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Why Is Clorox (CLX) Down 4.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Clorox (CLX - Free Report) . Shares have lost about 4.1% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Clorox due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.
Clorox Q1 Earnings Beat Estimates, Organic Sales Fall 17% Y/Y
Clorox reported first-quarter fiscal 2026 results, wherein both the top and bottom lines beat the Zacks Consensus Estimate but decreased on a year-over-year basis. Also, organic sales fell year over year.
Taking a Sneak Peek at CLX’s Quarterly Performance
The company posted adjusted earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 78 cents. This represents a 54% decrease from $1.86 per share in the same quarter last year on soft net sales related to the ERP transition.
Net sales of $1.43 billion dipped 19% from the year-ago quarter, mainly due to lower shipments with respect to the ERP transition. Organic sales dropped 17%, owing to lower volumes associated with its ERP transition. However, the metric beat the consensus mark of $1.38 billion.
Gross profit plunged 26.1% year over year to $596 million. We note that the gross margin contracted 410 basis points (bps) year over year to 41.7%, thanks to reduced volumes and elevated manufacturing and logistics costs, partly offset by cost savings.
Discussion on Segments
Sales of the Health and Wellness segment fell 19% year over year to $565 million, reflecting a 16-point decrease in volume and a three-point unfavorable price mix. Our model predicted segment sales of $516.5 million. Volumes fell on lower shipments and price mix was owing to solid shipments to the Club channel. The segment adjusted EBIT plunged 47% on soft sales, and elevated manufacturing and logistics costs.
The Household segment reported a 19% year-over-year decrease in net sales to $362 million, due to a one-point unfavorable price mix and lower volumes. Our model predicted sales of $362.1 million for the segment. Segment adjusted EBIT slipped 55%, mainly due to weak sales.
Sales in the Lifestyle segment tumbled 23% year over year to $245 million, reflecting a one-point negative price mix and lower volumes. We expected net sales of $265.5 million for the segment. Segment adjusted EBIT decreased 42%, primarily due to lower sales, somewhat offset by reduced advertising investments year over year.
The International segment saw a 2% drop in net sales of $253 million, due to lower volumes and shipments associated with the ERP transition. Organic sales also fell 2%. We expected net sales of $253.8 million for the segment. Segment adjusted EBIT plunged 46%, mainly due to increased manufacturing and logistics costs.
Clorox's Financial Update
Clorox ended the quarter with cash and cash equivalents of $166 million, long-term debt of $2.49 billion and stockholders’ deficit equity of $22 million, excluding the non-controlling interest of $160 million.
Guidance for FY26
Management is maintaining fiscal 2026 outlook for net sales, gross margin and adjusted EPS. The impact of the order fulfillment headwinds seen earlier in the year caused consumption and market share losses, trimming the company's current projections toward the lower end of the range.
Net sales are still expected to decline 6-10% compared with the prior year. This projection includes less than one percentage point of negative impact from the divestiture of the VMS business and changes in foreign exchange rates. Organic sales are anticipated to decrease 5-9%, largely caused by a 7.5 percentage point decline due to the reversal of incremental shipments made in the previous year as part of the ERP transition.
Earnings per share (EPS) are anticipated to be between $5.60 and $5.95, representing a year-over-year decrease of 9-14%. This guidance includes a negative impact of approximately 90 cents per share, stemming from the reversal of incremental shipments associated with the ERP transition in the prior year.
Adjusted EPS is still envisioned to be between $5.95 and $6.30, indicating a decline of 18-23% from the previous year. This figure excludes the estimated 35 cents per share impact from long-term investments in digital capabilities and productivity enhancements, while accounting for the 90 cents per share negative impact related to the ERP-related shipment reversal.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Clorox has a average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Clorox has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Clorox belongs to the Zacks Consumer Products - Staples industry. Another stock from the same industry, Newell Brands (NWL - Free Report) , has gained 16.9% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.
Newell Brands reported revenues of $1.81 billion in the last reported quarter, representing a year-over-year change of -7.2%. EPS of $0.17 for the same period compares with $0.16 a year ago.
For the current quarter, Newell Brands is expected to post earnings of $0.18 per share, indicating a change of +12.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.7% over the last 30 days.
Newell Brands has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Why Is Clorox (CLX) Down 4.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Clorox (CLX - Free Report) . Shares have lost about 4.1% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Clorox due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.
Clorox Q1 Earnings Beat Estimates, Organic Sales Fall 17% Y/Y
Clorox reported first-quarter fiscal 2026 results, wherein both the top and bottom lines beat the Zacks Consensus Estimate but decreased on a year-over-year basis. Also, organic sales fell year over year.
Taking a Sneak Peek at CLX’s Quarterly Performance
The company posted adjusted earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 78 cents. This represents a 54% decrease from $1.86 per share in the same quarter last year on soft net sales related to the ERP transition.
Net sales of $1.43 billion dipped 19% from the year-ago quarter, mainly due to lower shipments with respect to the ERP transition. Organic sales dropped 17%, owing to lower volumes associated with its ERP transition. However, the metric beat the consensus mark of $1.38 billion.
Gross profit plunged 26.1% year over year to $596 million. We note that the gross margin contracted 410 basis points (bps) year over year to 41.7%, thanks to reduced volumes and elevated manufacturing and logistics costs, partly offset by cost savings.
Discussion on Segments
Sales of the Health and Wellness segment fell 19% year over year to $565 million, reflecting a 16-point decrease in volume and a three-point unfavorable price mix. Our model predicted segment sales of $516.5 million. Volumes fell on lower shipments and price mix was owing to solid shipments to the Club channel. The segment adjusted EBIT plunged 47% on soft sales, and elevated manufacturing and logistics costs.
The Household segment reported a 19% year-over-year decrease in net sales to $362 million, due to a one-point unfavorable price mix and lower volumes. Our model predicted sales of $362.1 million for the segment. Segment adjusted EBIT slipped 55%, mainly due to weak sales.
Sales in the Lifestyle segment tumbled 23% year over year to $245 million, reflecting a one-point negative price mix and lower volumes. We expected net sales of $265.5 million for the segment. Segment adjusted EBIT decreased 42%, primarily due to lower sales, somewhat offset by reduced advertising investments year over year.
The International segment saw a 2% drop in net sales of $253 million, due to lower volumes and shipments associated with the ERP transition. Organic sales also fell 2%. We expected net sales of $253.8 million for the segment. Segment adjusted EBIT plunged 46%, mainly due to increased manufacturing and logistics costs.
Clorox's Financial Update
Clorox ended the quarter with cash and cash equivalents of $166 million, long-term debt of $2.49 billion and stockholders’ deficit equity of $22 million, excluding the non-controlling interest of $160 million.
Guidance for FY26
Management is maintaining fiscal 2026 outlook for net sales, gross margin and adjusted EPS. The impact of the order fulfillment headwinds seen earlier in the year caused consumption and market share losses, trimming the company's current projections toward the lower end of the range.
Net sales are still expected to decline 6-10% compared with the prior year. This projection includes less than one percentage point of negative impact from the divestiture of the VMS business and changes in foreign exchange rates. Organic sales are anticipated to decrease 5-9%, largely caused by a 7.5 percentage point decline due to the reversal of incremental shipments made in the previous year as part of the ERP transition.
Earnings per share (EPS) are anticipated to be between $5.60 and $5.95, representing a year-over-year decrease of 9-14%. This guidance includes a negative impact of approximately 90 cents per share, stemming from the reversal of incremental shipments associated with the ERP transition in the prior year.
Adjusted EPS is still envisioned to be between $5.95 and $6.30, indicating a decline of 18-23% from the previous year. This figure excludes the estimated 35 cents per share impact from long-term investments in digital capabilities and productivity enhancements, while accounting for the 90 cents per share negative impact related to the ERP-related shipment reversal.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Clorox has a average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Clorox has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Clorox belongs to the Zacks Consumer Products - Staples industry. Another stock from the same industry, Newell Brands (NWL - Free Report) , has gained 16.9% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.
Newell Brands reported revenues of $1.81 billion in the last reported quarter, representing a year-over-year change of -7.2%. EPS of $0.17 for the same period compares with $0.16 a year ago.
For the current quarter, Newell Brands is expected to post earnings of $0.18 per share, indicating a change of +12.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.7% over the last 30 days.
Newell Brands has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.