Clorox Lowers FY2026 Guidance Amid GOJO Acquisition Costs and ERP Inventory Pull‑back

Clorox’s third‑quarter results showed flat net sales of $1.67 billion, with organic sales slipping 1% and gross margin slipping 140 basis points to 43.2%. Diluted EPS rose modestly 3% to $1.54, while non‑GAAP adjusted EPS jumped 13% to $1.64, underscoring the mixed impact of cost pressures and one‑time gains.

Cash flow pressure was stark: year‑to‑date cash from operations plunged 59% to $282 million, driven largely by a termination payment tied to the Glad joint‑venture. The company highlighted a slate of product innovations—from Hidden Valley Ranch to Burt’s Bees—and a string of brand accolades, but those positives were outweighed by the financial headwinds.

Strategic moves: The April 1 completion of the GOJO acquisition adds the Purell brand and a health‑hygiene platform to Clorox’s portfolio. Management estimates the deal contributes roughly +3 points to FY2026 net‑sales growth, but also drags on earnings by $0.30‑$0.40 per share in transaction costs and 2‑4 cents of adjusted‑EPS dilution.

Segment performance was uneven. Household sales rose 3% and adjusted EBIT surged 21% thanks to volume gains in cat litter and grilling products. International sales climbed 8% (organic +2%) with a 16% EBIT lift. Conversely, Lifestyle sales fell 9% and Health & Wellness was flat, with a 7% EBIT dip from higher manufacturing and logistics costs.

Revised outlook: Clorox now projects FY2026 gross margin down 250‑300 basis points, SG&A at 16% of sales, and advertising at 11% of sales. The effective tax rate remains near 24%. The guidance incorporates a $0.90‑per‑share EPS headwind from the ERP inventory reversal, $0.37 of digital‑capability investment, and higher energy costs.

Market reaction: The stock rose 1.8% to $96.48 in early trading, buoyed by the Purell addition but tempered by the lower earnings outlook. Analysts will watch whether the GOJO integration can offset the near‑term earnings drag and whether the ERP draw‑down is a one‑off event.

Management will field questions in a conference call at 4:15 p.m. ET, followed by a live Q&A webcast at 5:00 p.m. ET, with CEO Linda Rendle and CFO Luc Bellet leading the discussion.