Clorox 10-K 2021-06-30

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

THE CLOROX COMPANY

(Exact name of registrant as specified in its charter)

1221 Broadway, Oakland, California 94612-1888

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

The aggregate market value of the registrant’s common stock held by non-affiliates as of December 31, 2020 (the last business day of the registrant’s most recently completed second fiscal quarter) was approximately $25.3 billion.

As of July 28, 2021, there were 122,813,075 shares of the registrant’s common stock outstanding.

Documents Incorporated by Reference:

Portions of the registrant’s definitive proxy statement for the 2021 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within 120 days after June 30, 2021, are incorporated by reference into Part III, Items 10 through 14 of this Annual Report on Form 10-K.

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THE CLOROX COMPANY

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED JUNE 30, 2021

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PART I

This Annual Report on Form 10-K for the fiscal year ended June 30, 2021 (this Report), including the exhibits hereto and the information incorporated by reference herein, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), including, among others, statements related to the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of governments, consumers, customers, suppliers, employees and the Company, on our business, operations, employees, financial condition and results of operations, and any such forward-looking statements, whether concerning the COVID-19 pandemic or otherwise, involve risks, assumptions and uncertainties. Except for historical information, statements about future volumes, sales, organic sales growth, foreign currencies, costs, cost savings, margin, earnings, earnings per share, diluted earnings per share, foreign currency exchange rates, tax rates, cash flows, plans, objectives, expectations, growth or profitability are forward-looking statements based on management’s estimates, beliefs, assumptions and projections. Words such as “could,” “will,” “may,” “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts” and variations on such words, and similar expressions that reflect our current views with respect to future events and operational and financial performance, are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed below. Important factors that could affect performance and cause results to differ materially from management’s expectations, or could affect the Company’s ability to achieve its strategic goals, are described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report, as updated from time to time in the Company’s U.S. Securities and Exchange Commission (SEC) filings.

The Company’s forward-looking statements in this Report are based on management’s current views, beliefs, assumptions and expectations regarding future events and speak only as of the date of this Report. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.

In this Report, unless the context requires otherwise, the terms “the Company,” “Clorox,” “we,” “us” and “our” refer to The Clorox Company and its subsidiaries.

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ITEM 1. BUSINESS

Overview of Business

The Clorox Company is a leading multinational manufacturer and marketer of consumer and professional products with fiscal year 2021 net sales of $7.3 billion and about 9,000 employees worldwide as of June 30, 2021. Its products are sold primarily through mass retailers; grocery outlets; warehouse clubs; dollar stores; home hardware centers; drug, pet and military stores; third-party and owned e-commerce channels; and distributors. Clorox markets some of the most trusted and recognized consumer brand names, including its namesake bleach and cleaning products; Pine-Sol® cleaners; Liquid-Plumr® clog removers; Poett® home care products; Fresh Step® cat litter; Glad® bags and wraps; Kingsford® grilling products; Hidden Valley® dressings, dips, seasonings and sauces; Brita® water-filtration systems and filters; Burt’s Bees® natural personal care products; and RenewLife®, Rainbow Light®, Natural Vitality® and NeoCell® vitamins, minerals and supplements. The Company also markets industry-leading products and technologies for professional customers, including those sold under the CloroxPro™ and Clorox Healthcare® brand names. More than 80% of the Company’s sales are generated from brands that hold the No. 1 or No. 2 market share positions in their categories. The Company was founded in Oakland, California, in 1913 and is incorporated in Delaware.

In fiscal year 2021, the COVID-19 pandemic continued to cause economic and societal disruptions as well as ongoing uncertainties. Guided by its IGNITE strategy, the Company is well positioned for the future, making significant investments to drive brand loyalty among new and existing consumers.

Clorox is a health and wellness company at heart, putting people at the center of everything it does. Whether it’s consumers, employees or communities, the Company is committed to helping people be well and thrive every single day. Clorox fulfills that purpose through its global portfolio by offering products that support people to be safe and well, enable communities to thrive, and bring joy to everyday life at home. It also prioritizes building a values-based, inclusive workplace culture that celebrates diversity and enables everyone to be their best selves to drive the business. The emphasis on giving back to the communities where the Company operates is reflected in foundation programs on community wellness, including racial justice, youth development and education, and sustainability; disease prevention; and disaster relief and preparedness. In support of those efforts, Clorox contributed about $20 million in combined foundation and corporate cash grants, product donations, and cause marketing in fiscal year 2021.

Clorox’s IGNITE strategy accelerates innovation in key areas to drive growth and deliver value for both the Company's shareholders and society. Specifically, IGNITE focuses on four strategic choices to sustain long-term, profitable growth: Fuel Growth, Innovate Experiences, Reimagine Work and Evolve Portfolio. Integrated goals for environmental, social and governance performance are focused in the areas of Healthy Lives, Clean World and Thriving Communities.

In fiscal year 2021, the Company delivered net sales growth of 9%, and a 24% decrease in diluted net earnings per share (EPS) in a macroeconomic environment that continued to be dominated by significantly higher demand for essential household products, especially cleaning and disinfecting products, as a result of COVID-19. Other conditions factoring into the dynamic environment included high levels of competition in select categories, supply challenges, uncertainty related to the global pandemic, persistently high manufacturing and logistics costs, and rising commodity costs.

The Company continued to focus on driving profitable sales growth in its U.S. business, leveraging strong demand-building investments, including product innovation to support category growth and market share. The Company launched new products in many categories in fiscal year 2021, including Clorox disinfecting wet mopping cloths; Clorox disinfecting all-purpose spray cleaner; Clorox Turbo handheld power sprayers; Clorox TurboPro disinfectant cleaners; Glad with Clorox trash bags; Kingsford wood pellets; Brita Longlast+ water filters; Brita water bottles in new colors; Fresh Step with Gain original scent cat litter with the power of Febreze; Fresh Step Clean Paws Simply Unscented cat litter; Hidden Valley Secret Sauce golden flavor; Hidden Valley Original Ranch Plant Powered topping and dressing; and Burt's Bees Squeezy tinted balm. Production of some recent innovation that had been temporarily suspended during the pandemic, such as Clorox compostable cleaning wipes and Clorox Scentiva products, were relaunched toward the end of the fiscal year.

In international markets, the Company delivered volume and sales growth, largely resulting from sustained demand for cleaning and disinfecting products as well as other essential household products as a result of COVID-19. Since cleaning and disinfecting products account for more than half of the segment’s sales and due to changes in consumer behavior around the world with greater focus on health as a result of the COVID-19 pandemic, consumer demand continues to be high. Supported by a dedicated supply chain, Clorox expanded its disinfecting wipes business geographically in international markets during fiscal year 2021.

In June 2021, Clorox announced an increase of 5% in its quarterly dividend. In fiscal year 2021, the Company paid $558 million in dividends to stockholders.

Finally, in fiscal year 2021, Clorox continued to make progress on its environmental, social and governance (ESG) goals that are integrated into the IGNITE strategy and throughout the business. Notably, the Company achieved 100% renewable electricity for U.S. and Canada operations in January 2021 – four years earlier than initially planned. Efforts to reduce packaging waste, promote product stewardship, support employee and consumer well-being, and drive inclusion and diversity also made meaningful advancements, while several brands also announced their own sustainability goals. Clorox also became a signatory to the Ellen MacArthur Foundation's New Plastics Economy Global Commitment. The Company has been broadly recognized for its corporate responsibility efforts, included on the Barron’s 2020 100 Most Sustainable Companies list, 2021

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Bloomberg Gender-Equality Index, the Human Rights Campaign’s 2021 Corporate Equality Index and the 2021 Parity.org Best Places for Women to Advance list, among others.

In fiscal year 2022, the Company anticipates ongoing challenges that may impact its sales and margins, including continued uncertainty related to the COVID-19 pandemic, rising commodity costs, evolving consumer behaviors, high levels of competition in select categories, a more competitive and evolving retail environment, persistently high manufacturing and logistics costs, changes in foreign currency exchange rates, and an uncertain macroeconomic environment in the U.S. and in many international markets.

As announced in August 2021, a significant long-term investment in digital capabilities and productivity enhancements will shape the Company’s outlook for fiscal year 2022 and beyond. Clorox plans to invest approximately $500 million over the next five years, including about $90 million in fiscal year 2022, on these operating and capital expenditures. The savings realized from the program will generate efficiencies and better position the Company in supply chain, digital commerce, innovation and brand building over the long term.

For additional information on recent business developments, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Exhibit 99.1, incorporated herein by reference.

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Financial Information About Operating Segments and Principal Products

The Company operates through strategic business units (SBUs) that are also the Company’s operating segments. These SBUs are then aggregated into four reportable segments: Health and Wellness, Household, Lifestyle and International. These four reportable segments consist of the following:

• Health and Wellness consists of cleaning products, professional products, and vitamins, minerals and supplement products mainly marketed and sold in the U.S. Products within this segment include cleaning products such as laundry additives and home care products, primarily under the Clorox®, Clorox2®, Scentiva®, Pine-Sol®, Liquid-Plumr®, Tilex®, and Formula 409® brands; professional cleaning and disinfecting products under the CloroxPro™, Clorox Healthcare®, and Clorox® Total 360® brands; professional food service products under the Hidden Valley® brand; and vitamins, minerals and supplement products under the RenewLife®, Natural Vitality®, NeoCell®, and Rainbow Light® brands.

• Household consists of cat litter products, bags and wraps, and grilling products marketed and sold in the U.S. Products within this segment include cat litter products under the Fresh Step®, Scoop Away® and Ever Clean® brands, bags and wraps under the Glad® brand; and grilling products under the Kingsford® and Kingsford® Match Light® brands.

• Lifestyle consists of food, natural personal care products, and water-filtration marketed and sold in the U.S. Products within this segment include dressings, dips, seasonings and sauces, primarily under the Hidden Valley® brand; natural personal care products under the Burt’s Bees® brand; and water-filtration systems and filters under the Brita® brand.

• International consists of products sold outside the U.S. Products within this segment include laundry additives; home care products; water-filtration systems and filters; digestive health products; grilling products; cat litter products; food products; bags and wraps; natural personal care products; and professional cleaning and disinfecting products marketed primarily under the Clorox®, Ayudin®, Clorinda®, Poett®, Pine-Sol®, Glad®, Brita®, RenewLife®, Ever Clean® and Burt’s Bees® brands.

The Company’s products are marketed and sold globally. The following table provides the Company’s global product lines, which were sold in the U.S. (including products sold in the Professional Products SBU) and International, that accounted for 10% or more of consolidated net sales for the fiscal years ended June 30:

Principal Markets and Methods of Distribution

In the U.S., most of the Company’s products are nationally advertised and sold to mass retailers, grocery outlets, warehouse clubs, dollar stores, home hardware centers, military stores and other retail outlets primarily through a direct sales force; to grocery stores and grocery wholesalers primarily through a combination of direct sales teams and a network of brokers; and through e-commerce retailers. The Company also sells many of its products through alternative retail channels, including hard discounters, subscription services and buying clubs. Some brands are sold using the direct-to-consumer model. The Company sells institutional, janitorial, food-service and healthcare products through a direct sales force and a network of brokers to distributors and redistributors. Outside the U.S., the Company sells products to the retail trade through subsidiaries, licensees, distributors and joint-venture arrangements with local partners.

Sources and Availability of Raw Materials

The Company purchases raw materials from numerous unaffiliated U.S. and international suppliers, some of which are sole-source or single-source suppliers. Interruptions in the delivery of these materials could adversely impact the Company. Key raw materials used by the Company include resin, non-woven fabrics for wipes products, sodium hypochlorite, corrugated cardboard, soybean oil, solvent, derivatives of amines and other chemicals and agricultural commodities. Sufficient raw materials were generally available during fiscal year 2021. Due primarily to weather and COVID-19 related supply chain disruptions combined with increased demand as the economy re-opens, limited supply constraints and commodity costs increases for certain raw materials and finished goods were experienced. The Company expects continued volatility and increased cost pressures in both commodities and transportation to continue in fiscal year 2022.

The Company generally utilizes supply contracts to help ensure availability and a number of forward-purchase contracts to help reduce the volatility of the pricing of raw materials needed in its operations. However, the Company is highly exposed to changes in the prices of commodities and transportation used in manufacturing and shipping of its products. For further information regarding the impact of changes in commodity prices, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Exhibit 99.1, “Risk Factors – Volatility and increases in the costs of raw materials, energy, transportation, labor and other necessary supplies or services have negatively impacted, and may continue to negatively impact, the Company’s net earnings and cash flow” and “Risk Factors – Supply chain issues as a result of a reliance on a limited base of suppliers or the COVID-19 pandemic may result in product shortages or disruptions to the Company’s business” in Item 1.A.

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Patents and Trademarks

Most of the Company’s brand name consumer products are protected by registered trademarks. The Company’s brand names and trademarks are highly important to its business, and the Company vigorously protects its trademarks from apparent infringements. Maintenance of brand equity value is critical to the Company’s success. The Company’s patent rights are also material to its business and are asserted, where appropriate, against apparent infringements.

Seasonality

Most sales of the Company’s grilling products occur during the months of March through September each calendar year. The volume and sales of grilling products may be affected by weather conditions.

Customers

Net sales to the Company’s largest customer, Walmart Stores, Inc. and its affiliates, were 25% of consolidated net sales for the fiscal years ended June 30, 2021, 2020 and 2019, and occurred across all of the Company’s reportable segments. No other individual customer accounted for 10% or more of the Company’s consolidated net sales in any of these fiscal years. The Company’s five largest customers accounted for nearly half of the Company’s consolidated net sales for each of the fiscal years 2021, 2020 and 2019.

Competition

The markets for consumer products are highly competitive. The Company’s products compete with other nationally advertised brands and with “private label” brands within each category. Competition comes from similar and alternative products, some of which are produced and marketed by major multinational or national companies having financial resources greater than those of the Company. In addition, the Company faces competition from retailers, including club stores, grocery stores, drugstores, dollar stores, mass merchandisers, e-commerce retailers and subscription services. Furthermore, as the Company currently experiences increased demand for many of its products, especially its disinfecting products, in response to COVID-19, it expects heightened competitive activity from strong local competitors, other large multinational companies, and new entrants into the market in many of its categories, especially the disinfecting category. The Company’s products generally compete on the basis of product performance, brand reputation and recognition, image and price. A newly introduced consumer product (whether improved or newly developed) usually encounters intense competition requiring substantial expenditures for advertising, sales promotion and trade merchandising support. If a product gains consumer acceptance, it typically requires continued advertising and promotional support and ongoing product innovation to maintain its relative market position. For further information regarding the intense competition the Company faces, see “Risk Factors – The Company faces intense competition in its markets, which could lead to reduced net sales, net earnings and cash flow” in Item 1.A.

Environmental Matters

For information regarding noncapital expenditures related to environmental matters, see the discussions below under “Risk Factors – Environmental matters create potential liabilities that could adversely affect the Company’s financial condition and results of operations” in Item 1.A. No material capital expenditures relating to environmental compliance are presently anticipated.

HUMAN CAPITAL MANAGEMENT

Purpose

The Clorox Company is led by our purpose to champion people to be well and thrive every single day – from our employees to the consumers and communities we serve around the world.

Launched in 2019, the IGNITE strategy accelerates innovation in key areas to drive growth and deliver value through a focus on four strategic choices over the long term: Fuel Growth, Innovate Experiences, Reimagine Work and Evolve the Portfolio. Goals for ESG performance in our pillars of Healthy Lives, Clean World and Thriving Communities also are integrated into the strategy.

Employees

As of June 30, 2021, the Company employed about 9,000 people worldwide, with 71% in the U.S. and 29% working in our international locations. Our U.S. workforce includes 50% nonproduction employees and 50% production employees, while our international workforce includes 55% nonproduction employees and 45% production employees.

Values-Based Culture

As a Company, we are guided by core beliefs that represent who we are, how we conduct our business and our expectations for our people and business partners. Our values also reinforce our focus on delivering growth and inform how we treat and care for our employees.

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Company Values

Do the Right Thing: It's bigger than any one of us, yet it starts with each of us. We lead with integrity, and we earn trust – in every moment and with every choice. We are hungry to grow our business and believe that winning only counts if it's done in the right way.

Put People at the Center: We genuinely care about people. So, we understand the impact of our words and actions and feel a responsibility to deliver for our consumers, customers, teammates and communities. We meet our commitments, put health and safety first and strive for a just and inclusive world.

Play to Win: We set the pace for growth in each of our categories. We reimagine the game and are each hungry to do more, think bigger, and execute better. It feels like a punch to the gut when we lose. We have high aspirations and the grit to take on big challenges, so we move forward together with courage and resilience in the face of obstacles.

Inclusion and Diversity

People are critical to our efforts to drive growth and deliver value for shareholders, which is reflected in the strategic pillars of our IGNITE strategy. One of the ways we have put people at the center is by continuing to work toward a more inclusive and diverse workplace where each person feels respected, valued and seen and can be the best version of themselves – from women and people of color to LGBTQ+ and veterans, among others. With employees, management and directors representing the diversity of consumers we serve around the world, we are able to access stronger insights into different cultures and backgrounds, which ultimately helps us better address consumer needs. About a dozen employee resource groups reflecting the diverse demographics of our workforce also provide important perspectives through ongoing learning and dialogue with businesses and the Company as a whole on a variety of issues related to marketing, inclusion, diversity and racial justice.

As of June 30, 2021, people of color1 represented 38% of U.S. nonproduction employees, 31% of U.S. nonproduction managers and 42% of U.S. production employees. Women made up 52% of our global nonproduction employees and 46% of our global nonproduction managers. Clorox’s first female CEO, Linda Rendle, was promoted to lead the Company in September 2020. Additionally, 42% of our board is female and 33% are people of color, with our Nominating, Governance and Corporate Responsibility Committee and our Audit Committee chaired by people of color. In addition, the Clorox Executive Committee is composed of 50% women and 25% people of color.

Based on our Inclusion and Diversity strategy, we have helped promote a greater sense of inclusion through a variety of initiatives.

In fiscal year 2021, our CEO renewed the Company's commitment to CEO Action for Diversity, reflecting a personal pledge to advancing inclusion and diversity. Clorox was also included in the 2021 Bloomberg Gender Equality Index, which measures gender equality across the pillars of female leadership and talent pipeline, equal pay and gender pay parity, inclusive culture, sexual harassment policies, and pro-women brand.

Hiring, Development and Retention

We look to attract and retain the best talent to help the Company deliver against our strategy and commitments. We prioritize career growth and leadership development because growing our talent and building our capabilities supports our retention efforts and helps us establish a strong foundation for long-term success. Our investments include a suite of training and education for people managers to help them become effective coaches and leaders, mentoring programs and initiatives to help build a pipeline of diverse talent, such as recruiting events developed with our employee resource groups, our Future@CLX leadership program for first-year college students, and partnerships with third-party organizations that work to advance equity and opportunity for protected classes. We also conduct a robust talent review and leader succession planning process annually to ensure a strong pipeline for key roles.

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Employee Engagement

We implement an ongoing listening strategy, which includes annual and more frequent pulse surveys. We also survey our employees on their engagement to gauge their perception of the Company as a place to work as well as their views of leadership, understanding of our IGNITE strategy, and sense of inclusion. In fiscal year 2021, we continued to have high employee engagement of 87%, compared to the 85% Fortune 500 score at the 75th percentile – putting us in the top quartile among those companies2**.** The employee engagement surveys are part of our continuous improvement mindset around building an engaging culture at Clorox.

Employee Safety and Well-Being

As a health and wellness company, the Company takes a holistic approach to caring for our employees, with benefits and programs designed to support physical, mental, emotional and financial well-being.

Our focus on safety is an example of how we put people at the center and signified by our commitment to the well-being of our people built into our IGNITE strategy. We fulfill that pledge through a combination of education, training and related policies, while also operating in compliance with applicable regulations, including OSHA guidelines in the U.S.. This approach was particularly important as the Company continued to navigate the global pandemic and implemented enhanced safety protocols across our facilities, including preventive detection measures, contact tracing, frequent cleaning and sanitizing, required use of personal protective equipment, adjustment of work schedules to reduce exposure, and retention of medical experts to advise us on plant practices and procedures. In fiscal year 2021, the Company’s reportable incident rate (RIR) was 0.26, significantly lower than the 3.3 average RIR for goods-producing manufacturing companies in 2019, which is the latest available data from the U.S. Bureau of Labor Statistics3.

The Company continued to support employee well-being during the global pandemic by offering additional physical and mental health benefits, including supplemental emergency paid time off, 100% coverage of COVID-19 testing and treatment, and a $1 million employee relief fund as well as enhanced mental health and dependent care resources. The Company also provided ongoing health and safety education, including bringing in experts on mental health and COVID-19 vaccines.

To support our people’s financial well-being, the Company provides competitive compensation – including short- and long-term incentives – to attract and retain top talent. Our pay-for-performance philosophy and commitment to pay equity helps ensure our compensation is fair and rewards employees for their contributions. In addition, as part of our ESG commitments, we support our employees’ retirement readiness by offering third-party financial planning services and a 401(k) plan that is above market relative to the industry average, with the Company contributing up to 10% of an employee’s salary.

Societal Well-Being

The Company remains committed to a healthy and equitable society to ensure our collective well-being for future generations. In the past year, we provided cash grants and product donations while also implementing cause marketing programs totaling about $20 million to support our communities and promote health and safety, education and racial justice.

Available Information

The Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Exchange Act are available on the Company’s website, free of charge, as soon as reasonably practicable after the reports are electronically filed with or furnished to the SEC. These reports are available at TheCloroxCompany.com under Investors/Financial Information/SEC Filings. Additionally, the Company routinely posts additional important information, including press releases, on its website and recognizes its website as a channel of distribution to reach public investors and as a means of disclosing material non-public information for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our website in addition to our SEC filings and public webcasts. These items are available at TheCloroxCompany.com under Investors/Investor News and Events.

Information relating to corporate governance at Clorox, including the Company’s Code of Conduct, the Clorox Company Board

of Directors Governance Guidelines and Board Committee charters for the Management Development and Compensation

Committee, the Audit Committee, and the Nominating, Governance and Corporate Responsibility Committee, is available at

TheCloroxCompany.com under Who We Are/Corporate Governance or https://www.thecloroxcompany.com/who-we-are/

corporate-governance/. The Company will provide any of the foregoing information without charge upon written request to

Corporate Communications, The Clorox Company, 1221 Broadway, Oakland, CA 94612-1888. The information contained on

the Company’s website is not included as a part of, or incorporated by reference into, this Report.

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The risks and uncertainties set forth below, as well as other factors described elsewhere in this Report or in other filings by the Company with the SEC, could adversely affect the Company’s business, financial condition and results of operations. Additional risks and uncertainties that are not currently known to the Company or that are not currently believed by the Company to be material may also harm the Company’s business, financial condition and results of operations.

Business and Industry Risks

The Company faces intense competition in its markets, which could lead to reduced net sales, net earnings and cash flow.

The Company faces intense competition from consumer product companies both in the U.S. and in its international markets. Most of the Company’s products compete with other widely advertised, promoted and merchandised brands within each product category. The Company also faces competition from retailers, including club stores, grocery stores, drugstores, dollar stores, mass merchandisers, e-commerce retailers and subscription services, which are increasingly offering “private label” brands that are typically sold at lower prices and compete with the Company’s products in certain categories. Increased purchases of “private label” products or other lower cost priced brands could reduce net sales of the Company’s higher-margin products or there could be a shift in product mix to lower-margin offerings, which would negatively impact our margins. The Company’s products generally compete on the basis of product performance, brand reputation and recognition, image and price. Advertising, promotion, merchandising and packaging also have significant impacts on consumer purchasing decisions, and the Company is increasingly using digital media marketing and promotional programs to reach consumers. A newly introduced consumer product (whether improved or newly developed) usually encounters intense competition requiring substantial expenditures for advertising, sales promotion and trade merchandising. If a product gains consumer acceptance, it typically requires continued advertising, promotional support and product innovations to maintain its relative market position. If the Company’s advertising, marketing and promotional programs, including its use of digital media to reach consumers, are not effective or adequate, the Company’s net sales may be negatively impacted.

Some of the Company’s competitors are larger than the Company and have greater financial resources. These competitors may be able to spend more aggressively on advertising and promotional activities, introduce competing products more quickly and respond more effectively to changing business and economic conditions than the Company can. In addition, as the Company currently experiences elevated demand for many of its products, especially its disinfecting products, it expects continued heightened competitive activity from strong local competitors, other large multinational companies, and new entrants into the market in many of its categories, especially the disinfecting category. The Company expects such activities to include more aggressive product claims and marketing challenges, increased promotional spending and geographic expansion, and marketing of new disinfecting products. It expects promotional activities to increase as retailers try aggressively to get consumers back into their stores after prolonged “stay at home” and other government restrictions continue to ease. Furthermore, the Company’s competitors may attempt to gain market share by offering products at prices at or below those typically offered by the Company. Competitive activity may require the Company to increase its spending on advertising and promotions and/or reduce prices, which could lead to reduced sales, margins and/or net earnings.

The changing retail environment and changing consumer preferences could adversely affect the Company’s business, financial condition and results of operations.

The Company’s sales are largely concentrated in the traditional retail grocery, mass retail outlet, warehouse club and dollar store channels, in addition to e-commerce channels. However, the retail environment continues to evolve, and may change to a more significant extent or at a faster pace in light of the COVID-19 pandemic with a greater consumer emphasis on health and wellness, and this could significantly change the way traditional retailers do business. Alternative retail channels, including hard discounters, subscription services and buying clubs, have become more prevalent and popular. In addition, a growing number of alternative sales channels and business models, such as niche brands, native online brands, private label and store brands, direct-to-consumer brands and channels and discounter channels, have emerged in the markets we serve. In particular, the growing presence of, and increasing sales through, e-commerce retailers have affected, and may continue to affect, consumer preferences (as consumers increasingly shop online, including in response to the COVID-19 pandemic) and market dynamics, including any pricing pressures for consumer goods as retailers face added costs to build their e-commerce capacity. These trends have been magnified due to the COVID-19 pandemic in many of our geographies. Further, consumer preferences continue to evolve due to a number of factors, including fragmentation of the consumer market and changes in consumer demographics, which includes the aging of the general population and the emergence of millennial and younger generations who have different spending, consumption and purchasing habits; evolving consumer concerns or perceptions regarding ESG practices of manufacturers, including the sourcing and sustainability of packaging materials, such as single-use plastics; a growing demand for natural or organic products and ingredients; evolving consumer concerns or perceptions (whether accurate or inaccurate) regarding the effects of ingredients or substances present in certain consumer products; and changing consumer sentiment toward non-local products or sources. If we are not successful in continuing to adapt to changing consumer preferences and market dynamics or expanding sales through e-commerce retailers or alternative retail channels, our business, financial condition and results of operations may be negatively impacted. In addition, e-commerce and alternative retail channels may create significant pricing pressures for consumer goods, presenting additional challenges to increasing prices in response to commodity or other cost increases in all of the channels into which the Company sells. If these e-commerce and

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alternative retail channels were to take significant market share away from traditional retailers and/or the Company is not successful in these channels or business models, our margins and results of operations may be materially and negatively impacted.

The currently evolving situation related to the COVID-19 pandemic could adversely affect the Company’s business, financial condition and results of operations.

The ongoing COVID-19 pandemic, including the emergence of variants for which vaccines may not be effective, may negatively affect our business by causing or contributing to, among other things:

• Significant disruptions in our business operations and in the ability of significant third-party vendors, manufacturing and other business or commercial partners, including customers, to meet obligations to us.

• Significant decrease or volatility in sales of or demand for our significant products due to, among other things: closure or reduced operating hours of our key customers; consumer inability to purchase our products due to prolonged inventory shortages, illness or government implemented restriction

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The Company owns or leases various manufacturing, distribution, office and research and development facilities, including a leased facility in Pleasanton, CA, which houses the Company’s primary research and development group, as well as other administrative and operational support personnel, and a leased office space in Oakland, CA for its corporate headquarters. Management believes the Company’s facilities are adequate to support the business efficiently.

The Company is subject to routine litigation incidental to its business in the United States and in international locations, including various lawsuits and claims relating to issues such as contract disputes, product liability, patents and trademarks, advertising, commercial, administrative, employment, antitrust, securities, consumer class actions and other matters. Although the results of claims and litigation cannot be predicted with certainty, based on management’s analysis, it is the opinion of management that the ultimate disposition of these matters, to the extent not previously provided for or disclosed in the

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Company’s consolidated financial statements in Exhibit 99.1, will not have a material adverse effect, individually or in the aggregate, on the Company’s consolidated financial statements taken as a whole.

Not applicable.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

The names, ages, year first elected and current titles of each of the executive officers of the Company as of August 10, 2021, are set forth below:

There is no family relationship between any of the above-named persons, or between any of such persons and any of the directors of the Company. See Item 10 of Part III of this Report for additional information.

Linda Rendle is the chief executive officer of the Company, a position she has held since September 2020. Prior to this role, she served as the president of the Company from May 2020 to September 2020. She served as executive vice president – cleaning, international, strategy and operations from July 2019 to May 2020. From January 2019 to July 2019, she served as executive vice president – strategy and operations. From June 2018 to January 2019, she served as executive vice president – cleaning and strategy. She served as senior vice president – general manager, cleaning division of the Company, from August 2016 to June 2018, having taken on responsibility for the professional products division in April 2017. She served as vice president – general manager, home care from October 2014 to August 2016. From April 2012 to October 2014, she served as vice president – sales, cleaning division. From August 2011 to April 2012, she served as director of sales planning – litter, food & charcoal. From January 2010 to August 2011, she served as director of sales – supply chain. Ms. Rendle joined the Company in 2003.

Kevin B. Jacobsen is the executive vice president – chief financial officer of the Company, a position he has held since January 2019. Prior to this role, he served as senior vice president – chief financial officer from April 2018 to January 2019. He served as vice president – financial planning and analysis, from November 2011 through March 2018. Mr. Jacobsen joined the Company in 1995 and has held a number of senior leadership roles in the Company’s finance department over the years, including serving as the finance leader for the specialty division, head of finance for Brazil operation, the product supply organization and various business units.

Kirsten Marriner is the executive vice president – chief people and corporate affairs officer of the Company, a position she has held since December 2020. She was appointed to executive vice president - chief people officer in January 2019. Prior to this role she served as senior vice president – chief people officer from March 2016 to January 2019. Prior to joining the Company, she served as senior vice president and chief human resources officer at Omnicare, from March 2013 to August 2015. She served in various leadership roles, including as senior vice president, director of talent management and development at Fifth Third Bank, from October 2004 to March 2013. Ms. Marriner joined the Company in March 2016.

Tony Matta is the executive vice president – chief growth officer of the Company, a position he has held since October 2020. Prior to joining Clorox, he was president of Nestlé Coffee Partners, a division of Nestlé U.S., from August 2018 to October 2020. Before joining Nestlé, he served as Starbucks Corporation's president, global channel development from January 2017 to August 2018, and senior vice president and general manager, U.S. CPG business from April 2016 to January 2017. Previously, he was chief marketing officer at Kraft Foods Canada Inc. from June 2013 to March 2016. Before joining Kraft, Mr. Matta held

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various leadership roles in marketing at PepsiCo and Procter & Gamble in the U.S., U.K. and Canada. Mr. Matta joined the Company in 2020.

Eric Reynolds is the executive vice president - chief operating officer of the Company, a position he has held since September 2020. Prior to this role, he served as executive vice president - household and lifestyle of the Company from July 2019 to September 2020. He served as executive vice president – cleaning and Burt’s Bees from January 2019 to July 2019. From January 2015 to January 2019, he served as senior vice president – chief marketing officer. He served as vice president – general manager, Europe, Middle East, Africa and Asia from May 2012 to January 2015. From May 2011 to April 2012, he was director, international business development. From June 2008 to April 2011, he was general manager, Caribbean. Mr. Reynolds joined the Company in 1998.

Chau Banks is the senior vice president – chief information and enterprise analytics officer of the Company, a position she has held since June 2020, having taken on responsibility for enterprise analytics since September 2020. Prior to this role, she served as chief technology and digital officer at Revlon Consumer Products Company from January 2018 to June 2020. From September 2013 to November 2017, she was EVP, CIO and channel integration at New York & Company, Inc. (now RetailWinds Inc.). She has held leadership positions at leading global retailers including COACH, Abercrombie & Fitch and LBrands. She previously served as a management consultant at Capgemini and Ernst & Young. She also previously held positions at Energizer and Kimberly-Clark.

Diego J. Barral is the senior vice president – general manager, international of the Company, a position he has held since April 2018. Prior to this role, he served as vice president – general manager, Latin America, from January 2012 to April 2018. Mr. Barral joined the company in 1995 and has served in various finance, procurement, business development and international roles.

Troy Datcher is the senior vice president – chief customer officer of the Company, a position he has held since February 2019. Prior to this role, he served as vice president - sales planning, cleaning/specialty and sports marketing from May 2014 to February 2019. He served as director of sales planning – Glad and Brita Products Division from April 2010 through May 2014. During his combined 20 years with the Company, Mr. Datcher has held various positions within the sales function, including vice president – corporate capability development and sports marketing, as well as region sales manager – specialty. Mr. Datcher first joined the Company in 1998.

Denise Garner is the senior vice president – chief innovation officer of the Company, a position she has held since January 2015. Prior to this role, she served as vice president, R&D – global cleaning & international, from January 2010 to December 2014. Ms. Garner joined the Company in 1988.

Stacey Grier is the senior vice president – chief marketing and strategy officer of the Company, a position she has held since January 2019, having taken on responsibility for enterprise strategy since September 2020. Prior to this role, she served as vice president - brand engagement and enhanced wellness marketing from October 2018 to January 2019. She served as vice president - brand and marketing strategy from October 2016 through October 2018. Prior to joining the Company, she served as chief strategic officer at DDB Worldwide from April 1996 to June 2016. Ms. Grier joined the Company in 2016.

Angela Hilt is the senior vice president – chief legal officer of the Company, a position she has held since December 2020. Prior to this role, she served as vice president – corporate secretary and deputy general counsel from September 2018 to December 2020, and vice president – corporate secretary and associate general counsel from October 2008 to September 2018. She served as senior corporate counsel from December 2005 to October 2008. Ms. Hilt joined the Company in 2005.

Rick McDonald is the senior vice president - chief product supply officer of the Company, a position he has held since December 2020. Prior to this role, he served as vice president - global operations from December 2017 to December 2020. He served as vice president - integration, international division from May 2013 to November 2017. Mr. McDonald has held other leadership roles in the Company’s product supply organization, including vice president - global logistics, and vice president – integrator, cleaning division. Mr. McDonald joined the Company in 1992.

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PART II

Market Information

The Company’s common stock is listed on the New York Stock Exchange. The ticker symbol is CLX.

Holders

The number of record holders of the Company’s common stock as of July 28, 2021, was 9,624 based on information provided by the Company’s transfer agent.

Equity Compensation Plan Information

See Part III, Item 12 hereof, which is incorporated herein by reference.

Issuer Purchases of Equity Securities

In May 2018, the Board of Directors authorized the Company to repurchase up to $2,000 million in shares of common stock on the open market (Open-Market Program), which has no expiration date.

In August 1999, the Board of Directors authorized a stock repurchase program to reduce or eliminate dilution upon the issuance of common stock pursuant to the Company’s stock compensation plans (the Evergreen Program). In November 2005, the Board of Directors authorized the extension of the Evergreen Program to reduce or eliminate dilution in connection with issuances of common stock pursuant to the Company’s 2005 Stock Incentive Plan. The Evergreen Program has no expiration date and has no specified limit as to dollar amount and therefore is not included in column [d] below.

The following table sets forth the purchases of the Company’s securities by the Company and any affiliated purchasers within the meaning of Rule 10b-18(a)(3) (17 CFR 240.10b-18(a)(3)) during the fourth quarter of fiscal year 2021.

(1)All of the shares purchased in May and June 2021 were acquired pursuant to the Company’s Open-Market Program.

(2)Average price paid per share in the period includes commission.

This information appears under “Five-Year Financial Summary” in Exhibit 99.1, which is incorporated herein by reference.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This information appears under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Exhibit 99.1, which is incorporated herein by reference.

This information appears under “Quantitative and Qualitative Disclosures about Market Risk” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Exhibit 99.1, which is incorporated herein by reference.

These statements and data appear in Exhibit 99.1, which is incorporated herein by reference.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s chief executive officer and chief financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Report. Based on that evaluation, the chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this Report, were effective such that the information required to be disclosed by the Company in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding disclosure.

Management’s Report on Internal Control Over Financial Reporting

Management’s report on internal control over financial reporting is set forth in Exhibit 99.1, and is incorporated herein by reference. The Company’s independent registered public accounting firm, Ernst & Young, LLP, has audited the effectiveness of the Company’s internal control over financial reporting as of June 30, 2021. See “Report of Independent Registered Public Accounting Firm,” which appears in Exhibit 99.1.

Change in Internal Control Over Financial Reporting

No change in the Company’s internal control over financial reporting occurred during the fourth fiscal quarter of the fiscal year ended June 30, 2021, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9.B. OTHER INFORMATION

Not applicable.

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PART III

See “Information about our Executive Officers” in Part I of this Report.

The Company has adopted a Code of Conduct that applies to its principal executive officer, principal financial officer and principal accounting officer, among others. The Code of Conduct is located on the Company’s website at TheCloroxCompany.com under Who We Are/Corporate Governance/Code of Conduct or https://www.thecloroxcompany.com/who-we-are/corporate-governance/codes-of-conduct/. The Company intends to satisfy the requirement under Item 5.05 of Form 8-K regarding disclosure of amendments to, or waivers from, provisions of its Code of Conduct by posting such information on the Company’s website. The Company’s website also contains its corporate governance guidelines and the charters of its principal board committees.

Information regarding the Company’s directors and corporate governance set forth in the Proxy Statement is incorporated herein by reference.

Information regarding executive and director compensation, Management Development and Compensation Committee interlocks and insider participation and the report of the Management Development and Compensation Committee of the Company’s board of directors set forth in the Proxy Statement is incorporated herein by reference.

Information regarding security ownership of certain beneficial owners, management and directors and securities authorized for issuance under equity compensation plans set forth in the Proxy Statement is incorporated herein by reference.

Information regarding certain relationships and related transactions and director independence set forth in the Proxy Statement is incorporated herein by reference.

Information regarding principal accounting fees and services set forth in the Proxy Statement is incorporated herein by reference.

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PART IV

(a)Financial Statements and Schedules:

Consolidated Financial Statements and Reports of Independent Registered Public Accounting Firm included in Exhibit 99.1, incorporated herein by reference.

Reports of Independent Registered Public Accounting Firm.

Consolidated Statements of Earnings for the fiscal years ended June 30, 2021, 2020 and 2019.

Consolidated Statements of Comprehensive Income for the fiscal years ended June 30, 2021, 2020 and 2019.

Consolidated Balance Sheets as of June 30, 2021 and 2020.

Consolidated Statements of Stockholders’ Equity for the fiscal years ended June 30, 2021, 2020 and 2019.

Consolidated Statements of Cash Flows for the fiscal years ended June 30, 2021, 2020 and 2019.

Notes to Consolidated Financial Statements.

(b)Exhibits:

INDEX TO EXHIBITS

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(*) Indicates a management or director contract or compensatory plan or arrangement required to be filed as an exhibit to this report.

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.