Clorox’s first quarter results fell short of Wall Street’s expectations, with revenue and adjusted earnings per share both missing consensus forecasts. The market responded negatively, reflecting concerns around the company’s top-line performance. CEO Linda Rendle attributed the underperformance to a combination of weakening U.S. consumer sentiment, increased macroeconomic uncertainty, and shifting consumer spending patterns late in the quarter. She noted that while Clorox’s core categories are typically resilient, this period saw notable volatility and a temporary slowdown in household essentials, especially as consumers prioritized other purchases and adjusted their shopping behaviors.
Is now the time to buy CLX? Find out in our full research report (it’s free).
Clorox (CLX) Q1 CY2025 Highlights:
- Revenue: $1.67 billion vs analyst estimates of $1.72 billion (8% year-on-year decline, 3.3% miss)
- Adjusted EPS: $1.45 vs analyst expectations of $1.56 (6.9% miss)
- Management reiterated its full-year Adjusted EPS guidance of $7.15 at the midpoint
- Operating Margin: 14.4%, up from 12.5% in the same quarter last year
- Organic Revenue fell 2% year on year (2% in the same quarter last year)
- Market Capitalization: $14.73 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Clorox’s Q1 Earnings Call
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Dara Mohsenian (Morgan Stanley) asked how long category weakness in household products might persist and whether this cycle differs from past downturns. CEO Linda Rendle stated that while category resilience remains, the duration of the softness is uncertain due to ongoing macro volatility.
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Filippo Falorni (Citi) questioned the gross margin impact of tariffs and Clorox’s mitigation plans. CFO Luc Bellet detailed that most tariff exposure is linked to packaging and raw materials, with the company pursuing sourcing changes and targeted price increases to manage the cost burden.
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Anna Lizzul (Bank of America) inquired about promotional activity by category and the strategy for premium product launches amid weak consumer sentiment. CEO Linda Rendle noted that promotional intensity varies by segment, and innovation in premium offerings continues to see strong consumer uptake even as value-seeking behaviors increase.
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Bonnie Herzog (Goldman Sachs) sought clarity on the ERP transition’s impact on shipments and inventory build, and whether margin improvements are expected from the new system. Rendle and Bellet explained that temporary inventory builds should unwind next quarter and expressed confidence that ERP investments will contribute to long-term efficiency gains.
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Steve Powers (Deutsche Bank) asked about the lack of traditional “trade down” behavior and the risk of future shifts in consumer purchasing. Rendle replied that consumers remain focused on value-for-money and performance, with little evidence so far of trading down to private label, though this is being monitored.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be watching (1) the pace at which retailer inventory adjustments normalize across key segments, (2) Clorox’s ability to manage tariff-related cost pressures without eroding margins, and (3) the impact of new product launches and ERP system implementation on both topline and efficiency. Progress in balancing promotional discipline with market share retention will also be a critical signpost for the company’s execution.
Clorox currently trades at $118.15, down from $138.39 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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