Clorox Q4 revenue and adjusted EPS beat expectations despite sales drop

Overview

• U.S. household products maker's Q4 revenue beat analyst expectations despite 2% yr/yr decline

• Adjusted EPS for Q4 beat consensus, though fell 42% yr/yr on lower sales and margin

• Company completed GOJO acquisition, expanding health and hygiene portfolio

Outlook

• Clorox expects FY27 net sales to rise 13%-14%, including about 9.5 points from GOJO acquisition

• Company sees FY27 organic sales up about 3.5%-4.5%, benefiting from lapping ERP-related drawdown

• Clorox projects FY27 adjusted EPS between $5.70 and $6.00, up 3%-8% from prior year

Result Drivers

• ERP TRANSITION IMPACT - Co said organic sales fell 13% in Q4, mainly due to lapping last year's incremental shipments related to its ERP transition

• GOJO ACQUISITION - GOJO acquisition added about 10 points to Q4 net sales and contributed to Health and Wellness segment growth

• MARGIN PRESSURE - Gross margin fell 520 basis points, driven by lower volume, GOJO inventory step-up, and higher commodity, manufacturing and logistics costs

Company press release: ID:nPn2X4tjja

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 15 "hold" and 4 "sell" or "strong sell"

• The average consensus recommendation for the household products peer group is "buy."

• Wall Street's median 12-month price target for Clorox Co is $97.50, about 2.1% above its July 31 closing price of $95.53

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 15 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)