Company: CLX
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0000021076-25-000053
Chunk: 26

Company: CLOROX CO /DE/
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 1
Chunk 26
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$38 (89)%Segment adjusted EBIT(48)(64)25 

Net sales decreased by 89% in the current three month period due to the divestiture of the Better Health VMS business in the first quarter of fiscal year 2025. 

Segment adjusted EBIT increased by 25% in the current three month period. The increase in segment adjusted EBIT in the current three month period was primarily due to reductions in employee related expenses primarily due to lower employee incentive compensation and lower Better Health VMS operating expenses in the current period due to the divestiture. 

In the first quarter of fiscal year 2025, the Company completed the divestiture of its Better Health VMS business. See notes to condensed consolidated financial statements for further information.

FINANCIAL POSITION AND LIQUIDITY

The Company’s financial condition and liquidity remained strong as of September 30, 2025. The following table summarizes cash activities:Three months ended9/30/20259/30/2024Net cash provided by operations$93 $221 Net cash (used for) provided by investing activities(34)89 Net cash used for financing activities(59)(237)

Operating Activities

Net cash provided by operations was $93 in the current three month period, compared with $221 in the prior three month period. The decrease was primarily driven by lower cash earnings partially offset by lower working capital in the current three month period (lower Accounts receivable and higher Accounts payable and accrued liabilities partially offset by higher Inventories). The lower cash earnings, lower Accounts receivable balance and higher inventories balance were primarily due to the lower shipments in the current three month period following the incremental shipments related to the ERP transition in the fourth quarter of fiscal year 2025. The higher Accounts payable and accrued liabilities balance was due to the timing of payments.

Payment Terms Extension and Supply Chain Financing 

The Company has arranged for a global financial institution to offer a voluntary supply chain finance (SCF) program for the benefit of the Company’s suppliers. The Company’s current payment terms do not exceed 120 days in keeping with industry standards. The Company’s operating cash flows are directly impacted as a result of the extension of payment terms with suppliers. There would not be an expected material impact to the Company’s liquidity or capital resources if the financial institution or a supplier terminated the SCF arrangement. While the Company does not have direct access to information on, or influence over, which invoices a participating supplier elects to sell to the financial