Company Reports

With its entrenched retail standing and unrelenting focus on investing in its leading brand mix, Clorox has withstood the onslaught of pressures from covid, supply chain angst, rampant inflation, and an August 2023 cybersecurity attack. More recently, it has acknowledged a step-up in industrywide promotional spending, particularly in litter, bags, and wraps. Still, we don't believe this suggests an irrational competitive landscape or that the firm is pursuing a volume-over-value strategy. Instead, we believe Clorox remains committed to long-term investments to maintain its competitive edge.

Clorox's fourth-quarter organic sales slumped 13% as it lapped the retail inventory buildup ahead of its ERP rollout a year ago. The adjusted gross margin compressed 370 basis points to 42.8% as volume deleverage and inflation outpaced cost savings.

With its entrenched retail standing and unrelenting focus on investing in its leading brand mix, Clorox has withstood the onslaught of pressures from covid, supply chain angst, rampant inflation, and an August 2023 cybersecurity attack. More recently, it has acknowledged a step-up in industrywide promotional spending, particularly in litter, bags, and wraps. Still, we don't believe this suggests an irrational competitive landscape or that the firm is pursuing a volume-over-value strategy. Instead, we surmise Clorox remains committed to investing for the long term, ensuring its competitive edge remains intact.

On May 28, CEO Linda Rendle announced her decision to step down for health reasons. The firm has begun a search for a replacement, but she intends to stay on in the interim and will continue to serve in an advisory capacity even after a successor is named.

Clorox's organic sales slipped 1%, reflecting lower prices and an unfavorable mix. Higher manufacturing and logistics costs, combined with negative mix (a 310-basis-point hit), outpaced cost savings (a 170-basis-point benefit), resulting in 140-basis-point erosion in gross margins to 43.2%.

With its entrenched retail standing and unrelenting focus on investing in its leading brand mix, Clorox has withstood the onslaught of pressures from covid, supply chain angst, rampant inflation, and an August 2023 cybersecurity attack. More recently, it has acknowledged a step-up in industrywide promotional spending, particularly in litter, bags, and wraps. Still, we don't believe this suggests an irrational competitive landscape or that the firm is pursuing a volume-over-value strategy. Instead, from our perspective, Clorox remains resolute in investing to support the long-term health of the business, ensuring its competitive edge remains intact.

Organic sales ticked down 1% in Clorox's fiscal second quarter, driven by lower volumes. Cost savings (a 170-basis-point benefit) were unable to offset higher manufacturing and logistics costs (a 240-basis-point headwind), resulting in a decline in gross margin to 43.2%.

On Jan. 22, Clorox announced a tie-up with Gojo Industries, owner of the Purell brand. The $2.25 billion deal equates to less than 3 times sales and 12 times adjusted EBITDA, when including $330 million in anticipated tax benefits. The debt-financed transaction is to close by the end of June 2026.

With its entrenched retail standing and unrelenting focus on investing behind its leading brand mix, Clorox has withstood the onslaught of pressures from covid, supply chain angst, rampant inflation, and an August 2023 cybersecurity attack. More recently, it has acknowledged a step-up in promotional spending, particularly in litter, bags, and wraps. Still, we don't believe this suggests an irrational competitive landscape or that the firm is pursuing a volume-over-value strategy. Instead, from our perspective, Clorox remains resolute in investing to support the long-term health of the business, ensuring its competitive edge remains intact.

Clorox reported a 17% drop in organic sales, as retail inventory was depleted during its enterprise resource planning implementation. This volume deleverage also constrained gross margins, which fell 410 basis points to 41.7%; cost savings largely offset higher manufacturing and logistics costs.

With its entrenched retail standing and unrelenting focus on investing behind its leading brand mix, Clorox has withstood the onslaught of pressures from covid, supply chain angst, rampant inflation, and an August 2023 cybersecurity attack. More recently, it has acknowledged a step-up in promotional spending, particularly in litter, bags, and wraps. Still, we don't believe this suggests an irrational competitive landscape or that the firm is pursuing a volume-over-value strategy. Rather, from where we sit, Clorox remains resolute in investing to support the long-term health of the business to ensure its competitive edge holds.

Clorox chalked up 8% organic sales growth to close out fiscal 2025, but this reflected a 13- to 14-point benefit from retailer inventory stocking ahead of ERP rollout. The 46.5% gross margin also included a 150-basis-point lift from the inventory build, which will unwind in the fiscal first quarter.

With its entrenched retail standing and unrelenting focus on investing behind its leading brand mix, Clorox has withstood the onslaught from covid, supply chain pressures, rampant inflation, and an August 2023 cybersecurity attack. More recently, it has acknowledged a step-up in promotional spending, particularly in litter, bags, and wrap. Still, we don't believe this suggests an irrational competitive landscape or that the firm is pursuing a volume-over-value strategy. Rather, we think Clorox remains resolute in investing to support the long-term health of the business and ensure its competitive edge holds.

Clorox reported a 2% organic sales decline due to lower prices and unfavorable mix. However, its gross margin jumped 240 basis points to 44.6%, reflecting cost savings (a 170-basis-point benefit) and the divestitures of its lower-margin vitamins and Argentina businesses (a 50-basis-point benefit).

With its entrenched retail standing and unwavering focus on investing behind its leading brand mix, Clorox has withstood the onslaught from covid, supply chain pressures, rampant inflation, and an August 2023 cybersecurity attack. More recently, it has acknowledged a step-up in promotional spending, particularly in litter, bags, and wrap. Still, we don't believe this suggests an irrational competitive landscape or that the firm is pursuing a volume-over-value strategy. Rather, we think Clorox remains resolute in investing to support the long-term health of the business and ensure its competitive edge holds.

With its entrenched retail standing and its unwavering focus on investing behind its leading brand mix, Clorox has withstood the onslaught from covid, supply chain pressures, rampant inflation, and an August 2023 cybersecurity attack. More recently, it has acknowledged a step-up in promotional spending (particularly within the litter, bags, and wrap aisles), but we don't surmise this suggests an irrational competitive landscape or that the firm is pursuing a volume over value strategy. Rather, we posit Clorox remains resolute in investing to support the long-term health of the business to ensure its stout competitive edge holds.

Lapping the retail inventory rebuild from its August 2023 cyberattack, Clorox's organic sales fell 9% (largely on compressed volumes), and its operating margin contracted 410 basis points to 15.3% in its fiscal second quarter.

With its entrenched retail standing and its unwavering focus on investing behind its leading brand mix, Clorox has withstood the onslaught from covid, supply chain pressures, rampant inflation, and an August 2023 cybersecurity attack. More recently, it has acknowledged a step-up in promotional spending, but we don't surmise this suggests an irrational competitive landscape or that the firm is pursuing a volume over value strategy. Rather, we posit Clorox remains resolute in investing to support the long-term health of the business to ensure its stout competitive edge holds.

Organic sales for Clorox were up a whopping 31% in the quarter, entirely driven by higher volumes. However, this was an anomaly, as it compared with an 18% collapse last year on the heels of its August 2023 cyberattack.

The fruits of Clorox's work to put pronounced inflationary headwinds and supply chain angst to rest were sidelined as a cybersecurity breach in mid-August 2023 forced it to take some information technology systems (including ordering) offline. Although this initially strangled sales and profits, we don’t surmise the firm’s competitive edge has been eroded. On the contrary, we think its entrenched standing with retailers will continue to enable it to build back its shelf position, similar to its inventory revival coming out of the pandemic.