Clorox Reports Strong Q4 Sales, Faces FY26 Growth Challenges

Clorox Company reported mixed financial results for 2025, with Q4 sales growth impacted by significant inventory buildup related to its new ERP system, leading to an adjusted organic sales decline of 5%, despite an overall reported 8% rise. The company achieved strong margin expansion, maintaining a gross margin of around 46.5%, and a notable 55% increase in diluted earnings per share to $2.68, supported partly by insurance recoveries from a prior cyberattack. Revenue for the second quarter rose 4.5% year-over-year to approximately $2 billion, and adjusted EPS exceeded expectations at $2.87, reflecting operational efficiencies and cost savings. However, Clorox anticipates a decline in net sales and earnings per share for fiscal year 2026 due to the reversal of ERP-related shipment benefits and ongoing market challenges including shifting consumer behaviors. Analysts maintain a cautious stance with a consensus 'Hold' recommendation and price targets indicating modest upside potential of around 11-15%. Despite near-term hurdles, Clorox remains confident in its long-term strategy focused on digital transformation, cost optimization, and brand resilience to drive future growth.