Clorox Organic Sales Rebound as ERP Drawdown Laps

The Tip Desk · November 2, 2026 · 3 min read

Organic sales rose 18% in the quarter ended Sept. 30, 2026, reversing a 13% organic decline in the prior quarter as the company lapped the ERP-related inventory drawdown.

The Clorox Company (CLX) reported net sales of $1.91 billion for the first quarter of fiscal 2027, up 33% from a year earlier, with the GOJO acquisition contributing about 15 points.

Organic sales increased 18%, a swing from a 13% organic decline in the immediately preceding quarter, as the company lapped the ERP transition-related inventory drawdown that had subtracted about 13.5 points from organic sales in the fourth quarter of fiscal 2026. The company said the organic gain reflected about 18 points of benefit from that lap.

Chair and CEO Linda Rendle said the company entered the fiscal year focused on steadily improving performance while navigating continued input-cost pressures and that it delivered better-than-expected results through strong execution and timing benefits.

Gross margin decreased 130 basis points to 40.4% from 41.7% a year earlier, primarily from higher commodity costs and higher manufacturing and logistics costs, partially offset by higher volume and cost savings. The inventory step-up of the GOJO acquisition accounted for about 50 basis points of the decline. That margin was 90 basis points below the 41.3% reported in the prior quarter, when the year-ago comparison had included a 520-basis-point drop.

Diluted net earnings per share increased 114% to $1.39 from $0.65 a year earlier. Adjusted EPS increased 82% to $1.55 from $0.85, primarily from higher net sales, cost savings and a lower tax rate, partially offset by higher commodity costs and higher manufacturing and logistics costs. The company said adjusted EPS growth included about 90 cents of benefit from lapping the ERP-related inventory drawdown. In the prior quarter, adjusted EPS had decreased 42%.

Health and Wellness, which includes Cleaning and Professional Products, was the largest contributor. Net sales in that segment increased 62%, with GOJO contributing approximately 39 points and organic sales up 23%. Segment adjusted EBIT increased 69%. The company officially launched Clorox Purell ProCare, combining CloroxPro and GOJO under a unified sales and service organization.

Household net sales increased 17% on 17 points of higher volume, which the company said was primarily driven by lapping the ERP-related inventory drawdown. Segment adjusted EBIT increased 11%. Lifestyle net sales increased 16%, with 15 points of volume and 1 point of favorable price mix; segment adjusted EBIT increased 58%. International net sales increased 11% and organic sales 9% on 9 points of organic volume, supported by shipments particularly in Latin America; segment adjusted EBIT increased 63%.

Year-to-date net cash provided by operations was $143 million, compared with $93 million in the year-ago period.

The company is maintaining its fiscal 2027 sales and adjusted EPS outlook ranges. Net sales are still expected to be up 13% to 14% compared with the prior year, including about 9.5 points from GOJO. Organic sales are expected to increase about 3.5% to 4.5%, including more than 3.5 points from lapping the ERP-related drawdown.

Based on the latest assumptions on input costs and acquisition synergies, Clorox updated its gross margin and selling and administrative expense outlook and said it expects adjusted EPS results closer to the low end of the range. Gross margin is now expected to be about 41.5%, reflecting higher-than-normal inflationary headwinds and negative mix more than offsetting cost savings and pricing actions, including about 20 basis points of negative impact primarily related to the GOJO inventory step-up. Selling and administrative expenses are now expected to be about 15.5% of net sales, including about 40 basis points of negative impact from GOJO transaction-related costs.

Diluted EPS is still expected to be between $5.41 and $5.71, a year-over-year increase of 12% to 19%, including about 29 cents of impact from GOJO transaction-related costs. Adjusted EPS is still expected to be between $5.70 and $6.00, or an increase between 3% and 8%.