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Clorox sees FY26 net sales fall of 6% and adjusted EPS of $5.45-$5.65, with a 250-300 bps margin drop.
The Clorox Company (CLX - Free Report) delivered mixed third-quarter fiscal 2026 results, with the top and bottom lines topping the Zacks Consensus Estimate. The bottom line increased year over year, while the top line remained flat.
CLX Q3 Key Metrics & Insights
Adjusted earnings were $1.64 per share, rising 13% year over year from $1.45 in the prior-year period and beating the consensus mark of $1.48 by 10.81%. Performance was supported by cost savings, and lower advertising and selling expenses.
The Clorox Company Price, Consensus and EPS Surprise
The company reported net sales of $1,670 million, which were flat year over year, while beating the Zacks Consensus Estimate of $1,648 million by 1.36%. Organic sales decreased 1%.
Clorox’s Margin & Cost Performance
CLX reported a 2.6% increase in cost of products sold to $948 million from $924 million in the prior-year period.
Gross profit declined 2.9% to $722 million from $744 million a year ago, reflecting the margin headwinds and a slightly higher cost base. The gross margin fell 140 basis points year over year to 43.2% from 44.6% in the prior-year period. The primary pressures were higher manufacturing and logistics costs and an unfavorable mix, which more than offset the benefits from cost savings.
While margin contracted, the company’s selling and administrative expenses fell 14.2% year over year to $229 million from $267 million, helping offset cost inflation and mix pressures, and advertising costs also decreased 14.5% to $177 million from $207 million.
Deep Dive Into Clorox’s Segmental Results
Health and Wellness sales were $629 million, remaining flat year over year, while beating the Zacks Consensus Estimate of $621 million. Performance was supported by a 1-point increase in volume, net of incremental shipments ahead of consumption in the prior quarter, while offset by an unfavorable price mix. Segmental adjusted EBIT declined 7% year over year to $158 million from $169 million due to higher manufacturing and logistics costs, partially offset by cost-saving initiatives.
While Household sales increased 3% to $482 million from $469 million, driven by a 3-point volume gain from shipments ahead of consumption in the Cat Litter and Grilling categories, beating the Zacks Consensus Estimate of $454 million. Segmental adjusted EBIT rose 21% year over year to $74 million from $61 million, primarily supported by cost-saving initiatives.
Lifestyle revenues declined 9% to $277 million from $306 million, driven by a 6-point volume decrease, primarily reflecting lower consumption and retail inventory adjustments, which also lagged the Zacks Consensus Estimate of $299 million. Segment adjusted EBIT remained essentially flat at $60 million, as lower net sales were offset by reduced advertising investments, and lower selling and administrative expenses.
International revenues increased 8% to $285 million from $263 million, driven by favorable foreign exchange rates and higher volume. This also beat the Zacks Consensus Estimate of $281 million. Segmental adjusted EBIT increased 16% to $36 million from $31 million, primarily supported by higher net sales and cost savings, partially offset by increased manufacturing and logistics costs.
CLX Updates FY26 Outlook
Clorox updated its fiscal 2026 outlook, expecting net sales to decline 6%, including slightly less than 3 points of benefit from the GOJO acquisition, less than 1 point of headwind from the VMS divestiture and a small positive impact of foreign exchange. Organic sales are expected to decline 9%, indicating a 7.5-point drag from the reversal of incremental shipments tied to prior-year ERP transition effects.
The gross margin is projected to decline 250-300 basis points compared with the prior mentioned decline of 50-100 basis points, led by GOJO-related costs, ERP reversal impacts and higher energy costs linked to the Middle East conflict. Selling and administrative expenses are expected to remain at about 16% of net sales. This outlook continues to include approximately 90 basis points of impact from strategic investments in digital capabilities and productivity enhancements.
Adjusted EPS is expected between $5.45 and $5.65, suggesting a decline of 27% to 29%. The outlook includes 2-4 cents of dilution from the GOJO acquisition, reflecting one quarter of contribution, along with higher interest expenses.
Clorox Other Financial Insights
CLX ended the quarter with cash and cash equivalents of $1,187 million, up from $226 million in the year-ago period. The company’s long-term debt stood at $2,487 million, while total stockholders’ equity was $92 million as of March 31, 2026. The net cash provided by operations was $282 million in the year-to-date period versus $687 million in the year-ago period, reflecting a 59% decline that the company attributed primarily to the Glad joint venture agreement termination payment.
Shares of this current Zacks Rank #3 (Hold) company have lost 14.8% in the past three months compared with the industry’s 7.6% decline.
Image Source: Zacks Investment Research
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Krispy Kreme, Inc. (DNUT - Free Report) produces doughnuts in the United States,the U.K., Ireland, Australia, New Zealand, Mexico, Canada, Japan, and internationally. At present, DNUT sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DNUT’s current fiscal-year sales implies a decline of 8.2%, and the same for earnings implies growth of 120% from the year-ago reported figures. DNUT delivered a trailing four-quarter earnings surprise of 14.6%, on average.
ARKO Corp. (ARKO - Free Report) operates a chain of convenience stores in the United States. ARKO currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for ARKO's current fiscal-year sales implies a decline of 4.9% from the year-ago reported figure, while the same for earnings implies growth of 73.3%. ARKO delivered a trailing four-quarter earnings surprise of 36.5%, on average.
B&G Foods, Inc. (BGS - Free Report) manufactures, sells, and distributes a portfolio of shelf-stable and frozen foods and household products. BGS currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for B&G Foods’ current fiscal-year earnings implies growth of 5.9% from the year-ago actual. BGS delivered a trailing four-quarter negative earnings surprise of 19.5%, on average.
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CLX Q3 Earnings Beat Estimates on Lower Spending, Cost Savings
Key Takeaways
The Clorox Company (CLX - Free Report) delivered mixed third-quarter fiscal 2026 results, with the top and bottom lines topping the Zacks Consensus Estimate. The bottom line increased year over year, while the top line remained flat.
CLX Q3 Key Metrics & Insights
Adjusted earnings were $1.64 per share, rising 13% year over year from $1.45 in the prior-year period and beating the consensus mark of $1.48 by 10.81%. Performance was supported by cost savings, and lower advertising and selling expenses.
The Clorox Company Price, Consensus and EPS Surprise
The Clorox Company price-consensus-eps-surprise-chart | The Clorox Company Quote
The company reported net sales of $1,670 million, which were flat year over year, while beating the Zacks Consensus Estimate of $1,648 million by 1.36%. Organic sales decreased 1%.
Clorox’s Margin & Cost Performance
CLX reported a 2.6% increase in cost of products sold to $948 million from $924 million in the prior-year period.
Gross profit declined 2.9% to $722 million from $744 million a year ago, reflecting the margin headwinds and a slightly higher cost base. The gross margin fell 140 basis points year over year to 43.2% from 44.6% in the prior-year period. The primary pressures were higher manufacturing and logistics costs and an unfavorable mix, which more than offset the benefits from cost savings.
While margin contracted, the company’s selling and administrative expenses fell 14.2% year over year to $229 million from $267 million, helping offset cost inflation and mix pressures, and advertising costs also decreased 14.5% to $177 million from $207 million.
Deep Dive Into Clorox’s Segmental Results
Health and Wellness sales were $629 million, remaining flat year over year, while beating the Zacks Consensus Estimate of $621 million. Performance was supported by a 1-point increase in volume, net of incremental shipments ahead of consumption in the prior quarter, while offset by an unfavorable price mix. Segmental adjusted EBIT declined 7% year over year to $158 million from $169 million due to higher manufacturing and logistics costs, partially offset by cost-saving initiatives.
While Household sales increased 3% to $482 million from $469 million, driven by a 3-point volume gain from shipments ahead of consumption in the Cat Litter and Grilling categories, beating the Zacks Consensus Estimate of $454 million. Segmental adjusted EBIT rose 21% year over year to $74 million from $61 million, primarily supported by cost-saving initiatives.
Lifestyle revenues declined 9% to $277 million from $306 million, driven by a 6-point volume decrease, primarily reflecting lower consumption and retail inventory adjustments, which also lagged the Zacks Consensus Estimate of $299 million. Segment adjusted EBIT remained essentially flat at $60 million, as lower net sales were offset by reduced advertising investments, and lower selling and administrative expenses.
International revenues increased 8% to $285 million from $263 million, driven by favorable foreign exchange rates and higher volume. This also beat the Zacks Consensus Estimate of $281 million. Segmental adjusted EBIT increased 16% to $36 million from $31 million, primarily supported by higher net sales and cost savings, partially offset by increased manufacturing and logistics costs.
CLX Updates FY26 Outlook
Clorox updated its fiscal 2026 outlook, expecting net sales to decline 6%, including slightly less than 3 points of benefit from the GOJO acquisition, less than 1 point of headwind from the VMS divestiture and a small positive impact of foreign exchange. Organic sales are expected to decline 9%, indicating a 7.5-point drag from the reversal of incremental shipments tied to prior-year ERP transition effects.
The gross margin is projected to decline 250-300 basis points compared with the prior mentioned decline of 50-100 basis points, led by GOJO-related costs, ERP reversal impacts and higher energy costs linked to the Middle East conflict. Selling and administrative expenses are expected to remain at about 16% of net sales. This outlook continues to include approximately 90 basis points of impact from strategic investments in digital capabilities and productivity enhancements.
Adjusted EPS is expected between $5.45 and $5.65, suggesting a decline of 27% to 29%. The outlook includes 2-4 cents of dilution from the GOJO acquisition, reflecting one quarter of contribution, along with higher interest expenses.
Clorox Other Financial Insights
CLX ended the quarter with cash and cash equivalents of $1,187 million, up from $226 million in the year-ago period. The company’s long-term debt stood at $2,487 million, while total stockholders’ equity was $92 million as of March 31, 2026. The net cash provided by operations was $282 million in the year-to-date period versus $687 million in the year-ago period, reflecting a 59% decline that the company attributed primarily to the Glad joint venture agreement termination payment.
Shares of this current Zacks Rank #3 (Hold) company have lost 14.8% in the past three months compared with the industry’s 7.6% decline.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks have been discussed below:
Krispy Kreme, Inc. (DNUT - Free Report) produces doughnuts in the United States,the U.K., Ireland, Australia, New Zealand, Mexico, Canada, Japan, and internationally. At present, DNUT sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DNUT’s current fiscal-year sales implies a decline of 8.2%, and the same for earnings implies growth of 120% from the year-ago reported figures. DNUT delivered a trailing four-quarter earnings surprise of 14.6%, on average.
ARKO Corp. (ARKO - Free Report) operates a chain of convenience stores in the United States. ARKO currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for ARKO's current fiscal-year sales implies a decline of 4.9% from the year-ago reported figure, while the same for earnings implies growth of 73.3%. ARKO delivered a trailing four-quarter earnings surprise of 36.5%, on average.
B&G Foods, Inc. (BGS - Free Report) manufactures, sells, and distributes a portfolio of shelf-stable and frozen foods and household products. BGS currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for B&G Foods’ current fiscal-year earnings implies growth of 5.9% from the year-ago actual. BGS delivered a trailing four-quarter negative earnings surprise of 19.5%, on average.