The Clorox Company (CLX) Q4 2024 earnings summary

Executive summary

• Fiscal year 2024 ended with operational strength, full supply and distribution restoration, and most market share recovered after a significant cyberattack earlier in the year.

• Organic sales were flat for the year, overcoming an 18% organic sales decline in Q1 due to the cyberattack.

• Q4 net sales declined 6% to $1.9B, with organic sales down 3% year-over-year, mainly due to Argentina divestiture, unfavorable price mix, and lower volume.

• Achieved seventh consecutive quarter of margin expansion and another year of double-digit adjusted EPS growth.

• FY24 net sales decreased 4% to $7.1B; adjusted EPS increased 21% to $6.17, reflecting pricing and margin gains.

Financial highlights

• Delivered double-digit adjusted EPS growth for the year; FY24 adjusted EPS up 21% to $6.17.

• Gross margin expanded for the seventh consecutive quarter; FY24 gross margin increased 360 bps to 43.0% year-over-year.

• Q4 gross margin outperformed expectations, reaching 46.5% (+380 bps), driven by favorable business unit mix, cost savings, and commodity deflation.

• Free cash flow targeted at 12% of sales for fiscal 2025, returning to long-term goal range.

• Net cash from operations was $695M, down 40% from FY23.

Outlook and guidance

• Fiscal 2025 guidance targets 3%-5% organic sales growth, primarily volume-driven, with modestly negative price/mix due to increased trade spending.

• FY25 gross margin expected to rise ~100 bps; adjusted EPS guidance $6.55–$6.80, up 6–10%.

• EBIT margin expected to reach 17%-17.5% in fiscal 2025, nearing historical levels of 18%.

• Free cash flow as a percent of sales targeted at 12% for fiscal 2025.

• Promotional environment expected to normalize to pre-COVID levels; spend levels for advertising and promotion to remain at 11%-11.5% of sales.