Clorox Aug 4

Rating Company Date 4 August 2026 Hold Clorox North America Reuters Bloomberg Rating Hold CLX.N CLX US Price target (USD) 98.00 United States Price at 3 Aug 26 98.26 52-week range 127.16 – 57.80 Consumer Consumer Staples Valuation & Risks

Another Bridge Year? Steve Powers Key takeaways from CLX's FY4Q26 results Research Analyst CLX's FY4Q26 results were mixed, with adjusted EPS of $1.66 benefiting from contributions from the recently acquired GOJO business while underlying Christopher Barnes, CFA category and portfolio trends remained challenged. Organic sales declined -13%, Research Analyst broadly as expected and modestly ahead of Street expectations (-14.5%), though results continue to reflect the lingering impact of ERP-related shipment timing. Nikhil Jain, CFA Looking ahead, management assumes category growth remains subdued at Research Associate roughly flat to +1%, with consumers continuing to exhibit value-seeking behavior. Against that backdrop, CLX plans targeted investments in product superiority, innovation and packaging upgrades, supported by selective pricing increases Angeline Goh Research Associate (most notably in Glad) partially offset by promotional investments aimed at managing value gaps versus competition.

Looking ahead, management's FY27 guidance reflects a balance of numerous offsetting forces. Adjusted EPS is guided to $5.70-$6.00 (vs. pre-results Key changes DBe/Street of $5.84/$5.95), with the benefit of lapping ERP-related disruptions Price target (USD) 94 98 4% and a full year of GOJO contributions largely offset by more than $200 million of Source: Deutsche Bank inflationary pressure, higher incentive compensation, continued investments behind superiority, and a challenging demand backdrop. Notably, while FY27 organic sales are guided to +3.5%-4.5%, this includes more than 3.5 points of benefit from lapping the ERP inventory drawdown, implying only modest (if any) underlying growth. Management expects FY1Q27 to be particularly noisy, with reported organic growth of +16%-17% benefiting from ERP comparisons but underlying organic sales declining due to weakness in Kingsford and Prime Day timing shifts. Gross margin pressure is also expected to be most acute in 1Q as resin and other supply-chain inflation flows through ahead of offsetting productivity and pricing actions.

Ultimately, we continue to view CLX as a company in transition. While management highlighted improving trends in key businesses such as Glad and Hidden Valley Ranch, the FY27 outlook still assumes a gradual improvement in sales, share trends and margins as the year progresses, with a disproportionate share of earnings recovery weighted to the second half. With the company also navigating an ongoing CEO succession process, we view the outlook as credible but still dependent on improved category trends and consistent execution. Reflecting these dynamics, we lower our FY27/28 adjusted EPS estimates to $5.82 (from $5.84) and $6.17 (from $6.23), respectively. However, our price target increases to $98 from $94 as a roll-forward in our valuation framework more than offsets the lower estimates. We maintain our Hold rating.

Deutsche Bank Securities Inc. IMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

Estimate changes and Valuation As noted above, we have revised our FY27 adjusted EPS estimate to $5.82 (from $5.84 prior), modestly below the midpoint of management’s $5.70-$6.00 adjusted EPS range. We now forecast FY27 net sales growth of +14.1%, broadly consistent with guidance for +13%-14% growth, driven by +4.5% organic growth and a +9.5% contribution from the GOJO acquisition (as well as slight FX benefits). Our FY27 adjusted gross margin moves to 42.2% (down from 43.7%), broadly in line with guidance, as elevated cost and negative mix more than offset productivity and pricing benefits. We also…