- Price
- $83.80 → $87.09(+3.9%)
- Discount
- 45.6% → 43.4%(−2.1 pts)
- Next earnings is estimate
- Yes → No
- Thesis
- Clorox finished a five-year project to replace its old ERP computer system in early 2026. The switchover caused a swing in retailer orders, and fiscal 2026 organic sales fell 8%. Gross margin fell 2.9 points, and the switchover caused only about one point of that drop. Investors fear that the rest shows lasting share loss to store brands, higher costs and a stressed consumer. Management guides fiscal 2027 organic sales growth of about 3.5% to 4.5%. More than 3.5 points of that growth come from the easy comparison with the weak prior year, so the underlying growth is about flat. Debt for the GOJO (Purell) purchase and the Glad joint-venture buyout raised net debt to about four times EBITDA, a common measure of operating profit, by our calculation. S&P cut the credit rating in February 2026, and the board has not yet named a new CEO. For the gap to close, three conditions must be true. Organic sales must grow as guided, after a first-quarter decline that management already expects. Net debt must fall toward management's target of about 2.5 times EBITDA by the end of calendar 2027. The board must name a permanent CEO with a clear plan. The first test is the first-quarter fiscal 2027 report, expected in early on November 2, 2026, where the full-year outlook must hold. The second-quarter and third-quarter reports in 2027 then show whether gross margin and GOJO profit recover. If these hold, the gap can close over the next four to six quarters. If sales disappoint again or the CEO search continues for a long time, the discount can stay into 2028.
- Checkpoints
- Nov 2, 2026 (estimate): Fiscal Q1 2027 earnings: full-year outlook holds. Pending. Watch: A first-quarter sales decline no larger than management warned, an unchanged fiscal 2027 outlook and lower net debt pass; a cut to the sales or earnings outlook fails.
Feb 2027 (estimate): Fiscal Q2 2027 earnings: margin repair and GOJO. Pending. Watch: Gross margin growth and GOJO profit in line with plan pass; a guidance cut or a new credit downgrade fails.
Q1 2027 (estimate): Board names a permanent CEO. Pending. Watch: A named successor with a clear plan for GOJO and debt reduction passes; a search that continues past fiscal Q3 2027 fails.
Dec 2027 (estimate): Leverage back near 2.5 times EBITDA. Pending. Watch: Net leverage near 2.5 times by the end of calendar 2027 passes; leverage still above 3.5 times fails.
- Recent events
- 2026-10-12: Clorox confirmed that it will publish its first-quarter fiscal 2027 results on November 2, 2026, at 4:15 p.m. ET, with an analyst webcast at 5 p.m. ET.
2026-09-28: Clorox combined its CloroxPro business and GOJO into one professional unit, Clorox Purell ProCare, which sells to hospitals, schools, offices and other businesses.
2026-09-09: At the Barclays Global Consumer Staples Conference, Clorox kept its fiscal 2027 outlook. Management said that first-quarter organic sales will fall because of the timing of retailer promotions, that input cost inflation will be more than $200 million, and that gross margin can fall a little more than the outlook shows.
2026-08-03: Clorox reported fiscal 2026 results. Net sales fell 5% to $6.72 billion, organic sales fell 8%, and adjusted earnings per share fell 28% to $5.53. For fiscal 2027, Clorox guided net sales growth of 13% to 14% with GOJO, organic sales growth of about 3.5% to 4.5%, gross margin of about 42%, and adjusted earnings per share of $5.70 to $6.00.
2026-07-31: Clorox increased its quarterly dividend to $1.25 per share from $1.24.
2026-06-17: Clorox named Chris Hyder Executive Vice President and Chief Operating Officer, and Nina Barton Executive Vice President and Chief Growth and Strategy Officer.
2026-05-28: CEO Linda Rendle asked the board to start a search for her successor. She is free of cancer, but the side effects of treatment that prevents a return of breast cancer caused her decision. She stays Chair and CEO until the board names a successor.
2026-04-01: Clorox completed its purchase of GOJO Industries, the maker of Purell. The announced price was $2.25 billion, or $1.92 billion after expected tax benefits. Clorox paid about $2.15 billion in cash at closing, with commercial paper and a new term loan.
2026-03-25: A California judge dismissed the intentional misrepresentation claim in Clorox's lawsuit against Cognizant, but kept most of the lawsuit. No trial date is public.
2026-03-02: Clorox paid $476 million in cash for the 20% interest that Procter & Gamble held in the Glad bags and wraps joint venture. The joint-venture agreement ended on January 31, 2026, and the agreement required Clorox to buy this interest at fair value.
2026-02-18: In February 2026, S&P Global Ratings cut Clorox's long-term credit rating to BBB from BBB+. The cut came after Clorox agreed in January 2026 to buy GOJO with new debt.
2025-07-22: Clorox sued its IT services contractor, Cognizant, for about $380 million in the Superior Court of Alameda County, California. Clorox says that during the August 2023 cyberattack, Cognizant's service desk reset passwords and multi-factor login for a caller who claimed to be an employee.