Clorox’s fourth quarter results were met with a negative market reaction, as flat year-on-year sales masked underlying challenges in profitability and margins. Management highlighted that operational disruptions from the final phase of its ERP (Enterprise Resource Planning) rollout, coupled with heightened promotional activity in key categories like trash bags and cat litter, weighed on margins. CEO Linda Rendle noted, “We saw sequential improvement in the quarter, but share performance remains below our long-term goals,” underscoring the need for renewed focus on innovation and category management.
Is now the time to buy CLX? Find out in our full research report (it’s free for active Edge members).
Clorox (CLX) Q4 CY2025 Highlights:
- Revenue: $1.67 billion vs analyst estimates of $1.64 billion (flat year on year, 1.9% beat)
- Adjusted EPS: $1.39 vs analyst expectations of $1.43 (3% miss)
- Adjusted EBITDA: $311 million vs analyst estimates of $310.6 million (18.6% margin, in line)
- Management reiterated its full-year Adjusted EPS guidance of $6.13 at the midpoint
- Operating Margin: 14%, in line with the same quarter last year
- Organic Revenue fell 1% year on year (beat)
- Market Capitalization: $14.46 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Clorox’s Q4 Earnings Call
- Andrea Teixeira (J.P. Morgan): Asked about competitive intensity and promotional activity. CEO Linda Rendle confirmed the environment is back to pre-pandemic levels, particularly in trash bags and cat litter, with Clorox responding through strategic promotions and innovation.
- Peter Grom (UBS): Inquired about the timing and expected impact of new product launches. CFO Luc Bellet clarified most shelf resets for innovations will occur late in the third and early in the fourth quarter, with investments already underway.
- Filippo Falorni (Citi): Questioned gross margin outlook and pricing dynamics. Bellet explained that gross margin should expand in the fourth quarter as supply chain costs normalize and benefits from cost-saving programs and the Glad JV termination materialize.
- Kevin Grundy (BNP Paribas): Pressed on the willingness to make further price investments amid consumer pressure. CEO Linda Rendle stated they would make targeted price reductions if necessary, leveraging revenue growth management tools to protect share without sacrificing long-term margin goals.
- Robert Moskow (TD Cowen): Raised concerns about integrating Gojo (Purell) while addressing weaknesses in core categories. Rendle assured that dedicated teams and a phased integration approach would allow Clorox to maintain focus on both the core and new businesses.
Catalysts in Upcoming Quarters
In the quarters ahead, the StockStory team will track (1) the pace and consumer uptake of Clorox’s new product launches and relaunches, (2) the realization of expected margin improvements as supply chain and ERP-related costs normalize, and (3) the progress and strategic impact of the Gojo integration on health and hygiene segment growth. Sustained category share recovery and effective management of promotional intensity will also be key factors to watch.
Clorox currently trades at $119.63, up from $114.98 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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