OAKLAND, California, May 1, 2026, 14:01 PDT
Shares of The Clorox Company dropped roughly 9.6% to $87.11 Friday after the consumer products giant slashed its outlook for fiscal 2026 profit. The company blamed margin pressure on rising energy expenses, the timing of retail inventory, and additional costs linked to its Purell acquisition.
The cut takes on added weight now, as household-products makers feel the pinch on both ends—shoppers are scrutinizing prices, but fuel, freight, and commodities aren’t getting any cheaper. According to Reuters, fallout from the Middle East conflict is nudging consumer-goods companies to revisit both pricing and expenses. Clorox, for one, is seeing its margins come under strain.
Clorox is still working through a rough patch of internal shifts. The company announced it wrapped up the third and final phase of its U.S. ERP rollout—a business software overhaul that touches finance, orders, and supply chains—but said costs tied to stabilizing the system have overshot forecasts.
The company cut its adjusted earnings per share outlook for fiscal 2026, now seeing $5.45 to $5.65, down from the previous $5.95 to $6.30 range. Diluted EPS guidance landed at $4.78 to $4.98. Organic sales—which leave out acquisitions, divestitures, and currency swings—are expected to drop about 9%.
Third-quarter sales held steady at $1.67 billion. Adjusted earnings per share climbed 13% to $1.64, thanks in part to tighter costs and reduced spending on advertising and admin, though gross margin slipped 140 basis points, landing at 43.2%. For reference, a basis point equals one-hundredth of a percentage point.
Linda Rendle, the company’s chair and CEO, described the quarter as “mixed.” She noted several businesses lagged behind in regaining market share. For the outlook, Rendle flagged persistent challenges with consumers and costs, saying there’s still “more work to do.” Q4 Capital
Management pointed to continued value-seeking across the quarter. Higher-income consumers gravitated toward bigger pack sizes and opted for club stores, while those with lower incomes leaned into smaller, less expensive picks. That divergence matters for Clorox’s lineup—Glad, Brita, Burt’s Bees, Fresh Step, Hidden Valley—since shelf space and promotional tactics often decide if shoppers stick with branded goods or switch down.
There’s the GOJO acquisition to factor in now. Clorox wrapped up its purchase of GOJO Industries, the Purell maker, on April 1. The buyout brings health and hygiene lines under Clorox’s roof, but it’s not all upside—there are some upfront costs to contend with. According to the company, GOJO should contribute around $200 million in sales for the fourth quarter and just under three percentage points to sales in fiscal 2026. Adjusted EPS, though, will take a 2 to 4 cent hit.
On the earnings call, Chief Financial Officer Luc Bellet told analysts Clorox is budgeting for oil at around $100 a barrel in the fourth quarter. That’s pushing up costs by $20 million to $25 million and shaving roughly 130 basis points off gross margin. As for next year, Bellet flagged the uncertainty: “It’s very hard to predict what might happen,” he said. The Motley Fool
Pressure isn’t confined to one name. On Friday, Colgate-Palmolive flagged an extra $300 million in raw material and logistics costs tied to turmoil in the Middle East. Procter & Gamble, according to Reuters, has also signaled a significant profit squeeze from pricier oil inputs. On the day, Clorox lagged both stocks. Procter & Gamble barely moved, while Colgate-Palmolive ended higher.
Segment performance was mixed. Household sales climbed 3%, with cat litter and grilling products doing the heavy lifting on volume. Lifestyle lagged, dropping 9% after lower consumption and retail inventory shifts. International sales put up an 8% gain, driven by both volume and favorable currency. Health and Wellness? Little movement there.
That reset isn’t all downside. There’s a shot the outlook lands on the cautious side—oil could slide, ERP headaches might clear, and Purell settles in without drama. Still, if consumers keep holding back and promo wars heat up, Clorox could end up shelling out even more just to hang onto shelf space, dragging out any margin bounce until fiscal 2027.
Clorox isn’t trimming its brand support, sticking with plans to allocate roughly 11% of net sales to advertising and sales promotion. Now comes the fourth quarter, where management is bracing for a roughly 13% drop in organic sales—much of that tied to last year’s ERP-related shipment timing.
