CLX changes
Pick any two versions below to diff them.
- Price
- $89.77 → $83.80(−6.7%)
- Thesis
- Clorox just finished a removed: five-year, roughly $580 million added: five-year project to replace its removed: 20-year-old added: old SAP added: computer system. The final removed: cutover added: switchover caused a added: swing in retailer removed: inventory whipsaw, so fiscal added: orders. Fiscal 2026 removed: organic sales fell removed: about 8%, and removed: gross margin fell to 42.3%. Private-label pressure is real, but concentrated: Health and Wellness, which includes bleach, wipes, and now Purell, still earns added: margins dropped as a removed: 25.1% margin and makes 57% of segment profit added: result. Investors worry this shows lasting damage from added: private-label competition, not just removed: 40% of sales, while Household, hit hardest by private label, earns only a removed: 10.7% margin. Clorox funded its $2.25 billion purchase of added: one-time glitch. Debt from the GOJO removed: mostly with debt, pushing added: and Glad buyouts also pushed leverage removed: to about 4.4 added: above four times removed: EBITDA and triggering a added: earnings. That adds balance-sheet risk on top of the sales drop. A credit removed: rating cut added: downgrade and an open CEO search add further uncertainty. For the gap to removed: BBB in February 2026, though added: close, fiscal 2027 sales growth needs to reach the 3.5% to 4.5% range management removed: targets a return added: has guided. Leverage also needs to added: fall back toward management's target of about 2.5 times added: EBITDA, a common measure of operating profit, by the end of calendar 2027. removed: Clorox's own options market prices implied volatility well above what a calm staples stock normally trades at, showing investors already expect real uncertainty around the leverage, the open added: A permanent CEO removed: search, added: also needs to be named and removed: whether added: show the removed: business has actually stabilized. added: turnaround is working. The next test comes at first-quarter fiscal 2027 earnings, expected around early November 2026. If removed: the FY2027 rebound plays out added: sales stabilize and removed: a new added: leverage falls as planned, the gap could close over the next four to six quarters. If the CEO removed: resolves added: search drags on or sales disappoint again, the removed: leadership question, some of that priced-in fear added: discount could removed: prove overdone. added: persist well into 2027.
- Recent events
- added: Sep 9, 2026: At the Boston Global Staples Conference, Clorox management said it expects fiscal 2027 organic sales growth of 3.5% to 4.5%, matching earlier guidance, and described the year as one of transition and repair after finishing the SAP system upgrade. Aug 3, 2026: Clorox reported full fiscal-year 2026 results. Net sales fell 5% to $6.72 billion, organic sales fell 8%, and adjusted earnings per share fell 28% to $5.53. The company guided to 3-4.5% organic sales growth for fiscal 2027. May 28, 2026: CEO Linda Rendle asked the board to start a search for her successor, saying she will step down for health reasons after treatment for early-stage breast cancer. She will remain CEO until a successor is named. Apr 1, 2026: Clorox completed its $2.25 billion acquisition of GOJO Industries, maker of Purell, funded mostly with new debt. Mar 25, 2026: A California judge trimmed Clorox's lawsuit against Cognizant, dismissing an intentional misrepresentation claim but letting the breach of contract and gross negligence claims proceed. No trial date has been set. Mar 2, 2026: Clorox paid $476 million in cash to buy Procter & Gamble's 20% stake in the Glad trash bag joint venture, taking full ownership of the Glad brand. Feb 18, 2026: S&P Global Ratings downgraded Clorox to BBB from BBB+, citing the leverage added by the debt-funded GOJO acquisition. Jul 22, 2025: Clorox sued its IT services contractor, Cognizant, for $380 million in California state court, alleging Cognizant's help desk handed network passwords to a caller posing as an employee during the August 2023 cyberattack.