risks from ongoing macroeconomic uncertainty that continues to influence consumer shopping behaviors, resulting in category slowdowns and lower sales. The implementation and stabilization of the new ERP system created expected near-term disruption, and the timing impact of the final phase pulled certain sales into the prior fiscal year ahead of consumption. The Company's net sales declined to $6.937 billion in fiscal year 2026 from $7.275 billion in fiscal year 2025, and diluted EPS decreased 26% ⁹ compared to the prior year. Higher manufacturing and logistics costs also pressured earnings. The Company's total debt increased to $3.614 billion ¹⁰ as of June 30, 2026, from $2.826 billion ¹¹ as of June 30, 2025, reflecting financing for the GOJO acquisition. The Company is subject to legal proceedings, including matters in Alameda County, California and Dickinson County, Michigan, for which the Company has recorded accruals.

View Source Annual Report on SEC.gov ↗

References

[1] Item 8, Note 19 — Segment Information
[2] Item 8, Note 19 — Segment Information
[3] Item 8, Note 19 — Segment Information
[4] Item 8, Note 19 — Segment Information
[5] Item 8, Consolidated Statements of Income
[6] Item 8, Consolidated Statements of Income
[7] Item 8, Consolidated Statements of Income
[8] Item 8, Consolidated Statements of Income
[9] Item 7, MD&A — Consolidated Results
[10] Item 8, Consolidated Balance Sheets
[11] Item 8, Consolidated Balance Sheets
[12] Item 8, Consolidated Statements of Income
[13] Item 8, Consolidated Statements of Income
[14] Item 8, Consolidated Statements of Income
[15] Item 8, Consolidated Statements of Income
[16] Item 8, Consolidated Statements of Income
[17] Item 8, Consolidated Statements of Income
[18] Item 8, Consolidated Statements of Income
[19] Item 8, Consolidated Statements of Income
[20] Item 8, Consolidated Statements of Income
[21] Item 8, Consolidated Statements of Income
[22] Item 8, Consolidated Statements of Income
[23] Item 8, Consolidated Statements of Income
[24] Item 8, Consolidated Balance Sheets
[25] Item 8, Consolidated Balance Sheets
[26] Item 8, Consolidated Statements of Cash Flows
[27] Item 8, Consolidated Statements of Cash Flows
[28] Item 8, Consolidated Statements of Cash Flows
[29] Item 8, Consolidated Statements of Cash Flows
[30] Item 7, MD&A — Liquidity and Capital Resources
[31] Item 7, MD&A — Liquidity and Capital Resources
[32] Item 8, Note 19 — Segment Information
[33] Item 8, Note 19 — Segment Information
[34] Item 8, Note 19 — Segment Information
[35] Item 8, Note 19 — Segment Information

Analysis on 8/7/2026

Recent Material Events

Aug 3, 2026Material Event

The Clorox Company reported fourth-quarter and full-year fiscal 2026 results ending June 30, 2026. Q4 net sales decreased 2% to $1.95 billion, with organic sales down 13% due to lapping ERP-related incremental shipments; the GOJO acquisition contributed approximately 10 points. Diluted EPS fell 50% to $1.34 from $2.68, while adjusted EPS declined 42% to $1.66. Full-year net sales decreased 5% to $6.72 billion, and diluted EPS dropped 26% to $4.81. The company provided fiscal 2027 guidance expecting diluted EPS between $5.41 and $5.71, representing a 12-19% increase year-over-year. Clorox operates in the consumer packaged goods industry, manufacturing household cleaning, health, and personal care products.

Jun 17, 2026Material Event

The Clorox Company announced the following executive leadership changes, effective June 17, 2026: Chris Hyder was appointed Executive Vice President and Chief Operating Officer, with a base salary of $800,000, a short-term incentive target of 100% of salary, and a $4,000,000 restricted stock unit grant. Nina Barton was appointed Executive Vice President and Chief Growth & Strategy Officer. The Clorox Company is a consumer goods company that manufactures and markets various household and personal care products.

May 28, 2026Material Event

The Clorox Company announced that Chair and CEO Linda Rendle will step down for health reasons, prompting the Board to initiate a comprehensive search for a successor. Ms. Rendle will remain in her current roles until a new CEO is appointed and will subsequently transition into an advisory role to ensure a smooth leadership transition.

May 11, 2026Material Event

The Clorox Company completed a registered public offering of senior notes totaling $1.5 billion on May 11, 2026. The issuance consists of $550 million in 4.700% senior notes due 2031, $400 million in 4.950% senior notes due 2033, and $550 million in 5.250% senior notes due 2036.

Apr 30, 2026Material Event

The Clorox Company issued a press release on April 30, 2026, announcing its financial results for the third quarter ended March 31, 2026. The filing also includes supplemental financial information provided in accordance with Regulation FD disclosure.

Apr 1, 2026Material Event

The Clorox Company has completed its acquisition of Gojo Industries, Inc., the manufacturer of Purell, by purchasing all issued and outstanding membership interests. The transaction was finalized on April 1, 2026, in accordance with a previously announced membership interest purchase agreement.