The Clorox Co (CLX.N): F1Q'27 OSG In-Line & EPS Beat, But FY27 Cost Headwinds Increasing

CLX posted F1Q'27 OSG +18%, above +16-17% guidance and in-line with Street. F1Q adj GM% ex-GOJO was 40.9% (vs. guidance ~40.5% and consensus 40.0%), with adj. EPS of $1.55 above our $1.11 estimate and consensus $1.07. CLX maintained its FY27 category growth assumption of flat to +1% and reiterated its OSG +3.5-4.5% target, but now expects greater input cost inflation of ~$240M (prior ~$200M). CLX is stepping up mitigation efforts including cost savings and additional price increases; however, management does not anticipate these actions will fully offset the headwinds in FY27. Consequently, CLX lowered FY27 guidance for adj. GM to 41.7% ex-GOJO (prior ~42.2%) and pointed to the lower end of the $5.70-$6.00 EPS range, net of lower SG&A. We remain Neutral-rated given the challenging cost outlook and awaiting an updated strategy from the new CEO, with our FY27 EPS estimate moving to $5.79 and our TP to $95.