CLX · The Clorox Company

The Clorox Company reported mixed results for its third quarter of fiscal year 2026, with net sales flat at $1.67 billion and organic sales down 1%. Gross margin contracted 140 basis points to 43.2%, driven by higher manufacturing and logistics costs and unfavorable mix, partially offset by cost savings. GAAP diluted EPS increased 3% to $1.54, while adjusted EPS rose 13% to $1.64, benefiting from cost savings, lower advertising investments, and lower selling and administrative expenses. Segment performance varied: Household net sales grew 3% on volume gains in Cat Litter and Grilling, while Lifestyle declined 9% due to lower consumption and retail inventory adjustments. International sales increased 8% on favorable FX and higher volume. The company completed its acquisition of GOJO Industries on April 1, expanding its portfolio with the Purell brand. Management noted a challenging consumer and cost environment and is focused on improving execution. The full-year outlook was revised downward: net sales now expected to decline about 6% (including ~3 points from GOJO), gross margin down 250-300 basis points, diluted EPS in the range of $4.78-$4.98, and adjusted EPS of $5.45-$5.65. Key headwinds include the ERP transition inventory drawdown (reducing EPS by ~$0.90) and GOJO transaction costs. The company continues to invest in digital capabilities and productivity enhancements.