The Clorox Company Struggles Amidst Financial Setbacks and Market Challenges

Oakland, California-based The Clorox Company (CLX) manufactures and markets consumer and professional products worldwide. With a market cap of $16.8 billion, the company operates through segments including Health and Wellness, Household, Lifestyle, and International.

Recent Performance Highlights

CLX has notably underperformed the broader market over the past year and into 2025. Over the past 52 weeks, CLX’s stock prices have declined by 3.7%. Year-to-date, the stock has fallen 17.9%, in stark contrast to the S&P 500 Index’s ($SPX) 12.3% gain over the same timeframe.

Narrowing the analysis, CLX has also lagged behind the Consumer Staples Select Sector SPDR Fund’s (XLP) increase of 2.9% over the past year and its YTD rise of 1.1%.

Q3 Earnings Report Underwhelms

Following the release of its disappointing Q3 earnings on May 5, CLX’s stock took a 2.4% hit. The company reported net sales of approximately $1.7 billion, an 8.1% decrease year-over-year that fell short of analyst expectations. This decline primarily stemmed from weakened sales across three of its four segments amid increased macroeconomic uncertainties. Gross profit also saw a decrease of 2.9% from the same quarter last year, totaling $744 million. However, the gross margin improved by 240 basis points to 44.6% compared to the previous year.

Despite these challenges, CLX’s adjusted earnings per share (EPS) dropped 15.2% year-over-year to $1.45, missing consensus estimates by 7.6%.

Future Projections and Analyst Insight

For the current fiscal year ending in June, analysts project a 15.1% year-over-year rise in adjusted EPS to $7.10. Historically, CLX has had a mixed earnings surprise record; it exceeded analyst expectations three times out of the last four quarters but missed on one occasion.

Currently, CLX holds a consensus “Hold” rating among analysts. Out of 17 analysts covering the stock, there is one “Strong Buy,” 12 “Holds,” and four “Strong Sells.” This configuration has remained relatively stable in recent months.

On May 7, Barclays (BCS) analyst Lauren Lieberman maintained an “Underweight” rating on Clorox stock, adjusting the price target from $134 to $129. As of this writing, the mean price target for CLX stands at $145, which suggests a modest 8.7% premium to current levels. The highest target on the Street is $167, indicating a substantial 25.2% upside potential.

On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.