Shares of The Clorox Company CLX climbed 3.1% in the after-market trading session on Oct. 30 following its first-quarter fiscal 2025 results. The improvement was driven by positive sentiment around the company’s recovery from the cyberattack-related headwinds in the prior year. The results also reflect the previous divestiture of the Argentina business.

The company’s sales and earnings per share (EPS) surpassed the Zacks Consensus Estimate and improved year over year. Backed by the strong results, CLX raised its EPS view for fiscal 2025, improving investor sentiment.

Adjusted EPS of $1.86 increased many-fold from 49 cents in the year-ago quarter and beat the Zacks Consensus Estimate of $1.36. The bottom-line results benefited from improved net sales and cost savings, offset by higher advertising investments.

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The Clorox Company Price, Consensus and EPS Surprise

The Clorox Company price-consensus-eps-surprise-chart | The Clorox Company Quote

Net sales of $1.76 billion improved 27% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $1.63 billion. This rise can be attributed to higher volume, reflecting the lapping of the cyberattack. Organic sales increased 31% year over year, fueled by double-digit growth across all segments. Top-line growth was further supported by improved shares in most categories and a complete recovery of overall market share.

The gross margin expanded 740 basis points (bps) year over year to 45.8% in the reported quarter, marking the company's eighth consecutive quarter of margin expansion. This growth was driven by substantial cost savings and a comprehensive margin management program, strengthening CLX’s capacity to support growth. Additionally, the company remains on track to fully restore the gross margin by fiscal 2025.

Shares of this Zacks Rank #2 (Buy) company have rallied 16.7% in the past three months compared with the industry’s rise of 0.5%.

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Discussion on CLX’s Segments

Sales of the Health and Wellness segment rose 38% year over year to $698 million, beating our estimate of $635 million. The rise was driven by a 38-point increase in volume and a two-point gain from a favorable mix, offset by a two-point impact of higher promotional trade spending. The segment-adjusted EBIT grew 126%, backed by improved sales and cost savings, partly negated by elevated advertising costs.

The Household segment’s sales improved 38% year over year to $447 million. Our model had predicted sales of $399.8 million for the segment. The segments’ sales were mainly driven by 43-point volume growth, offset by a five-point impact of an unfavorable mix and elevated trade promotion spending. Segment-adjusted EBIT rose substantially from the year-ago quarter due to higher sales and cost savings, offset by increased advertising costs.

Sales in the Lifestyle segment rose 40% year over year to $320 million. We expected net sales of $279.4 million for the segment. The benefits of 48 points of improved volume were partly offset by 8 points of headwinds from an unfavorable mix and higher trade promotion spending. Segment-adjusted EBIT rose 247% on improved sales, offset by higher advertising investments.

In the International segment, sales declined 4% year over year to $259 million. We anticipated net sales of $259.2 million for the segment. This drop in sales was led by the divestiture of the Argentina business and a two-point impact of adverse currency rates. Excluding these, organic sales rose 11%, supported by 11 points of volume growth. Segment-adjusted EBIT rose 3% due to volume growth, excluding the Argentina business, partly offset by increased advertising spending.