The Clorox Company (CLX) Q1 2025 earnings summary

Executive summary

• Entered fiscal 2025 with operational strength, fully restored supply, distribution, and market share post-cyberattack, and delivered results above expectations in Q1.

• Net sales rose 27% year-over-year to $1.76 billion, driven by volume recovery and lapping the August 2023 cyberattack.

• Achieved eighth consecutive quarter of gross margin expansion, with gross margin improving by 740 basis points to 45.8%.

• Diluted EPS increased 371% to $0.80, despite a $118 million after-tax loss on the divestiture of the Better Health VMS business.

• Completed divestiture of the VMS and Argentina businesses to reduce volatility and drive more consistent, profitable growth.

Financial highlights

• Q1 organic sales grew 31% year-over-year, with strong performance in health and wellness, home care, laundry, and PPD segments.

• Gross profit increased to $807 million from $532 million year-over-year.

• Net earnings attributable to Clorox were $99 million, up from $22 million in the prior year quarter.

• Operating cash flow was $221 million, a significant increase from $20 million a year ago.

• Adjusted EBIT increased 265% to $332 million.

Outlook and guidance

• Full-year organic sales growth expected at 4%, with 3%-5% growth projected for the back half, in line with long-term targets.

• Fiscal 2025 gross margin expected to rise 100–150 basis points, up from prior guidance of 100 basis points.

• Fiscal year diluted EPS outlook raised to $5.17–$5.42 (up 130–141% year-over-year); adjusted EPS now $6.65–$6.90 (up 8–12%).

• Q2 sales expected to decline in the low teens due to volume pull-forward from Q2 to Q1; gross margin in Q2 projected around 43%.

• Category growth assumed at 0%-1% for the year, with continued value-seeking consumer behavior.