The Clorox Company (CLX) Q1 2026 earnings summary

Executive summary

• Achieved a major milestone with the successful U.S. ERP system launch, strengthening digital capabilities and unlocking new value streams.

• Q1 FY26 saw a 19% decline in net sales to $1.43B, mainly due to lower shipments as retailers drew down inventory built ahead of the ERP transition.

• Gross margin fell 410 basis points to 41.7%, impacted by lower volume and higher manufacturing/logistics costs.

• Diluted EPS dropped 19% to $0.65, reflecting lower net sales and gross profit, partially offset by the absence of the prior-year divestiture loss.

• Strategic focus remains on demand creation, innovation, and regaining market share in the back half of the year.

Financial highlights

• Organic sales in Q1 declined about 3% excluding ERP impact; underlying performance was about -1%.

• Net earnings attributable to shareholders were $80 million, down from $99 million in the prior year.

• Operating cash flow was $93 million, a decrease from $221 million year-over-year, mainly due to lower cash earnings and working capital changes.

• Capital expenditures totaled $36 million, and $129 million was used for share repurchases.

• Dividends paid per share increased to $2.48 from $2.44.

Outlook and guidance

• Organic sales growth expected to be negative low single digits in the front half, turning positive low single digits in the back half, excluding ERP impact.

• FY26 net sales expected to decline 6%–10%; organic sales down 5%–9%.

• Gross margin expansion anticipated in Q3 and Q4, but full-year margin projected to decrease 50–100 basis points.

• EPS run rate for next year should add back the $0.90 ERP transition impact; diluted EPS guidance for FY26 is $5.60–$5.95.

• Management remains focused on investing in brands, capabilities, and people to drive long-term growth.