Clorox reported second-quarter fiscal 2026 adjusted EPS of $1.39, missing analyst consensus of $1.43, while net sales of $1.673 billion outperformed the street view of $1.64 billion. On a reported and organic basis, net sales declined 1% year-over-year as lower consumption in core categories weighed on top-line growth. Gross margin compressed by 60 basis points to 43.2%, driven by elevated manufacturing and logistics costs. Segment performance was uneven: Health and Wellness net sales rose 2% on volume gains tied to the final phase of the ERP transition and strength in Professional Products, International sales climbed 7% thanks to favorable price mix and currency effects, but Household and Lifestyle net sales fell 6% and 5%, respectively, with volume declines as the primary driver of weakness.

Management reaffirmed full-year adjusted EPS guidance of $5.95–$6.30 and narrowed sales guidance to $6.394–$6.678 billion, versus consensus of $5.90 EPS and $6.485 billion in sales. The company cautioned that a temporary inventory correction at retail partners—resulting from an ERP system transition that led to roughly two weeks of excess inventories at the end of fiscal 2025—will reduce fiscal 2026 sales growth by an estimated 7.5 percentage points and depress adjusted EPS by approximately $0.90. This inventory drawdown is expected to drive a 23% year-over-year decline in adjusted EPS despite stable underlying demand and ongoing strategic investments, including the recently announced acquisition of GOJO Industries.