The Clorox Company (CLX) Q2 2026 earnings summary

Executive summary

• Q2 results were largely in line with expectations despite macroeconomic volatility, ERP transition impacts, and a 1% year-over-year net sales decline to $1.67 billion.

• Diluted EPS for the quarter was $1.29, down 16% year-over-year, reflecting lower sales and lapping prior-year tax and insurance benefits.

• Announced the planned $2.25 billion acquisition of GOJO Industries to expand the health and hygiene portfolio, to be funded primarily through debt.

• Strategic priorities include advancing digital transformation, innovation, and operational efficiency.

• Completed final phase of ERP implementation, with stabilization ongoing.

Financial highlights

• Gross margin for the quarter was 43.2%, down 60 basis points year-over-year due to higher manufacturing and logistics costs.

• EBIT margin in the household segment was 5.3%, pressured by higher promotions and supply chain costs.

• Operating cash flow for the six months was $404 million, up 1% year-over-year.

• Q2 pricing was flat overall, with negative pricing in the household segment due to increased promotions and channel shifts.

• The company repurchased 2.16 million shares for $254 million and paid $3.72 per share in dividends over six months.

Outlook and guidance

• Reaffirmed full-year guidance, expecting category growth of 0%-1% in the back half, but full-year net sales are expected to decline 6%-10% and organic sales 5%-9%.

• Gross margin is projected to decrease by 50 to 100 basis points, with expansion expected in the back half as ERP-related costs subside.

• Diluted EPS guidance is $5.60–$5.95 (down 14% to 9% year-over-year); adjusted EPS $5.95–$6.30 (down 23% to 18%).

• Innovation launches and shelf resets are expected to drive share and sales growth in late Q3 and Q4.

• Inventory drawdown from ERP transition expected to reduce FY2026 EPS by about $0.90.