Company: CLX
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0000021076-25-000053
Chunk: 85

Company: CLOROX CO /DE/
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 2
Chunk 85
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 inflationary headwinds have moderated, consumers continue to feel pressure as continued macroeconomic uncertainty impacts spending and prices remain elevated. United States trade policies continue to evolve, including new or increased tariffs on product imports from certain countries. These, and any future new or additional tariffs, as well as any associated retaliatory measures taken by other countries, may impact the macroeconomic environment, consumers, suppliers and the Company’s business. Though the Company has and will continue to take action to mitigate such impacts, the Company anticipates that the operating environment will remain volatile and challenging.

The impact of continued volatility in macroeconomic conditions and geopolitical instability, including ongoing conflicts in the Middle East and Ukraine, the potential for escalation in hostilities between the U.S. and Iran, and rising tensions between China and Taiwan, actual and potential shifts in U.S. and foreign trade, economic and other policies, have increased global macroeconomic and political uncertainty regarding the duration and resolution of the conflicts, the potential escalation of tensions and potential economic and global trade and supply chain disruptions. These factors are difficult to predict considering the rapidly evolving landscape as the Company continues to expect a variable operating environment going forward. 

The Company has not experienced significant disruptions in its operations during the first quarter of fiscal year 2026. However, the risks of future negative impacts due to transportation, logistical or supply constraints and higher commodity costs for certain raw materials remain present, and the Company continues to experience corresponding incremental costs and gross margin pressures. 

The Company's transformation efforts continued into fiscal year 2026. The Company has begun transitioning core U.S. operations to the new enterprise resource planning system (ERP) as part of the continuing phased implementation of its technology transformation. As expected, the Company is in the stabilization phase and has experienced some sales timing impacts in the current and previous quarter. The Company remains on track to complete implementation this fiscal year. The total incremental transformational investment is expected to be approximately $580 million. The digital foundation provided by the Company’s new ERP supports its long-term financial goals through modernized capabilities that accelerate growth and deliver stronger efficiencies.  

For the remainder of fiscal year 2026, the Company anticipates that the operating environment will remain volatile and challenging as consumers may face greater pressure as continued macroeconomic uncertainty impacts spending. The Company will continue to invest in its brands, capabilities and people to deliver consistent, profitable growth over time. 

For further discussion, refer to Item 1.A, “Risk Factors” of this report and “Risk Factors” included in the Company’s Annual Report