Clorox's Brand Investments Are Up: Will They Translate to Growth?

The Clorox Company’s CLX brand investments are increasing due to heightened demand creation strategies, including higher trade spending and advertising to support innovations planned for the second half of fiscal 2026, despite ERP-related disruptions. The company remains confident in its marketing and expenditure strategies for the latter half, utilizing advanced tools and a strong personalization engine to target customers effectively and generate good returns. As consumer behavior shifted, it adjusted its retail media and advertising expenditures accordingly.

The company promotes innovation across its major brands. Glad is expanding its successful scent platform with a new fall fragrance, while Brita is modernizing pitchers with new colors and smaller, more affordable sizes. Burt’s Bees is extending its boosted balm line into body care with new lotions and whipped butters. Management anticipates additional impactful launches in the second half, supporting sustained consumer value and long-term growth.

However, in the first quarter of fiscal 2026, Clorox’s net sales fell 19% year over year to $1.43 billion, with organic sales decreasing 17% year over year. This decline was mainly due to lower shipments and volumes related to the ERP transition. For fiscal 2026, the company continues to project net sales to decline in the range of 6–10%, due to the impact from the VMS divestiture and foreign exchange. Organic sales are expected to fall 5–9%, indicating a 7.5-point headwind from lapping last year’s incremental ERP-related shipments, reflecting continued short-term pressures.

Despite these pressures, the company remains committed to supporting its brands, maintaining advertising and promotional spending at roughly 11% of net sales. Continued investment and a robust innovation pipeline position Clorox to regain momentum, and strong execution could help stabilize demand as operational challenges subside.

The Zacks Rundown for CLX

In the past six-month period, CLX’s shares have plunged 16.4% compared with the industry’s decline of 11.9%. CLX carries a Zacks Rank #3 (Hold).

From a valuation standpoint, CLX trades at a forward price-to-earnings ratio of 16.35, lower than the industry average of 17.63.

The Zacks Consensus Estimate for CLX’s fiscal 2026 earnings implies a year-over-year decline of 24%, while fiscal 2027 earnings suggest a year-over-year rise of 15.8%. 
 

Stocks to Consider

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The Zacks Consensus Estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1% and 187.3%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 52.1%, on average.

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The Zacks Consensus Estimate for Vita Coco's current fiscal-year sales and earnings implies growth of 18% and 15%, respectively, from the year-ago figures. Vita Coco delivered a trailing four-quarter earnings surprise of 30.4%, on average.

Lamb Weston Holdings, Inc. LW engages in the production, distribution and marketing of frozen potato products in the United States, Canada, Mexico and internationally. LW currently carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for Lamb Weston's current fiscal-year sales indicates growth of 1.3% and earnings indicate a decline of 6.3% from the prior-year levels. Lamb Weston delivered a trailing four-quarter earnings surprise of 16%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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