Clorox Company Boston Global Staples Conference 2026

Sounds good, and thank you for your opening. In line with that, perhaps I will give an update on the CEO succession process. The board is well underway in identifying my successor. They laid out a process where they are doing a comprehensive search, and they are well into that at this point. Until then, the team and I continue to be focused on our strategy and priorities, and we will keep you updated as we have more information. But nothing new to share today. With that, I thought I would just provide some brief opening comments on the business and then get into Lauren's questions. First, I wanted to talk a little bit about last year, our fiscal year that ended in June.

It certainly was a year of volatility for the industry, given what was going on from a consumer perspective. For our company, it was a year of transition. We implemented the final version of our digital transformation with our ERP in the U.S., which was a significant undertaking. We did a greenfield implementation, but that is now behind us, and we are moving into optimization mode. In addition, we made a significant move on our portfolio with the acquisition of Gojo Industries, which you know better as PURELL, which is a key player in B2B and retail in the hand sanitization space and expands our presence in health and hygiene, and we are excited about that acquisition. I know we will talk more about it today.

We feel we enter fiscal year 2027 in a much stronger place than we did in 2026, and that was a result of making sequential improvement in 2026 quarter after quarter after quarter. But we still see the environment as being tough. Consumers are under stress. Our categories remain muted. But we have a strong slate of innovation. We are investing in superiority in our brands. We can talk more about that. Certainly, as we face inflationary headwinds, we are taking all the necessary actions to ensure that we recover margins over time, and importantly, have the fuel to invest in our brands, and we are making strong investments this year. With that, maybe we just get right into questions.

Okay. Does that sound good?

Yeah, we don't see a really distinct difference in our categories. They all follow a very similar pattern, but they certainly have different things impacting them. Let me walk you through a few of them. First, in aggregate, all of our categories are being impacted by value-conscious consumer. Consumers are trading up to larger sizes and smaller sizes, and they're shopping in different outlets at an enhanced pace to do that. You're seeing more in club and mass, and certainly, they're going to continue to do that, we see, as gas prices are elevated, and they're dealing with the impacts of inflation. That's across all of our categories. Even categories that have stronger growth rates, Litter, for example, is a mid-single-digit grower. We've seen a little bit more muted, but that's still growing faster than our average.

Our pro categories continue to grow faster than average. International continues to grow faster than average, even though they're under inflationary pressures in those markets as well. I would call out every one of our categories is positively impacted by innovation, and consumers are willing to pay for a better experience. Whether that be in a trash bag, where we've launched a trash bag that has an absorbent layer on the bottom that is a premium, that's doing well at launch, to a Burt's Bees new Squeezy Tinted Balm that is a premium, and that is doing well. In our cleaning businesses, we continue to see trade up to our Scentiva platform. Consumers are entering into the new allergy space we launched with Clorox PURE, which is a premium.

We're seeing generally consumers very willing to accept continued innovation and premiumization in the category as long as that delivers a superior value. That's what we're laser-focused on, is making sure that we have the right size, PPA in our base business, that we're doing the right claims work, that we're investing strongly in advertising and sales promotion. But then really to get these categories growing again, we need to continue to lean into innovation, and we have strong innovation plans this year.

Sure, I can take that.

Sure. Well, maybe let me get us reconnected to our outlook for the full year.

Organic sales growth is expected to grow 3.5%-4.5%, but as you mentioned, that includes a little over 3.5 points of benefit from lapping the ERP transition last year. Excluding this, organic would be flat to up slightly for the full year.