CLOROX CO /DE/ Q1 FY2025 earnings call

• First quarter results were strong, with full restoration of market share and eighth consecutive quarter of gross margin expansion. - Completed development of VMS business and sold Argentina business, supporting portfolio evolution. - Consumer under pressure but trusted brands in essential categories remained resilient. - Focused on delivering superior value, investing in brands and innovation. - Glad made strong progress with restored distribution and strong merchandising, including Amazon Prime Day success. - Litter saw progress with restored over 90% of subscription business, returned to number one share position, and share growth.

Health and Wellness segments performed strongly with share growth in Home Care, Laundry, and Bleach. PPD showed very strong performance. International and Clorox Professional businesses continued to grow in the mid-single digits. Health and Wellness had strong share growth in Home Care and Laundry, with significant share pickup in Bleach. PPD performed better than expected, and International/Clorox Professional had mid-single digit growth.

• Full-year organic growth expected around 4%, with back half of the year expecting 3%-5% growth. - Categories expected to slow to flat to 1% growth. - International and Clorox Professional businesses expected to grow mid-single digits. - Benefit of divestitures to start being felt from Q2 onwards. - Gross margin expected to be around 44%-44.5% for the full year, with Q2 expected to be down due to deleveraging.

• Uncertain macro environment with consumers seeking value. - Promotional levels in Litter temporarily higher than pre-COVID but expected to normalize. - Complexity of ERP implementation in the U.S. following successful Canada implementation. - Potential impact of tariffs and supply chain disruptions, though steps taken to reduce risk.

Q: Dara Mohsenian asked about market share restoration, promotional environment, and back half growth.

A: Linda Rendle and Kevin Jacobsen responded on market share progress, promotional levels returning to pre-COVID, and back half growth expectations.

Q: Peter Grom followed up on gross margin, share growth, and divestitures.

A: Kevin Jacobsen discussed gross margin drivers, share growth, and divestiture benefits.

Q: Filippo Falorni asked about Glad and Litter progress.

A: Linda Rendle talked about Glad's restored distribution and Litter's subscription and share growth progress.

Q: Andrea Teixeira asked about category consumption, margin cadence, and commodities.

A: Linda Rendle and Kevin Jacobsen responded on category consumption aligning with expectations, margin cadence, and commodities outlook.

Q: Anna Lizzul asked about pricing, advertising, and channel shifts.

A: Linda Rendle discussed pricing through net revenue management, advertising/sales promotion dynamics, and channel shifts.

Q: Bonnie Herzog asked about Litter promo strategy and channel shifts.

A: Linda Rendle addressed Litter promo strategy and channel shift expectations.

Q: Robert Moskow asked about gross margin seasonality and EPS.

A: Kevin Jacobsen discussed gross margin seasonality and EPS expectations.

Q: Olivia Tong asked about inventory and gross margin components.

A: Linda Rendle and Kevin Jacobsen talked about inventory normalization and gross margin components including cost savings and divestitures.

Q: Kaumil Gajrawala asked about ERP implementation in Canada and U.S.

A: Linda Rendle discussed ERP implementation learnings from Canada and U.S. timeline.

Q: Chris Carey asked about pricing mix and organic growth.

A: Kevin Jacobsen explained pricing mix noise from cyber lap and organic growth drivers.

Q: Javier Escalante asked about category growth and business performance.

A: Linda Rendle discussed category growth expectations and business performance drivers.

Q: Steve Powers asked about household penetration and back half growth.

A: Linda Rendle and Kevin Jacobsen responded on household penetration and back half growth expectations.

Q: Kevin Grundy asked about sourcing and tariffs.

A: Kevin Jacobsen discussed sourcing risk management and tariff impact.