Clorox beats first-quarter forecasts but says full-year profit will land near the low end of its range
Chief executive Linda Rendle says the cost environment has become more challenging, and gross margin for the year is now expected at about 41.5%.
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Clorox beat first-quarter forecasts but now expects full-year adjusted earnings per share closer to the low end of its $5.70 to $6.00 range. It reported after the US market closed on Monday. Earnings per share were $1.55, $0.47 better than expected, and revenue was $1.91B against $1.89B expected.
The reason is cost. Clorox now expects a gross margin of about 41.5% for the year, citing higher-than-normal inflationary headwinds. Chair and CEO Linda Rendle said the cost environment has become more challenging. She said the company has plans to mitigate the pressures while it keeps investing behind its brands. The quarter's upside looks outweighed by that pressure.
The rest of the outlook is unchanged. Net sales are still expected to rise 13% to 14%, including about 9.5 points from the GOJO acquisition. Organic sales are still expected to grow 3.5% to 4.5%, and diluted EPS is still expected between $5.41 and $5.71.
The margin pressure and the mitigation plans she describes will be among the first things on his desk.
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Clorox appoints Fabian Garcia as CEO, effective January 5, 2027, succeeding Linda Rendle, who will step down as CEO, chair and director on that date and serve as a senior advisor through April 2, 2027. Garcia, currently Business Group President, Personal Care at Unilever and a former CEO of Revlon, will join the board, while Matthew Shattock, the company's lead independent director, becomes Independent Chair with a $225,000 chair retainer. Rendle announced in May that she would step down for health reasons, and Garcia's offer letter includes a one-time sign-on award of restricted stock units with a target value of $11,000,000.