The Clorox Company — First Quarter Fiscal Year 2027 Earnings Summary

Financial Performance:

• Net sales increased 33% year-over-year to $1.91 billion, driven by a 15-point impact from the GOJO acquisition and 18% organic sales growth.
• Gross margin decreased 130 basis points to 40.4% from 41.7% in the prior year quarter, impacted by higher commodity, manufacturing, and logistics costs, partially offset by volume and cost savings; the GOJO inventory step-up negatively impacted margin by approximately 50 basis points.
• Diluted net earnings per share (EPS) increased 114% to $1.39 from $0.65 in the prior year quarter, reflecting lapping of digital capability investments and productivity enhancements, partially offset by GOJO transaction costs.
• Adjusted EPS increased 82% to $1.55 from $0.85 in the prior year quarter, driven by higher net sales, cost savings, and a lower tax rate, partially offset by higher commodity and logistics costs; the prior year quarter included a 90-cent benefit from lapping an ERP-related inventory drawdown.
• Year-to-date net cash provided by operations was $143 million, a 54% increase compared to $93 million in the prior year period.
• Segment adjusted EBIT increased 69% for Health and Wellness, 11% for Household, 58% for Lifestyle, and 63% for International.

Guidance and Future Outlook:

• Full-year fiscal 2027 net sales are expected to increase 13% to 14% compared to the prior year, including approximately 9.5 points of benefit from the GOJO acquisition.
• Full-year fiscal 2027 organic sales growth is expected to be 3.5% to 4.5%, including more than 3.5 points of benefit from lapping the ERP-related inventory drawdown in the prior fiscal year.
• Full-year fiscal 2027 gross margin is now expected to be approximately 41.5%, reflecting higher-than-normal inflationary headwinds and negative mix, including a 20 basis point negative impact from the GOJO inventory step-up.
• Full-year fiscal 2027 selling and administrative expenses are now expected to be approximately 15.5% of net sales, including a 40 basis point negative impact from GOJO transaction-related costs.
• Full-year fiscal 2027 advertising and sales promotion spending is expected to be approximately 10% of net sales (12% for retail businesses).
• Full-year fiscal 2027 effective tax rate is expected to be approximately 23%.
• Full-year fiscal 2027 diluted EPS is expected to be between $5.41 and $5.71, representing a 12% to 19% year-over-year increase, including approximately 29 cents of impact from GOJO transaction-related costs.
• Full-year fiscal 2027 adjusted EPS is expected to be between $5.70 and $6.00, representing a 3% to 8% year-over-year increase.

Business Segments and Product Lines:

• Health and Wellness (Cleaning; Professional Products) net sales increased 62%, driven by 55 points of higher volume and 7 points of favorable price mix; the GOJO acquisition contributed approximately 39 points to this growth.
• Household (Bags and Wraps; Cat Litter; Grilling) net sales increased 17%, driven by 17 points of higher volume primarily from lapping the ERP transition-related inventory drawdown.
• Lifestyle (Food; Water Filtration; Natural Personal Care) net sales increased 16%, driven by 15 points of higher volume and 1 point of favorable price mix.
• International net sales increased 11%, with organic sales growing 9% driven by volume growth supported by strong shipments in Latin America.
• Officially launched Clorox Purell ProCare, unifying CloroxPro and GOJO with a single sales and service organization.
• Introduced new product innovations including Burt's Bees Hydrating Lip Balms and Lip Tints in squeeze tube format, Purell Hand Sanitizer Sprays in new scents, seasonal Glad, Pine-Sol, and Clorox Scentiva offerings, and Hidden Valley Ranch Spooky Ranch.

Market and Competitive Landscape:

• The company was named one of the World's Most Trustworthy Companies by Newsweek and recognized among America's Most Innovative Companies by Forbes and Business Insider.
• The company continues to invest in consumer-inspired innovation across its portfolio to deliver variety and seasonal options.

Risks and Challenges:

• The cost environment has become more challenging with higher inflationary pressures reflected in the updated outlook.
• Future results are subject to risks related to the integration of Clorox Purell ProCare, including the ability to realize synergies, adapt to a B2B operating model, and manage potential channel conflicts.
• Risks include increased regulatory exposure from FDA-regulated products in the GOJO portfolio, potential impairment charges on intangible assets, and disruption of ongoing business operations.
• Macroeconomic and geopolitical risks include inflation, supply chain disruptions, labor shortages, wage pressures, fuel and energy costs, foreign currency fluctuations, and active armed conflicts in the Middle East and Ukraine.
• Risks related to the company's reliance on third-party service providers, potential cyberattacks, and the ability to successfully execute strategic initiatives.

Management Commentary and Tone:

• Chair and CEO Linda Rendle stated the company delivered better-than-expected results through strong execution and timing benefits, despite navigating continued input cost pressures.
• Management expressed confidence in the strength of the long-term trajectory and the ability to create sustainable value for shareholders.
• The company delivered one of the strongest quarters of cost savings on record while continuing to advance productivity initiatives.

Other Key Points:

• The company completed the acquisition of GOJO Industries on April 1, 2026, which is now operating as Clorox Purell ProCare.
• The company incurred approximately $26 million ($20 million after tax) in acquisition and integration costs related to the GOJO acquisition during the quarter.
• The company expects to incur approximately $46 million ($35 million after tax) in GOJO-related costs in fiscal year 2027.
• The ERP transition-related inventory drawdown in the prior year reduced fiscal year 2026 earnings per share by approximately 90 cents.
• The company's digital capabilities and productivity enhancements investment, totaling approximately $580 million, was completed in the third quarter of fiscal year 2026.