The Clorox Company delivered QQ2 2026 results characterized by modest revenue resilience amid ongoing ERP-related transition costs and a widening mix headwind from value-conscious consumers. Revenue of $1.673 billion declined 5.1% year over year but posted a 17% sequential uptick as the quarter benefited from improved execution and the tailwinds of ERP stabilization. Gross margin stood at 43.2% (GAAP), with operating income of $431 million and net income of $157 million (EPS $1.29). Free cash flow was robust at $269 million, supporting a net cash position and disciplined capital allocation, including $129 million of share repurchases and $151 million in dividends, partially financed by operating cash flow of $311 million.
Management framed QQ2 as a transition quarter within a broader transformation that includes a modernized ERP backbone and the Gojo Industries (Purell) acquisition. The company reaffirmed full-year guidance, signaling confidence in a back-half recovery driven by a heavy slate of innovations across major brands, including allergen-targeted cleaning platforms, enhanced litter products, and packaging/type-price architectures designed to improve trial and share. Importantly, management anticipates the ERP-related shipment prebuild effects to reverse in Q3, with a meaningful ramp in innovations materializing in the back half and into fiscal 2027. The backdrop remains challenging given macro volatility and promotional intensity, but Clorox’s balance sheet and cash-flow generation provide a sturdy platform to fund growth investments while pursuing margin expansion through cost efficiencies and portfolio optimization.
Key takeaway: QQ2 2026 confirms a transition phase with near-term headwinds, yet the strategic initiatives—Gojo integration, allergen platform, Litter relaunch, and broader RPM/pack architecture—are positioned to support mid-teens EPS accretion and a return to growth on a multi-year horizon as category dynamics normalize and share gains materialize.