Clorox Company 2026 Q4 Earnings Call

Thank you, Jen. Good afternoon, and thank you for joining us. On the call with me today are Linda Rendle, our Chair and CEO, and Luc Bellet, our CFO. Please note also that our earnings release and prepared remarks are available on our website at thecloroxcompany.com. Linda will share a few opening comments. Then we'll take your questions. During this call, we may make forward-looking statements, including about our fiscal year 2027 outlook. These statements are based on management's current expectations but may differ from actual results or outcomes. In addition, we may refer to certain non-GAAP financial measures. Please refer to the forward-looking statements section, which identifies various factors that could affect such forward-looking statements, which has been filed with the SEC.

In addition, please refer to the Non-GAAP Financial Information section of our earnings release and the supplemental financial schedule in the investor relations section of our website for a reconciliation on non-GAAP financial measures to the most comparable GAAP measures. I will turn it over to Linda.

Thank you for joining us today. Throughout fiscal year 2026, we operated in a dynamic environment marked by heightened value-seeking behavior, increased competitive activity, inflationary pressures, and ongoing macroeconomic uncertainty. We moved with urgency on incremental short- and medium-term actions to better serve consumers and compete more effectively in this environment. That work is focused on advancing superiority in key categories by sharpening our product experiences, strengthening our price pack architecture, improving our promotion effectiveness, increasing the impact of our brand-building investments, and ensuring we are present where consumers choose to shop. At the same time, we took strong actions to advance our long-term strategy while continuing the always-on transformation work that is strengthening our capabilities, improving productivity, and positioning the business for more consistent profitable growth.

While the majority of our businesses are performing at or above expectations, we have taken decisive actions to improve in the areas that are not yet delivering what we expect. We are encouraged by the sequential improvement and the progress we are making. As we look at fiscal year 2027, we're confident in our strategy and the stronger foundation we've built. Our focus remains on the priorities that will create long-term value, delivering superiority across our portfolio, accelerating consumer-led innovation, investing behind our brands, shaping a portfolio structurally positioned for faster growth, advancing operational excellence, and generating fuel to reinvest in the business. With that, Jen, we'll now open the line for questions.

Hi, Peter. I'll start. What we referenced as weaker category growth is very consistent with actually what we saw in fiscal year 2026. We expect the categories to continue to be muted given what's going on from a macroeconomic perspective and consumers continuing to engage in value-seeking behaviors, largely consistent with what we saw in 2026. Of course, we're watching that very carefully because this outlook assumes more of a continuity in category growth, and no significant displacement, depending on what happens with inflation and what happens in the Middle East, et cetera. I would say very much in line with the category growth that we saw in 2026. Then from a market share perspective, we expect to continue to make progress on market share. We had a number of categories that had turnarounds, particularly the exit rate's much stronger. Food, Glad. Home care continued to be strong.

We expect to continue to make progress throughout the course of the fiscal year on market share, and that gets us to the combination of what we expect from an organic growth perspective.

Right now, Q1 is a timing issue for the most part, as you noted, on Kingsford in particular. We can talk about the grilling season that's underway. Really a timing impact to Q1, then we would expect the remainder of the year, particularly the back half, more in line with the trends that we've seen over the course of 2026. If you look at what we've done every quarter, we've made sequential improvements. Consumption sequentially improved with a stronger exit rate, getting back to flat consumption in Q4. Share sequentially improved. Our exit rate in June was nearly flat. If you look at our category share results, distribution continued to improve, merchandising continued to be more effective. Q1 is a blip given some timing issues, but we would expect that pattern to continue, particularly again in the back half of 2027.