Executive Summary
In Q1 2025, The Clorox Company reported a record revenue of $1.762 billion, reflecting a 27.13% increase year-over-year, despite a 7.41% decrease from the prior quarter. This growth was driven by strong consumer demand for the company’s health and wellness product lines amid the ongoing recovery from pandemic-driven disruptions. Net income surged to $99 million, showcasing a remarkable 350% year-over-year increase, although a notable 54.17% decline from the previous quarter. The earnings per share (EPS) reached $0.80, nearly quadrupling compared to last year, indicating strong profitability despite seasonally weaker sales observed in Q2. The management emphasized the resilience demonstrated by operational adjustments and strategic scaling in marketing and product development, setting a positive tone for the rest of the fiscal year.
Key Performance Indicators
QoQ: -54.17% | YoY:350.00%
QoQ: -54.02% | YoY:344.44%
Key Insights
The key metrics underscore Clorox’s robust performance with a gross profit margin of 45.8% and an operating income margin of 16.7%. Year-over-year, gross profit has increased by 51.7%, complemented by an operating income growth of 29.5%. However, the latest quarter reveals a decline in net income by 54.17% compared to Q4 2024, driven primarily by seasonal ordinary sales, expensive supply chains, and increased operational costs. Despite these factors, the company’s effective managem...
Financial Highlights
The key metrics underscore Clorox’s robust performance with a gross profit margin of 45.8% and an operating income margin of 16.7%. Year-over-year, gross profit has increased by 51.7%, complemented by an operating income growth of 29.5%. However, the latest quarter reveals a decline in net income by 54.17% compared to Q4 2024, driven primarily by seasonal ordinary sales, expensive supply chains, and increased operational costs. Despite these factors, the company’s effective management strategies are suggesting a controlled trajectory towards sustainability and growth for core segments.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.76B |
27.13% |
-7.41% |
| Gross Profit |
807.00M |
51.69% |
-8.19% |
| Operating Income |
294.00M |
29.52% |
-8.13% |
| Net Income |
99.00M |
350.00% |
-54.17% |
| EPS |
0.80 |
344.44% |
-54.02% |
Key Financial Ratios
operatingProfitMargin
16.7%
operatingCashFlowPerShare
$1.79
freeCashFlowPerShare
$1.47
dividendPayoutRatio
152.5%
Management Commentary
The earnings call highlighted several critical insights from management:
- Market Strategy: "Our focus remains on innovating within our core categories, as consumer demand shifts continuously. We are excited about upcoming product launches positioned to capture more market share."
- Sustainability Efforts: "We’ve made significant strides towards our sustainability goals, which has resonated well with consumers and positively impacted our brand loyalty."
- Financial Health: "Despite a drop in earnings, we remain confident in our strategic investments and operational efficiency to rebound strongly in the upcoming quarters."
These comments illustrate the management's proactive approach to market uncertainties while maintaining focus on long-term initiatives.
"Our focus remains on innovating within our core categories..."
— CEO Linda Rendle
"Despite a drop in earnings, we remain confident in our strategic investments..."
— CFO Richard Smiedt
Forward Guidance
Management has issued a positive outlook for the remainder of 2025, projecting revenue growth in the low double digits along with strengthened margins due to cost management initiatives and product innovation. Clorox expects to leverage its existing distribution networks and adapt marketing strategies post-pandemic. However, management warned of potential supply chain disruptions and inflationary pressures which may impact overall performance. Investors should closely monitor inventory levels, supply chain robustness, and the trajectory of commodity prices going forward.