The Clorox Company Q2 FY2026 earnings call

Before the quarter, The Clorox Company entered the year expecting the first half to be challenging due to volatile macroeconomic conditions and ERP implementation impacts. Despite external pressures, results were largely in line with expectations. The company is strengthening its foundation by advancing digital transformation, enhancing execution, leveraging a modernized ERP foundation, and accelerating innovation to deliver value to consumers. Additionally, the planned acquisition of Gojo Industries is a step to expand leadership in health and hygiene and unlock long-term growth opportunities.

The second quarter showed sequential improvement. The category is expected to grow 0% to 1% in the back half. The ERP implementation, with the final phase completed in January, is behind them. The back half is weighted towards launching innovation across major brands, with expectations of stronger share performance due to these innovation plans and demand spending. The acquisition of Gojo Industries is seen as a step to drive long-term growth.

Volatile macroeconomic environment poses challenges. There is competitive promotional activity in categories like litter and Glad. The temporary impacts of the ERP implementation added complexity to operations.

Q: Andrea Teixeira asked about Q2 performance, competitive environment, and promotional environment.

A: Linda Rendle discussed sequential improvement in Q2, category growth expectations of 0% to 1% in the back half, and competitive activity being largely as expected.

Q: Peter Grom asked about shipment favorability, share gains, and innovation timing.

A: Luc Bellet talked about shipment favorability reversing in Q3 and Linda Rendle discussed innovation ramp-up, including specific innovations like the allergen-destroying cleaning product and Glad's Leakguard trash bags.

Q: Filippo Falorni asked about pricing, promotional environment, and gross margin.

A: Luc Bellet discussed gross margin phasing, with Q3 expected to be flat and Q4 seeing solid expansion, and Linda Rendle talked about competitive promotions in household categories.

Q: Javier Escalante asked about ERP digital capabilities and household organic sales.

A: Luc Bellet talked about ERP adjustment timing and Linda Rendle discussed household sales drivers, including promotion impact from Scoop Away at Costco.

Q: Bonnie Herzog asked about household margins and promotion strategy.

A: Linda Rendle discussed innovation and the balance between growing share and maintaining profitability in trash and litter categories.

Q: Anna Lizzul asked about category growth and long-term strategy.

A: Linda Rendle talked about category growth expectations and alignment with The Clorox Company's Ignite Strategy for 3% to 5% net sales growth.

Q: Kevin Grundy asked about price investment and innovation.

A: Linda Rendle discussed RGM capabilities and disciplined price investments to address consumer value needs.

Q: Olivia Tong asked about promotional environment and inventory.

A: Linda Rendle talked about RGM capabilities to address large sizes and inventory levels, stating no material destocking risk.

Q: Kaumil Gajrawala asked about ERP benefits and margin goals.

A: Luc Bellet discussed ERP benefits and margin expansion goals, including supply chain optimizations and automation.

Q: Lauren Lieberman asked about advertising spend and innovation timing.

A: Luc Bellet talked about advertising investment being planned at the SBU level and Linda Rendle discussed innovation pricing and value equation.

Q: Edward Lewis asked about innovation pricing.

A: Linda Rendle discussed consumer willingness to pay for premium innovations and the value equation across income groups.

Q: Robert Moskow asked about Purell integration.

A: Linda Rendle discussed integration confidence and focus on core businesses while integrating Purell.

Q: Chris Carey asked about ERP impact and flexibility.

A: Luc Bellet talked about ERP financial impact and Linda Rendle discussed flexibility in investments to support brand growth if needed