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Clorox Navigates Turbulent Transition, Maintains Resilience
17 Nov
Summary
- Clorox's Q1 2026 revenue drops 19% due to ERP transition
- Gross margin slips 410 basis points, but CEO highlights digital progress
- Organic sales to decline in H1, then rise in H2 as ERP benefits emerge
In the fiscal Q1 2026, The Clorox Company (NYSE:CLX) reported a 19% drop in revenue to $1.43 billion compared to the same period a year earlier. The company attributed this decline to reduced shipments tied to its ERP (Enterprise Resource Planning) system transition. Organic sales also fell 17%, largely due to lower volume linked to the ERP shift.
Gross margin slipped by 410 basis points to 41.7%, down from 45.8% a year ago, as lower volume and higher manufacturing and logistics expenses weighed on profitability. However, CEO Linda Rendle highlighted the successful rollout of Clorox's new ERP system in the US, calling it a major achievement that strengthened the company's digital foundation and opened doors to new value opportunities.
Despite the challenges around the ERP transition, Rendle noted that Clorox is already seeing benefits take hold across its operations. Management expects organic sales to decline at a low single-digit pace in the first half of fiscal 2026 and then rise at a low single-digit rate in the second half, excluding the effects of the ERP transition.
