Clorox Beats Q2 Earnings & Sales Estimates, Updates FY25 Outlook

Core Insights - Clorox Company reported second-quarter fiscal 2025 results with both revenue and earnings surpassing Zacks Consensus Estimates, although both metrics declined year over year [1][2][6] Financial Performance - Adjusted earnings per share (EPS) was $1.55, exceeding the Zacks Consensus Estimate of$ 1.39, but down 28% from $2.16 in the prior year [6] - Net sales reached$ 1.69 billion, a 15% decrease from the previous year, yet above the Zacks Consensus Estimate of $1.64 billion; organic sales fell 9% [7] - Gross margin expanded by 30 basis points year over year to 43.8%, marking the ninth consecutive quarter of margin expansion, driven by cost savings and divestitures [8] Segment Performance - Health and Wellness segment sales declined 13% year over year to$ 628 million, with adjusted EBIT dropping 25% [11] - Household segment sales fell 11% year over year to $446 million, with adjusted EBIT down 48% [12] - Lifestyle segment sales decreased 16% year over year to$ 338 million, with adjusted EBIT declining 36% [13] - International segment sales dropped 12% year over year to $274 million, with adjusted EBIT down 34% [14] Strategic Initiatives - Clorox plans to invest$ 560- $580 million in transformative technologies over the next few years, with 70% of this amount recorded as incremental operating costs [15] - The company completed the sale of its Better Health Vitamins, Minerals, and Supplements business to Piping Rock Health Products, aligning with its focus on core areas [17] - Clorox and Procter & Gamble will wind down their Glad joint venture by January 31, 2026, allowing Clorox greater agility and innovation [18] Guidance and Outlook - Clorox updated its fiscal 2025 guidance, expecting net sales to decline 1% to 2%, with organic sales anticipated to increase 4-7% [19] - The gross margin is projected to expand by 125-150 basis points, driven by margin management efforts [20] - Advertising and sales promotion spending is expected to be 11-11.5% of net sales, reflecting Clorox's commitment to brand investment [21] - The company forecasts an adjusted EPS of$ 6.95-$7.35, indicating a year-over-year increase of 13-19% [22]