The Clorox Company (CLX) Q2 2026 earnings summary

Executive summary

• Net sales for Q2 FY2026 were $1.67 billion, down 1% year-over-year, with organic sales also down 1% and six-month net sales at $3.10 billion, down 10% due to lower shipments and divestitures.

• Diluted EPS for the quarter was $1.29, a 16% decrease year-over-year, and adjusted EPS was $1.39, down 10%, reflecting lower sales and lapping prior-year insurance recoveries.

• Sequential improvement was seen in Q2, with stronger exit rates and early signs of share gains in January.

• Strategic priorities include advancing digital transformation, innovation, and the planned $2.25 billion acquisition of GOJO Industries, to be funded primarily through debt.

• The company also agreed to purchase P&G's 20% interest in the Glad business for $476 million.

Financial highlights

• Gross margin for the quarter was 43.2%, down 60 basis points year-over-year, mainly due to higher manufacturing and logistics costs.

• EBIT margin in the household segment was 5.3%, pressured by promotions and logistics costs.

• Operating cash flow for the six months was $404 million, up 1% year-over-year, driven by lower working capital and tax payments.

• The company repurchased 2.16 million shares for $254 million and paid $3.72 per share in dividends over six months.

• Q2 benefited from higher-than-expected shipments due to ERP transition, expected to reverse in Q3.

Outlook and guidance

• Full-year net sales are expected to decline 6% to 10%, with organic sales down 5% to 9%.

• Gross margin is projected to decrease by 50 to 100 basis points, with expansion expected in Q4 as ERP-related costs subside.

• Diluted EPS guidance is $5.60–$5.95 (down 14% to 9% year-over-year); adjusted EPS: $5.95–$6.30 (down 23% to 18%).

• Innovation launches and demand plans are expected to drive stronger share and sales performance in H2.

• Inventory drawdown from ERP transition expected to reduce FY2026 EPS by about $0.90.