Clorox Posts $1.91 Billion in Sales, Raises EPS 114% in First Quarter
Key Facts
Clorox reported net sales of $1.91 billion in the first quarter of fiscal 2027, ended September 30, 2026, up 33% year over year, while diluted earnings per share rose 114% to $1.39. The company released its results and updated outlook on November 2, maintaining its annual sales range and adjusted earnings per share outlook while lowering its gross margin estimate. Organic sales increased 18%, while the GOJO acquisition added about 15 percentage points to quarterly sales growth. The figures reflect strong improvement in sales and earnings from the year-earlier period, but the company linked part of organic sales growth to a comparison with inventory drawdown in the prior year. It said assumptions for input costs and acquisition synergies support the update, while inflationary pressures make adjusted earnings more likely to be near the low end of its annual range.
Adjusted earnings per share increased 82% to $1.55 from $0.85 in the year-earlier period. Clorox attributed the improvement mainly to higher sales, cost savings and a lower tax rate, with continued pressure from commodity, manufacturing and logistics costs. By contrast, gross margin fell 130 basis points to 40.4% from 41.7%. The company said higher commodity, manufacturing and logistics costs were the main reason for the decline, while higher volume and cost savings offset part of it. GOJO inventory growth also affected margin by about 50 basis points during the quarter.
Clorox maintained its fiscal 2027 net sales growth outlook at 13% to 14%, organic sales growth at 3.5% to 4.5%, and adjusted earnings per share at $5.70 to $6.00. The net sales growth estimate includes about 9.5 percentage points from GOJO. But the company lowered its annual gross margin forecast to about 41.5% and set selling and administrative expenses at about 15.5% of sales. It said higher-than-usual inflation and an unfavorable product mix outweigh cost savings and pricing actions. Based on its latest assumptions for input costs and acquisition synergies, the company expects adjusted earnings to come in near the low end of the annual range.
Quarterly organic sales growth reflects Clorox's benefit from comparing against inventory drawdown related to the enterprise resource planning system transition in the year-earlier period. The company had said that moving beyond the effect of this drawdown would add more than 3.5 percentage points to net sales growth in fiscal 2027. In the fourth quarter of fiscal 2026, net sales fell 2% to $1.95 billion, organic sales dropped 13%, while the GOJO acquisition added about 10 points to sales. For fiscal 2026 as a whole, net sales declined 5% to $6.72 billion, and organic sales fell 8%. Gross margin also dropped in the fourth quarter to 41.3% from 46.5%, a decline of 520 basis points.
The results come ahead of an expected leadership transition at the company; Clorox appointed Fabian Garcia chief executive effective January 5, 2027, while Linda Rendle remains chair and chief executive until he takes over. Rendle and Chief Financial Officer Luc Bellet were scheduled to discuss the results in a live question-and-answer webcast at 5 p.m. Eastern Time on the day they were announced. The EL7 data provided did not include prices after October 30, 2026, so it does not provide a measure of the stock's movement after the results were released on November 2.