CLX

Defensive

Clorox

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2008–2025(18yr)

Revenue

Net Income

Free CF

Metric	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$5.3B	$5.2B	$5.2B	$5.2B	$5.5B	$5.6B	$5.5B	$5.7B	$5.8B	$6.0B	$6.1B	$6.2B	$6.7B	$7.3B	$7.1B	$7.4B	$7.1B	$7.1B	+0.2%
Gross Profit	$2.2B	$2.3B	$2.5B	$2.3B	$2.3B	$2.4B	$2.4B	$2.5B	$2.6B	$2.7B	$2.7B	$2.7B	$3.1B	$3.2B	$2.5B	$2.9B	$3.0B	$3.2B	+5.4%
Gross Margin	41.2%	45.5%	47.3%	43.5%	42.1%	42.9%	42.8%	43.6%	45.1%	44.7%	43.7%	43.9%	45.6%	43.6%	35.8%	39.4%	43.0%	45.2%	+2.3pp
Net Income	$461.0M	$537.0M	$603.0M	$557.0M	$541.0M	$572.0M	$558.0M	$580.0M	$648.0M	$701.0M	$823.0M	$820.0M	$939.0M	$710.0M	$462.0M	$149.0M	$280.0M	$810.0M	+189.3%
Net Margin	8.7%	10.4%	11.5%	10.6%	9.9%	10.2%	10.1%	10.3%	11.2%	11.7%	13.4%	13.2%	14.0%	9.7%	6.5%	2.0%	3.9%	11.4%	+7.5pp
Free Cash Flow	$560.0M	$541.0M	$616.0M	$470.0M	$420.0M	$581.0M	$629.0M	$749.0M	$606.0M	$637.0M	$780.0M	$786.0M	$1.3B	$945.0M	$535.0M	$930.0M	$483.0M	$761.0M	+57.6%
FCF Margin	10.6%	10.5%	11.8%	9.0%	7.7%	10.3%	11.4%	13.2%	10.5%	10.7%	12.7%	12.6%	19.2%	12.9%	7.5%	12.6%	6.8%	10.7%	+3.9pp
EPS (Diluted)	$3.23	$3.79	$4.24	$4.02	$4.09	$4.30	$4.23	$4.37	$4.92	$5.33	$6.26	$6.32	$7.36	$5.58	$3.73	$1.20	$2.25	$6.52	+189.8%

Total Debt$2.5B

Cash & Equiv.$167.0M

Net Debt$2.3B

3 min read

1. THE BIG PICTURE

Clorox is attempting a high-stakes operational pivot, trading short-term sales stability for a "digital transformation" intended to modernize its aging infrastructure. While it maintains a formidable competitive moat—holding the top two market positions for 80% of its brands—Clorox is currently hamstrung by a self-inflicted inventory drawdown and a $476 million obligation to buy out Procter & Gamble’s interest in the Glad business.

2. WHERE THE RISKS HIT HARDEST

Brand Dominance vs. Private Labels: Clorox’s reliance on "trusted and recognized consumer brand names" (Competitive Position) is directly threatened by the rise of retailers’ private-label products (Risks). This threat is magnified by customer concentration; because Walmart and four other retailers account for nearly half of all sales, Clorox has limited power to resist if these partners pivot toward their own lower-cost alternatives.
Operational Strategy vs. ERP Disruption: The "IGNITE" strategy’s focus on a "streamlined operating model" (10-K Item 1) is currently being undermined by the very system meant to enable it. The transition to a new ERP platform caused a "transitory" inventory drawdown that contributed to a 1% decline in quarterly net sales and a 16% drop in earnings per share (8-K).

3. WHAT THE NUMBERS SAY TOGETHER

Clorox’s financial profile reveals a highly efficient cash generator that has run out of momentum. Its 43.4% gross margin and 10.6% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin both rank 2nd among its peer group (XBRL), yet its revenue growth of +0.2% trails nearly all competitors. The recent 16% drop in quarterly EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric to $1.29 highlights the earnings volatility management warned would accompany the Glad venture wind-down and the final phases of the ERP shift (10-Q).

The divergence between the flat TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter growth (+0.2%) and management’s full-year guidance for a 6% to 10% sales contraction is structural. This decline is attributed to earlier order fulfillment challenges and a shift in consumer behavior toward larger, lower-margin product sizes in the Household segment (8-K). Furthermore, a short interest of 7.1% of the float suggests a significant portion of the market is skeptical that these headwinds are merely "transitory."

4. IS IT WORTH IT AT THIS PRICE?

At 17.0x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Clorox trades exactly in line with the peer median (XBRL). According to the CAPM analysis, the market is pricing in ~1.7% long-term growth. This expectation appears optimistic given that management expects results to hit the "lower end of the range" for fiscal 2026, with sales potentially falling as much as 10% (8-K).

While Clorox offers a robust 4.4% dividend yield and a 2.9% buyback yield—ranking 2nd among peers for shareholder returns—the 17.0x multiple assumes a return to growth that the current environment does not yet support. If growth remains stagnant or follows management's downward guidance, the justified multiple would likely compress toward the 16.3x level implied by lower-growth scenarios.

5. WHAT WOULD CHANGE THIS VIEW?

Constructive if the International segment’s 7% growth accelerates, proving the portfolio can offset domestic stagnation and private-label pressure (8-K).
Cautious if the Glad venture repurchase price exceeds the $476 million estimate, further straining a balance sheet that already carries $2.6 billion in net debt (XBRL).
Cautious if the 27% sales concentration with Walmart increases, further eroding Clorox's pricing power against private-label substitutes.

6. BOTTOM LINE

Structural Advantage: Dominant market share (No. 1 or No. 2 in 80% of categories) and high free cash flow conversion. Bottom Line: Clorox is a premium cash generator currently stalled by a complex internal transformation, making its peer-average valuation look expensive relative to its own shrinking sales guidance.

Source: Synthesis · LLM Analysis

3 min read

1. Top 5 Material Risks

Macroeconomic and Geopolitical Volatility: Unfavorable conditions—including inflation, supply chain disruptions, and geopolitical conflicts in Ukraine and the Middle East—threaten to reduce consumer demand and increase costs for raw materials, energy, and logistics.
Market Maturity and Competition: With 86% of net sales derived from U.S. markets, Clorox faces high levels of competition from retailers’ "private label" brands and larger multinational competitors, which can lead to reduced net sales and margins.
Strategic and Transformational Execution: The implementation of a new ERP system and other cost-savings initiatives carries risks of business disruption, including potential failures in processing transactions, managing inventory, or fulfilling customer orders.
Concentration of Key Customers: Clorox relies heavily on a small number of retailers; Walmart Stores, Inc. and its affiliates accounted for 27% of consolidated net sales in fiscal year 2025, and the top five customers accounted for nearly half of total sales.
Glad Venture Repurchase Obligation: The expiration of the Glad venture agreement on January 31, 2026, requires Clorox to purchase the remaining 20% interest from Procter & Gamble, creating earnings volatility as the fair value of this obligation is adjusted through the cost of products sold.

2. Company-Specific Risks

Cybersecurity Vulnerabilities: Following an August 2023 cyberattack, Clorox remains exposed to risks of data breaches, ransomware, and operational disruptions that could exceed the limits of its cybersecurity insurance coverage.
Charcoal Business Permits: Clorox’s charcoal business is specifically identified as being subject to the risk of losing necessary permits and registrations, which could prevent Clorox from meeting product demand or introducing new products.
Digital Transformation Costs: The multi-year phased upgrade of digital capabilities and ERP replacement requires significant investment of personnel and financial resources, with potential for cost overruns and system inefficiencies.
Environmental Remediation Liabilities: Clorox maintains a recorded liability of $27 million as of June 30, 2025, for environmental remediation, specifically tied to former operations in Alameda County, California, and Dickinson County, Michigan.

3. Regulatory/Legal Risks

Tax Legislation: The enactment of the "One Big Beautiful Bill Act" on July 4, 2025, introduces new provisions for U.S. corporate taxpayers that Clorox is currently evaluating for potential impacts on its consolidated financial statements.
Global Anti-Base Erosion (Pillar Two): Clorox is subject to the "Pillar Two" minimum 15% tax rules in certain foreign jurisdictions, which may impact its effective tax rate.
Environmental Compliance: Clorox faces potential increased costs or mandatory funding obligations under extended producer responsibility regulations, such as plastic or packaging taxes and waste management programs.
Product Liability and Labeling: Clorox is subject to ongoing legal risks regarding advertising claims, consumer class actions, and potential product recalls, which may not be fully covered by existing insurance policies.

4. Financial Impact Map

Macroeconomic and Geopolitical Volatility → Net Sales and Results of Operations → Sustained uncertainty reduces consumer purchasing power and increases costs for raw materials and logistics.

Market Maturity and Competition → Net Earnings and Profits → Increased promotional spending and potential shifts to lower-margin "private label" products compress margins.

Concentration of Key Customers → Net Sales and Net Earnings → A reduction in shelf space or pricing demands from top customers like Walmart (27% of sales) directly impacts revenue.

Glad Venture Repurchase Obligation → Cost of Products Sold → Changes in the estimated fair value of the $476 million obligation are charged to this line item until the agreement expires.

Environmental Remediation Liabilities → Cash Flow → The $27 million recorded liability represents future expenditures that reduce cash available for other corporate purposes.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
8-K	Feb 2026	—
10-Q	Feb 2026	Dec 2025
10-K	Aug 2025	Jun 2025