The Clorox Company CLX is scheduled to report fourth-quarter fiscal 2026 results on Aug. 3, after market close, and is likely to have registered declines in the top and bottom lines.
The Zacks Consensus Estimate for revenues is pegged at $1.91 billion, indicating a drop of 4.1% from the prior-year quarter’s reported figure. The consensus mark for quarterly earnings has moved down 5.2% in the past 30 days to $1.64 per share. The consensus mark indicates a decline of 42.9% from the prior-year quarter.
The Zacks Consensus Estimate for Clorox’s quarterly revenues is pegged at $6.7 billion, implying a 5.9% decline from the year-ago quarter’s reported number. For fiscal 2026, the consensus mark is pegged at $5.52 per share, suggesting 28.5% growth from the prior-year reported figure. The consensus mark has moved down 2.1% in the past 30 days.
The consumer and professional product company has a trailing four-quarter earnings surprise of 11.3%, on average. CLX surpassed earnings estimates by 10.8% in the last reported quarter.
Factors Likely to Influence CLX’s Q4 Results
Clorox entered fiscal 2026 with expectations that the back half of the year would mark a return to stronger execution after ERP-related disruptions. However, on the last reported quarter’s earnings call, management acknowledged that the anticipated recovery has been slower than expected, with the fiscal third-quarter results falling short of internal expectations. While the company cited continued strength in cleaning products and international markets, several businesses failed to recover at the expected pace, resulting in weaker-than-planned market share gains and margin performance.
Several of Clorox's important categories continue to experience operational and competitive headwinds despite heavy investments. Fresh Step litter, one of the company's largest turnaround priorities, is undergoing a complete product reset involving new formulations, packaging, pricing architecture and SKU conversions. Meanwhile, the Food segment faces declining category demand, aggressive competitive discounting and potential consumer shifts related to GLP-1 weight-loss drug adoption. Although Hidden Valley has launched products and adjusted packaging, management admitted category weakness remains a drag.
On the last reported quarter’s earnings call, management admitted that the turnaround in its Litter business will be a "multi-year process," suggesting that a meaningful recovery remains some distance away. The company also admitted that Food categories have been underperforming due to weaker category demand and heightened promotional intensity. Although management remains optimistic about fiscal 2027, the latest commentary suggests that restoring consistent organic sales momentum will require more time than previously anticipated.
Clorox has been confronting multiple layers of cost pressure that threaten profitability in the fiscal fourth quarter and beyond. Management highlighted higher-than-expected supply-chain expenses, delayed productivity savings due to ERP stabilization and a sharp increase in commodity costs following higher oil prices.
For fourth-quarter fiscal 2026 alone, the company expects $20-$25 million in incremental input-cost headwinds, equivalent to roughly 130 basis points (bps) in gross margin pressure, without any meaningful mitigation actions yet in place. While management emphasized confidence in their pricing and productivity toolkit, it also admitted that fiscal 2027 remains highly uncertain, given volatile energy markets and geopolitical developments.
The Clorox Company Price and EPS Surprise
The Clorox Company price-eps-surprise | The Clorox Company Quote
Apart from inflationary pressures, the GOJO acquisition introduces temporary gross-margin dilution and one-time integration costs, further weighing on profitability. The combination of elevated commodity inflation, deferred cost savings and acquisition-related expenses creates a difficult earnings backdrop, leaving investors exposed to additional estimate revisions if cost inflation persists longer than management currently anticipates.
Clorox expects fiscal 2026 net sales to decline 6%, including a slightly less than 3-percentage-point benefit from the GOJO Industries acquisition, less than one point of headwind from the VMS divestiture and a modest foreign exchange tailwind. Organic sales are projected to decline 9%, reflecting a 7.5-point drag from the reversal of incremental shipments made ahead of last year’s ERP transition.
For fiscal 2026, management expects the gross margin to fall 250-300 bps, including about 60 bps of headwinds from the GOJO acquisition, 100 bps tied to the ERP shipment reversal and additional headwinds from higher energy costs tied to the Middle East conflict. This setup raises the bar for execution in productivity and revenue management.
Our model predicts gross profit to decline 14.7% year over year to $788.2 million in fourth-quarter fiscal 2026. The gross margin is expected to have contracted 540 bps to 41.1% in the quarter under review. Our model expects operating income to decline 37.9% year over year in the fiscal fourth quarter, with an 820-bps contraction in operating margin.
What the Zacks Model Unveils for CLX
Our proven model does not conclusively predict an earnings beat for Clorox this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Clorox has an Earnings ESP of -3.52% and a Zacks Rank #4 (Sell) at present.
CLX’s Valuation & Price Performance
From the valuation standpoint, Clorox has a forward 12-month price-to-earnings ratio of 16.43X, which is below the industry’s average of 18.93X. Also, the stock is trading below its five-year high of 35.61X.
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CLX shares have risen 14.4% in the past three months compared with the industry’s growth of 5.3%.
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Stocks With the Favorable Combination
Here are companies that, according to the model, have the right combination of elements to beat on earnings this reporting cycle.
Archer Daniels Midland Company ADM currently has an Earnings ESP of +3.43% and a Zacks Rank #2. ADM is anticipated to register top- and bottom-line growth when it reports second-quarter 2026 results. The Zacks Consensus Estimate for Archer Daniels’ quarterly revenues is pegged at $22.4 billion, indicating growth of 5.7% from the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Archer Daniels’ earnings is pegged at $1.27 per share, which indicates growth of 36.6% from the year-ago quarter. ADM delivered an earnings surprise of 5.4% in the trailing four quarters, on average.
Newell Brands Inc. NWL has an Earnings ESP of +5.36% and a Zacks Rank #2 at present. NWL is likely to register top-line growth when it releases second-quarter 2026 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.97 billion, implying growth of 1.7% from the year-ago quarter.
The consensus estimate for Newell Brands’ quarterly earnings currently stands at 19 cents per share, suggesting a decline of 20.8% from the year-ago quarter. NWL has a trailing four-quarter average earnings surprise of 9.7%.
Church & Dwight Co. CHD has an Earnings ESP of +3.53% and a Zacks Rank of 3 at present. CHD is likely to register top- and bottom-line declines when it releases second-quarter 2026 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.5 billion, implying a decline of 0.2% from the year-ago quarter’s actual.
The consensus estimate for Church & Dwight’s quarterly earnings of 89 cents per share indicates a decline of 5.3% from the year-ago quarter’s reported number. CHD has a trailing four-quarter average earnings surprise of 6.5%.
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The Clorox Company (CLX): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).