Clorox | 8-K: FY2026 Revenue Beats Estimate at USD 6.72 B

Revenue: As of FY2026, the actual value is USD 6.72 B, beating the estimate of USD 6.684 B.

EPS: As of FY2026, the actual value is USD 4.81, missing the estimate of USD 4.9001.

EBIT: As of FY2026, the actual value is USD 913 M.

Fourth-Quarter Fiscal Year 2026 Financial Summary

Net Sales

• Total net sales decreased 2% to $1.95 billion, with organic sales decreasing 13%.
• The GOJO acquisition contributed approximately 10 points to sales growth, while organic sales were negatively impacted by about 13.5 points due to lapping incremental shipments from an ERP transition.

Gross Margin

• Gross margin decreased 520 basis points to 41.3% from 46.5% in the prior-year quarter.
• This decline was primarily due to lower volume, the impact of the GOJO acquisition’s inventory step-up, higher commodity costs, and increased manufacturing and logistics costs.
• The ERP-related shipment comparison and GOJO inventory step-up each reduced gross margin by about 150 basis points.
• GAAP Gross Margin was 41.3%, and Adjusted Gross Margin was 42.8%.
• Key drivers for the change in gross margin included cost savings (+170 basis points), price changes (+50 basis points), market movement (commodities) (-50 basis points), manufacturing & logistics (-170 basis points), and other factors (-280 basis points).

Net Earnings Attributable to The Clorox Company

• Net earnings were $163 million, down from $332 million in the prior-year quarter.

Operating Costs

• Selling and administrative expenses were $298 million, compared to $296 million in the prior-year quarter.
• Advertising costs increased to $216 million from $171 million in the prior-year quarter.
• Research and development costs remained flat at $32 million.

Operating Profit (EBIT and Adjusted EBIT)

• EBIT was $267 million, with an EBIT margin of 13.7%.
• Adjusted EBIT was $318 million, with an Adjusted EBIT margin of 16.3%.

Cash Flow

• Capital expenditures were $86 million, and depreciation and amortization expense was $78 million.
• Net cash provided by operations was $330 million, representing 16.9% of net sales.

Fourth-Quarter Fiscal Year 2026 Key Segment Results

Health and Wellness

• Net sales increased 16%, driven by 10 points of higher volume and 6 points of favorable price mix, with the GOJO acquisition contributing approximately 28 points.
• Organic sales declined 12%, primarily due to the impact of lapping incremental ERP-related shipments.
• Segment adjusted EBIT decreased 15%.
• Reported Volume increased by 10%, while Organic Volume decreased by -15%.

Household

• Net sales decreased 18%, driven by 16 points of lower volume and 2 points of unfavorable price mix.
• Segment adjusted EBIT decreased 56%.
• Reported and Organic Volume both decreased by -16%.

Lifestyle

• Net sales decreased 17%, driven by 14 points of lower volume and 3 points of unfavorable price mix.
• Segment adjusted EBIT decreased 60%.
• Reported and Organic Volume both decreased by -14%.

International

• Net sales increased 4%, primarily due to favorable foreign exchange rates, with organic sales growing 1%.
• Segment adjusted EBIT increased 17%.
• Reported and Organic Volume both decreased by -1%.

Fiscal Year 2026 Financial Summary

Net Sales

• Total net sales decreased 5% to $6.72 billion, with organic sales decreasing 8%.
• The GOJO acquisition added about 3 points to sales, while organic sales were negatively impacted by approximately 7.5 points due to the ERP transition in the fourth quarter.

Gross Margin

• Gross margin decreased 290 basis points to 42.3% from 45.2% in the prior-year period.
• This was primarily driven by lower net sales and higher manufacturing and logistics costs, partially offset by cost savings.
• The ERP-related shipment comparison reduced gross margin by about 100 basis points, and GOJO transaction-related costs had a negative impact of about 50 basis points.
• GAAP Gross Margin was 42.3%, and Adjusted Gross Margin was 42.8%.
• Key drivers for the change in gross margin included cost savings (+160 basis points), price changes (+50 basis points), market movement (commodities) (-50 basis points), manufacturing & logistics (-170 basis points), and other factors (-280 basis points).

Net Earnings Attributable to The Clorox Company

• Net earnings were $587 million, compared to $810 million in the prior-year period.

Cash Flow

• Net cash provided by operations was $612 million, a 38% decrease from $981 million in fiscal year 2025, mainly due to the Glad Venture Agreement termination payment.
• Capital expenditures totaled $207 million, and depreciation and amortization expense was $247 million.
• Net cash provided by operations was $612 million, or 9.1% of net sales.
• Adjusted Free Cash Flow for fiscal year 2026 was $881 million, up from $761 million in fiscal year 2025, representing 13.1% of net sales in fiscal year 2026 versus 10.7% in fiscal year 2025.
• This includes a $476 million add-back for a venture agreement termination payment in fiscal year 2026.

Operating Costs

• Selling and administrative expenses were $1,066 million, compared to $1,124 million in fiscal year 2025.
• Advertising costs were $749 million, down from $770 million in fiscal year 2025.
• Research and development costs were $116 million, compared to $121 million in fiscal year 2025.

Operating Profit (EBIT and Adjusted EBIT)

• EBIT was $913 million, with an EBIT margin of 13.6%.
• Adjusted EBIT was $1,030 million, with an Adjusted EBIT margin of 15.3%.
• Adjustments to EBIT for fiscal year 2026 included $58 million for acquisition and integration costs and $59 million for digital capabilities and productivity enhancements investment.

Fiscal Year 2027 Outlook

• The Clorox Company anticipates net sales to increase by 13% to 14%, with organic sales projected to grow by approximately 3.5% to 4.5%.
• Gross margin is expected to be around 42%, reflecting inflationary pressures and a negative mix.
• Diluted EPS is forecasted to range between $5.41 and $5.71, while adjusted EPS is projected to be between $5.70 and $6.00, including an estimated $0.29 per share in acquisition and integration costs.