filings.toolsItem 1. Financial Statements
85K characters. Original on sec.gov · Markdown
Item 1. Financial Statements
The Clorox Company
Condensed Consolidated Statements of Earnings (Unaudited)
(Dollars in millions, except per share data)
| Three months ended | Six months ended | ||||||||||||||||||||||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | ||||||||||||||||||||
| Net sales | $ | 1,673 | $ | 1,686 | $ | 3,102 | $ | 3,448 | |||||||||||||||
| Cost of products sold | 951 | 948 | 1,784 | 1,903 | |||||||||||||||||||
| Gross profit | 722 | 738 | 1,318 | 1,545 | |||||||||||||||||||
| Selling and administrative expenses | 262 | 280 | 539 | 561 | |||||||||||||||||||
| Advertising costs | 190 | 191 | 356 | 392 | |||||||||||||||||||
| Research and development costs | 29 | 31 | 57 | 62 | |||||||||||||||||||
| Loss on divestiture | — | — | — | 118 | |||||||||||||||||||
| Interest expense | 25 | 22 | 48 | 43 | |||||||||||||||||||
| Other (income) expense, net | 1 | (23) | (4) | (45) | |||||||||||||||||||
| Earnings before income taxes | 215 | 237 | 322 | 414 | |||||||||||||||||||
| Income tax expense | 54 | 43 | 79 | 117 | |||||||||||||||||||
| Net earnings | 161 | 194 | 243 | 297 | |||||||||||||||||||
| Less: Net earnings attributable to noncontrolling interests | 4 | 1 | 6 | 5 | |||||||||||||||||||
| Net earnings attributable to Clorox | $ | 157 | $ | 193 | $ | 237 | $ | 292 | |||||||||||||||
| Net earnings per share attributable to Clorox | |||||||||||||||||||||||
| Basic net earnings per share | $ | 1.29 | $ | 1.55 | $ | 1.94 | $ | 2.36 | |||||||||||||||
| Diluted net earnings per share | $ | 1.29 | $ | 1.54 | $ | 1.93 | $ | 2.34 | |||||||||||||||
| Weighted average shares outstanding (in thousands) | |||||||||||||||||||||||
| Basic | 121,602 | 123,766 | 122,116 | 123,781 | |||||||||||||||||||
| Diluted | 121,915 | 124,662 | 122,466 | 124,669 |
See Notes to Condensed Consolidated Financial Statements (Unaudited)
The Clorox Company
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(Dollars in millions)
| Three months ended | Six months ended | ||||||||||||||||||||||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | ||||||||||||||||||||
| Net earnings | $ | 161 | $ | 194 | $ | 243 | $ | 297 | |||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
| Foreign currency translation adjustments | 11 | (34) | 7 | (20) | |||||||||||||||||||
| Net unrealized gains (losses) on derivatives | (4) | 1 | (8) | (5) | |||||||||||||||||||
| Pension and postretirement benefit adjustments | (1) | (1) | (1) | (1) | |||||||||||||||||||
| Total other comprehensive (loss) income, net of tax | 6 | (34) | (2) | (26) | |||||||||||||||||||
| Comprehensive income | 167 | 160 | 241 | 271 | |||||||||||||||||||
| Less: Total comprehensive income attributable to noncontrolling interests | 4 | 1 | 6 | 5 | |||||||||||||||||||
| Total comprehensive income attributable to Clorox | $ | 163 | $ | 159 | $ | 235 | $ | 266 |
See Notes to Condensed Consolidated Financial Statements (Unaudited)
The Clorox Company
Condensed Consolidated Balance Sheets
(Dollars in millions, except per share data)
| 12/31/2025 | 6/30/2025 | ||||||||||
| (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 227 | $ | 167 | |||||||
| Receivables, net | 671 | 821 | |||||||||
| Inventories, net | 608 | 523 | |||||||||
| Prepaid expenses and other current assets | 222 | 97 | |||||||||
| Total current assets | 1,728 | 1,608 | |||||||||
| Property, plant and equipment, net of accumulated depreciation and amortization of $3,007 and $2,911, respectively | 1,247 | 1,267 | |||||||||
| Operating lease right-of-use assets | 368 | 333 | |||||||||
| Goodwill | 1,231 | 1,229 | |||||||||
| Trademarks, net | 502 | 502 | |||||||||
| Other intangible assets, net | 54 | 64 | |||||||||
| Other assets | 483 | 558 | |||||||||
| Total assets | $ | 5,613 | $ | 5,561 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities | |||||||||||
| Notes and loans payable | $ | 307 | $ | 4 | |||||||
| Current operating lease liabilities | 83 | 87 | |||||||||
| Accounts payable and accrued liabilities | 1,957 | 1,828 | |||||||||
| Total current liabilities | 2,347 | 1,919 | |||||||||
| Long-term debt | 2,486 | 2,484 | |||||||||
| Long-term operating lease liabilities | 341 | 305 | |||||||||
| Other liabilities | 385 | 351 | |||||||||
| Deferred income taxes | 19 | 20 | |||||||||
| Total liabilities | 5,578 | 5,079 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ equity | |||||||||||
| Preferred stock: $1.00 par value; 5,000,000 shares authorized; none issued or outstanding | — | — | |||||||||
| Common stock: $1.00 par value; 750,000,000 shares authorized; 130,741,461 shares issued as of December 31, 2025 and June 30, 2025; and 120,890,241 and 122,694,263 shares outstanding as of December 31, 2025 and June 30, 2025, respectively | 131 | 131 | |||||||||
| Additional paid-in capital | 1,304 | 1,319 | |||||||||
| Retained earnings | 190 | 432 | |||||||||
| Treasury stock, at cost: 9,851,220 and 8,047,198 shares as of December 31, 2025 and June 30, 2025, respectively | (1,591) | (1,404) | |||||||||
| Accumulated other comprehensive net (loss) income | (159) | (157) | |||||||||
| Total Clorox stockholders’ (deficit) equity | (125) | 321 | |||||||||
| Noncontrolling interests | 160 | 161 | |||||||||
| Total stockholders’ equity | 35 | 482 | |||||||||
| Total liabilities and stockholders’ equity | $ | 5,613 | $ | 5,561 |
See Notes to Condensed Consolidated Financial Statements (Unaudited)
The Clorox Company
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Dollars in millions)
| Six months ended | |||||||||||
| 12/31/2025 | 12/31/2024 | ||||||||||
| Operating activities: | |||||||||||
| Net earnings | $ | 243 | $ | 297 | |||||||
| Adjustments to reconcile net earnings to net cash provided by operations: | |||||||||||
| Depreciation and amortization | 111 | 107 | |||||||||
| Stock-based compensation | 34 | 40 | |||||||||
| Deferred income taxes | 92 | (19) | |||||||||
| Loss on divestiture | — | 112 | |||||||||
| Other | (16) | 5 | |||||||||
| Changes in: | |||||||||||
| Receivables, net | 156 | 64 | |||||||||
| Inventories, net | (83) | (12) | |||||||||
| Prepaid expenses and other current assets | (30) | (39) | |||||||||
| Accounts payable and accrued liabilities | (6) | (138) | |||||||||
| Operating lease right-of-use assets and liabilities, net | (4) | — | |||||||||
| Income taxes payable / prepaid | (93) | (16) | |||||||||
| Net cash provided by operations | 404 | 401 | |||||||||
| Investing activities: | |||||||||||
| Capital expenditures | (78) | (92) | |||||||||
| Proceeds from divestiture, net of cash divested | — | 128 | |||||||||
| Other | 1 | (1) | |||||||||
| Net cash (used for) provided by investing activities | (77) | 35 | |||||||||
| Financing activities: | |||||||||||
| Notes and loans payable, net | 303 | 184 | |||||||||
| Treasury stock purchased | (256) | (257) | |||||||||
| Cash dividends paid to Clorox stockholders | (302) | (302) | |||||||||
| Issuance of common stock for employee stock plans and other | (14) | 29 | |||||||||
| Net cash used for financing activities | (269) | (346) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 1 | (3) | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 59 | 87 | |||||||||
| Cash, cash equivalents and restricted cash: | |||||||||||
| Beginning of period | 170 | 207 | |||||||||
| End of period | $ | 229 | $ | 294 |
See Notes to Condensed Consolidated Financial Statements (Unaudited)
The Clorox Company
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share data)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The unaudited interim condensed consolidated financial statements for the three and six months ended December 31, 2025 and 2024, in the opinion of management, reflect all normal and recurring adjustments considered necessary for a fair presentation of the consolidated results of operations, financial position and cash flows of The Clorox Company and its controlled subsidiaries (the Company or Clorox) for the periods presented. However, the financial results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. Percentage and basis point calculations are based on rounded numbers, except for per share data and the effective tax rate.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been omitted or condensed pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). The information in this report should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended June 30, 2025, which includes a complete set of footnote disclosures, including the Company’s significant accounting policies.
Recently Issued Accounting Standards
Recently Issued Accounting Standards Not Yet Adopted
In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06)”, which modernizes the accounting for internal-use software to current development practices, clarifies when to begin capitalizing costs and enhances disclosure requirements. The ASU is effective for annual reporting periods beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” These amendments primarily require enhanced quantitative and qualitative disclosures in the notes to the financial statements for specific expense categories underlying the expenses presented on the income statement. These amendments are to be applied prospectively to financial statements issued after the effective date or retrospectively to any or all periods presented in the financial statements. Early adoption is permitted. The standard will be effective for annual periods beginning after December 15, 2026, and subsequent interim periods. The Company is currently evaluating the impact that the adoption of this guidance will have on the Company’s disclosures.
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” These amendments primarily require enhanced disclosures and disaggregation of income tax information by jurisdiction in the annual income tax reconciliation and quantitative and qualitative disclosures regarding income taxes paid. These amendments are to be applied prospectively, with the option to apply the standard retrospectively, for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on the Company’s disclosures.
Recently Adopted Accounting Standards
In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” These amendments primarily require enhanced disclosures about significant segment expenses regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss on an annual and interim basis. The ASU also requires all annual disclosures currently required by Topic 280 to be included in interim periods. These amendments are to be applied retrospectively for all periods presented in the financial statements and are effective for the annual period beginning July 1, 2024 and interim periods beginning July 1, 2025. The Company adopted the annual requirement for fiscal year 2025 and interim requirements in the first quarter of fiscal year 2026.
NOTE 2. VENTURE AGREEMENT
The Company’s venture agreement with The Procter & Gamble Company (P&G) for the Company’s Glad bags and wraps business expired on January 31, 2026. In connection with this agreement, P&G provided research and development (R&D) support to the Glad business. As of both December 31, 2025 and June 30, 2025, P&G had a 20% interest in the venture. The Company paid a royalty to P&G for its interest in the profits, losses and cash flows, as contractually defined, of the Glad business, which is included in Cost of products sold.
The venture agreement, at its expiration, required the Company to purchase P&G’s 20% interest for cash at fair value as established by predetermined valuation procedures. As of December 31, 2025 and June 30, 2025, the estimated fair value of P&G’s interest in the venture was $476, of which $476 and $501, respectively, was recognized and reflected in Accounts payable and accrued liabilities in the Company’s condensed consolidated balance sheet.
On January 31, 2026, the Company and P&G agreed that the Company will purchase P&G’s 20% interest for $476, which is expected to be paid in cash during the third quarter of fiscal year 2026.
The Glad business will continue to retain the exclusive core intellectual property licenses contributed by P&G on a royalty-free basis for the licensed products marketed.
NOTE 3. DIVESTITURE
Divestiture of Better Health Vitamins, Minerals and Supplements (VMS) Business
On September 10, 2024, the Company completed the divestiture of its Better Health VMS business. As a result of the transaction, the Company recorded an after tax loss of $118 during the first quarter of fiscal year 2025. Net sales of the Better Health VMS business for the three and six months ended December 31, 2024 was $0 and $38, respectively. Refer to notes to consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025 for further information related to the Better Health VMS business divestiture.
NOTE 4. INVENTORIES, NET
Inventories, net consisted of the following as of:
| 12/31/2025 | 6/30/2025 | ||||||||||
| Finished goods | $ | 519 | $ | 447 | |||||||
| Raw materials and packaging | 155 | 141 | |||||||||
| Work in process | 18 | 15 | |||||||||
| LIFO allowances | (84) | (80) | |||||||||
| Total inventories, net | $ | 608 | $ | 523 | |||||||
NOTE 5. SUPPLY CHAIN FINANCING PROGRAM
The Company has arranged for a global financial institution to offer a voluntary supply chain finance (SCF) program for the benefit of the Company’s suppliers. The Company’s current payment terms do not exceed 120 days in keeping with industry standards. The Company’s operating cash flows are directly impacted as a result of the extension of payment terms with suppliers. The SCF program enables suppliers to directly contract with the financial institution to receive payment from the financial institution prior to the payment terms between the Company and the supplier by selling the Company’s payables to the financial institution. Participation in the program is at the sole discretion of the supplier and the Company has no economic interest in a supplier's decision to enter into the agreement and has no direct financial relationship with the financial institution, as it relates to the SCF program. Once a supplier elects to participate in the SCF program and reaches an agreement with the financial institution, the supplier elects which individual Company invoices to sell to the financial institution. The terms of the Company’s payment obligations are not impacted by a supplier’s participation in the program and as such, the SCF program has no direct impact on the Company’s balance sheets or liquidity. The Company has not pledged any assets as security or provided guarantees under the SCF program.
All outstanding amounts related to suppliers participating in the SCF program are recorded within Accounts payable and accrued liabilities in the condensed consolidated balance sheets and the associated payments are included in operating activities within the condensed consolidated statements of cash flows. As of December 31, 2025 and June 30, 2025, the amount due to suppliers participating in the SCF program and included in Accounts payable and accrued liabilities was $198 and $236, respectively.
NOTE 6. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Financial Risk Management and Derivative Instruments
The Company is exposed to certain commodity, foreign currency and interest rate risks related to its ongoing business operations and uses derivative instruments to mitigate its exposure to these risks.
Commodity Price Risk Management
The Company may use commodity futures, options and swap contracts to limit the impact of price volatility on a portion of its forecasted raw material requirements. These commodity derivatives may be exchange traded or over-the-counter contracts and generally have original contractual maturities of less than 2 years. Commodity purchase and options contracts are measured at fair value using market quotations obtained from the Chicago Board of Trade commodity futures exchange and commodity derivative dealers.
The notional amounts of outstanding commodity derivatives, which related primarily to exposures in soybean oil used for the food business and jet fuel used for the grilling business, were $18 and $36 as of December 31, 2025 and June 30, 2025, respectively.
Foreign Currency Risk Management
The Company may also enter into certain over-the-counter derivative contracts to manage a portion of the Company’s forecasted foreign currency exposure associated with the purchase of inventory. These foreign currency contracts generally have original contractual maturities of less than 2 years. The foreign exchange contracts are measured at fair value using information quoted by foreign exchange dealers.
The notional amounts of outstanding foreign currency forward contracts used by the Company’s subsidiaries to hedge forecasted purchases of inventory were $53 and $67 as of December 31, 2025 and June 30, 2025, respectively.
Interest Rate Risk Management
The Company may enter into over-the-counter interest rate contracts to fix a portion of the benchmark interest rate prior to the anticipated issuance of fixed rate debt. These interest rate contracts generally have original contractual maturities of less than 3 years. The interest rate contracts are measured at fair value using information quoted by bond dealers.
The Company held no interest rate contracts as of both December 31, 2025 and June 30, 2025.
Commodity, Foreign Exchange and Interest Rate Derivatives
The Company designates its commodity forward, futures and options contracts for forecasted purchases of raw materials, foreign currency forward contracts for forecasted purchases of inventory and interest rate contracts for forecasted interest payments as cash flow hedges.
NOTE 6. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)
The effects of derivative instruments designated as hedging instruments on Other comprehensive (loss) income and Net earnings were as follows:
| Gains (losses) recognized in Other comprehensive (loss) income | |||||||||||||||||||||||
| Three months ended | Six months ended | ||||||||||||||||||||||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | ||||||||||||||||||||
| Commodity purchase derivative contracts | $ | (1) | $ | — | $ | (1) | $ | (3) | |||||||||||||||
| Foreign exchange derivative contracts | — | 3 | — | 2 | |||||||||||||||||||
| Total | $ | (1) | $ | 3 | $ | (1) | $ | (1) |
| Location of gains (losses) reclassified from Accumulated other comprehensive net (loss) income into Net earnings | Gains (losses) reclassified from Accumulated other comprehensive net (loss) income and recognized in Net earnings | |||||||||||||||||||||||||
| Three months ended | Six months ended | |||||||||||||||||||||||||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |||||||||||||||||||||||
| Commodity purchase derivative contracts | Cost of products sold | $ | — | $ | (2) | $ | 2 | $ | (3) | |||||||||||||||||
| Foreign exchange derivative contracts | Cost of products sold | 1 | — | — | — | |||||||||||||||||||||
| Interest rate derivative contracts | Interest expense | 3 | 3 | 6 | 6 | |||||||||||||||||||||
| Total | $ | 4 | $ | 1 | $ | 8 | $ | 3 |
The estimated amount of the existing net gain (loss) in Accumulated other comprehensive net (loss) income as of December 31, 2025 that is expected to be reclassified into Net earnings within the next twelve months is $12.
Counterparty Risk Management and Derivative Contract Requirements
The Company utilizes a variety of financial institutions as counterparties for over-the-counter derivative instruments. The Company enters into agreements governing the use of over-the-counter derivative instruments and sets internal limits on the aggregate over-the-counter derivative instrument positions held with each counterparty. Certain terms of these agreements require the Company or the counterparty to post collateral when the fair value of the derivative instruments exceeds contractually defined counterparty liability position limits. Of the over-the-counter derivative instruments in liability positions, $1 and $2 contained such terms as of December 31, 2025 and June 30, 2025, respectively. As of both December 31, 2025 and June 30, 2025, neither the Company nor any counterparty was required to post any collateral as no counterparty liability position limits were exceeded.
Certain terms of the agreements governing the Company’s over-the-counter derivative instruments require the Company’s credit ratings, as assigned by Standard & Poor’s and Moody’s to the Company and its counterparties, to remain at a level equal to or better than the minimum of an investment grade credit rating. If the Company’s credit ratings were to fall below investment grade, the counterparties to the derivative instruments could request full collateralization on derivative instruments in net liability positions. As of both December 31, 2025 and June 30, 2025, the Company and each of its counterparties had been assigned investment grade ratings by both Standard & Poor’s and Moody’s.
Certain of the Company’s exchange traded futures and options contracts used for commodity price risk management include requirements for the Company to post collateral in the form of a cash margin account held by the Company’s broker for trades conducted on that exchange. As of both December 31, 2025 and June 30, 2025, the Company maintained cash margin balances related to exchange traded futures and options contracts of $1 and $2, respectively, which are classified as Prepaid expenses and other current assets on the condensed consolidated balance sheets.
NOTE 6. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)
Trust Assets
The Company holds interests in mutual funds and cash equivalents as part of trust assets related to its nonqualified deferred compensation plans. The participants in the nonqualified deferred compensation plans, who are the Company’s current and former employees, may select among certain mutual funds in which their compensation deferrals are invested in accordance with the terms of the plans and within the confines of the trusts, which hold the marketable securities. The trusts represent variable interest entities for which the Company is considered the primary beneficiary, and therefore trust assets are consolidated and included in Other assets in the condensed consolidated balance sheets. The gains and losses on the trust assets are recorded in Other (income) expense, net in the condensed consolidated statements of earnings and comprehensive income. The interests in mutual funds are measured at fair value using quoted market prices. The Company has designated these marketable securities as trading investments.
Fair Value of Financial Instruments
Financial assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets are required to be classified and disclosed in one of the following three categories of the fair value hierarchy:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions.
As of both December 31, 2025 and June 30, 2025, the Company’s financial assets and liabilities that were measured at fair value on a recurring basis during the period included derivative financial instruments, which were classified as either Level 1 or Level 2, and trust assets to fund the Company’s nonqualified deferred compensation plans, which were classified as Level 1.
All of the Company’s derivative instruments qualify for hedge accounting. The following table provides information about the balance sheet classification and the fair values of the Company’s derivative instruments:
| 12/31/2025 | 6/30/2025 | ||||||||||||||||||||||||||||||||||
| Balance sheet classification | Fair value hierarchy level | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
| Commodity purchase futures contracts | Prepaid expenses and other current assets | 1 | $ | — | $ | — | $ | 3 | $ | 3 | |||||||||||||||||||||||||
| Commodity purchase futures contracts | Other assets | 1 | — | — | 1 | 1 | |||||||||||||||||||||||||||||
| $ | — | $ | — | $ | 4 | $ | 4 | ||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||
| Commodity purchase swaps contracts | Accounts payable and accrued liabilities | 2 | $ | — | $ | — | $ | 1 | $ | 1 | |||||||||||||||||||||||||
| Foreign exchange forward contracts | Accounts payable and accrued liabilities | 2 | 1 | 1 | 1 | 1 | |||||||||||||||||||||||||||||
| $ | 1 | $ | 1 | $ | 2 | $ | 2 |
NOTE 6. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)
The following table provides information about the balance sheet classification and the fair values of the Company’s other assets and liabilities for which disclosure of fair value is required:
| 12/31/2025 | 6/30/2025 | ||||||||||||||||||||||||||||||||||
| Balance sheet classification | Fair value hierarchy level | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
| Interest-bearing investments, including money market funds | Cash and cash equivalents (1) | 1 | $ | 103 | $ | 103 | $ | 54 | $ | 54 | |||||||||||||||||||||||||
| Time deposits | Cash and cash equivalents (1) | 2 | 20 | 20 | 10 | 10 | |||||||||||||||||||||||||||||
| Trust assets for nonqualified deferred compensation plans | Other assets | 1 | 188 | 188 | 169 | 169 | |||||||||||||||||||||||||||||
| $ | 311 | $ | 311 | $ | 233 | $ | 233 | ||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||
| Notes and loans payable | Notes and loans payable (2) | 2 | $ | 307 | $ | 307 | $ | 4 | $ | 4 | |||||||||||||||||||||||||
| Long-term debt | Long-term debt (3) | 2 | 2,486 | 2,459 | 2,484 | 2,431 | |||||||||||||||||||||||||||||
| $ | 2,793 | $ | 2,766 | $ | 2,488 | $ | 2,435 |
(1)Cash and cash equivalents are composed of time deposits and other interest-bearing investments, including money market funds with original maturity dates of 90 days or less. Cash and cash equivalents are recorded at cost, which approximates fair value.
(2)Notes and loans payable are composed of outstanding U.S. commercial paper balances and/or amounts drawn on the Company’s credit agreements, all of which are recorded at cost, which approximates fair value. The weighted average effective interest rate on U.S. commercial paper balances as of December 31, 2025 and June 30, 2025 was 4.02% and 4.61%, respectively.
(3)Long-term debt is recorded at cost. The fair value of Long-term debt was determined using secondary market prices quoted by corporate bond dealers, and is classified as Level 2.
NOTE 7. INCOME TAXES
In determining its quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter. The effective tax rate on earnings was 25.1% and 24.5% for the three and six months ended December 31, 2025, respectively and 18.1% and 28.2% for the three and six months ended December 31, 2024, respectively. The lower tax rate in the prior three month period as compared to the current period was primarily driven by an international legal entity reorganization and favorable stock-based compensation deductions both in the prior period. The higher tax rate in the prior six month period as compared to the current period was primarily driven by the nondeductibility of the loss on the divestiture of the Better Health VMS business, partially offset by an international legal entity reorganization and favorable stock-based compensation deductions all in the prior period.
The One Big Beautiful Bill Act (OBBBA) was enacted in the United States on July 4, 2025. This legislation includes provisions that allow accelerated tax deductions for acquisitions of qualified property and for research expenses. It also modifies the U.S. taxation of certain earnings associated with international business. The Company assessed the provisions of the OBBBA and determined the corporate tax changes did not have a material impact on the effective tax rate in future periods. The OBBBA’s provisions for accelerated tax deductions will change the timing of cash tax payments in the current fiscal year and future periods.
NOTE 8. NET EARNINGS PER SHARE (EPS)
The following is the reconciliation of the weighted average number of shares outstanding (in thousands) used to calculate basic net EPS to those used to calculate diluted net EPS:
| Three months ended | Six months ended | ||||||||||||||||||||||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | ||||||||||||||||||||
| Basic | 121,602 | 123,766 | 122,116 | 123,781 | |||||||||||||||||||
| Dilutive effect of stock options and other | 313 | 896 | 350 | 888 | |||||||||||||||||||
| Diluted | 121,915 | 124,662 | 122,466 | 124,669 | |||||||||||||||||||
| Antidilutive stock options and other | 3,421 | 841 | 3,421 | 841 |
Basic net earnings per share and Diluted net earnings per share are calculated on Net earnings attributable to Clorox.
NOTE 9. OTHER (INCOME) EXPENSE, NET
The major components of Other (income) expense, net were:
| Three months ended | Six months ended | ||||||||||||||||||||||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | ||||||||||||||||||||
| Amortization of trademarks and other intangible assets | $ | 5 | $ | 5 | $ | 10 | $ | 11 | |||||||||||||||
| Trust investment (gains) losses, net | (3) | 1 | (12) | (8) | |||||||||||||||||||
| Net periodic benefit (credit) cost | — | (4) | 1 | (3) | |||||||||||||||||||
| Foreign exchange transaction losses, net | — | 2 | 1 | 3 | |||||||||||||||||||
| Income from equity investees | (1) | (1) | (2) | (3) | |||||||||||||||||||
| Interest income | (1) | (2) | (3) | (5) | |||||||||||||||||||
| Cyberattack insurance recoveries (1) | — | (23) | — | (32) | |||||||||||||||||||
| Other | 1 | (1) | 1 | (8) | |||||||||||||||||||
| Total | $ | 1 | $ | (23) | $ | (4) | $ | (45) |
(1)On August 14, 2023, the Company experienced a cyberattack which resulted in wide-scale disruptions to the Company’s business operations. In the three and six months ended December 31, 2024, the Company recorded insurance recoveries of $(25) and $(35) respectively, of which $(2) and $(3) respectively was recorded in Cost of products sold and the remainder was recorded in Other (income) expense, net. Business interruption and other insurance recoveries that do not correspond directly to previously incurred expenses are recognized in Other (income) expense, net. Refer to notes to consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025 for further information related to the August 2023 Cyberattack.
NOTE 10. STOCKHOLDERS’ EQUITY
Changes in the components of Stockholders’ equity were as follows for the periods indicated:
| Three months ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions except per share data; shares in thousands) | Common stock | Additional paid-in capital | Retained earnings | Treasury stock | Accumulated other comprehensive net (loss) income | Noncontrolling interests | Total stockholders’ equity | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | Shares | Amount | Shares | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2024 | $ | 131 | 130,741 | $ | 1,297 | $ | 31 | $ | (1,252) | (7,068) | $ | (147) | $ | 164 | $ | 224 | |||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | 193 | — | — | — | 1 | 194 | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income | — | — | — | — | — | — | (34) | — | (34) | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends to Clorox stockholders ($1.22 per share declared) | — | — | — | (152) | — | — | — | — | (152) | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends to noncontrolling interests | — | — | — | — | — | — | — | (3) | (3) | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 27 | — | — | — | — | — | 27 | ||||||||||||||||||||||||||||||||||||||||||||
| Other employee stock plan activities | — | — | (37) | (4) | 56 | 383 | — | — | 15 | ||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock purchased | — | — | — | — | (150) | (906) | — | — | (150) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | 131 | 130,741 | $ | 1,287 | $ | 68 | $ | (1,346) | (7,591) | $ | (181) | $ | 162 | $ | 121 | |||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | 131 | 130,741 | $ | 1,326 | $ | 200 | $ | (1,514) | (8,966) | $ | (165) | $ | 160 | $ | 138 | |||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | 157 | — | — | — | 4 | 161 | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income | — | — | — | — | — | — | 6 | — | 6 | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends to Clorox stockholders ($1.24 per share declared) | — | — | — | (150) | — | — | — | — | (150) | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends to noncontrolling interests | — | — | — | — | — | — | — | (4) | (4) | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 24 | — | — | — | — | — | 24 | ||||||||||||||||||||||||||||||||||||||||||||
| Other employee stock plan activities | — | — | (46) | (17) | 52 | 224 | — | — | (11) | ||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock purchased | — | — | — | — | (129) | (1,109) | — | — | (129) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | 131 | 130,741 | $ | 1,304 | $ | 190 | $ | (1,591) | (9,851) | $ | (159) | $ | 160 | $ | 35 | |||||||||||||||||||||||||||||||||||||
| Six months ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions except per share data; shares in thousands) | Common stock | Additional paid-in capital | Retained earnings | Treasury stock | Accumulated other comprehensive net (loss) income | Noncontrolling interests | Total stockholders’ equity | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | Shares | Amount | Shares | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2024 | $ | 131 | 130,741 | $ | 1,288 | $ | 250 | $ | (1,186) | (6,540) | $ | (155) | $ | 164 | $ | 492 | |||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | 292 | — | — | — | 5 | 297 | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income | — | — | — | — | — | — | (26) | — | (26) | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends to Clorox stockholders ($3.66 per share declared) | — | — | — | (457) | — | — | — | — | (457) | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends to noncontrolling interests | — | — | — | — | — | — | — | (7) | (7) | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 40 | — | — | — | — | — | 40 | ||||||||||||||||||||||||||||||||||||||||||||
| Other employee stock plan activities | — | — | (41) | (17) | 97 | 644 | — | — | 39 | ||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock purchased | — | — | — | — | (257) | (1,695) | — | — | (257) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | 131 | 130,741 | $ | 1,287 | $ | 68 | $ | (1,346) | (7,591) | $ | (181) | $ | 162 | $ | 121 | |||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | 131 | 130,741 | $ | 1,319 | $ | 432 | $ | (1,404) | (8,047) | $ | (157) | $ | 161 | $ | 482 | |||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | 237 | — | — | — | 6 | 243 | ||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income | — | — | — | — | — | — | (2) | — | (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends to Clorox stockholders ($3.72 per share declared) | — | — | — | (456) | — | — | — | — | (456) | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends to noncontrolling interests | — | — | — | — | — | — | — | (7) | (7) | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 34 | — | — | — | — | — | 34 | ||||||||||||||||||||||||||||||||||||||||||||
| Other employee stock plan activities | — | — | (49) | (23) | 71 | 353 | — | — | (1) | ||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock purchased | — | — | — | — | (258) | (2,157) | — | — | (258) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | 131 | 130,741 | $ | 1,304 | $ | 190 | $ | (1,591) | (9,851) | $ | (159) | $ | 160 | $ | 35 |
NOTE 10. STOCKHOLDERS’ EQUITY (Continued)
Changes in Accumulated other comprehensive net (loss) income attributable to Clorox by component were as follows for the periods indicated:
| Three months ended December 31 | |||||||||||||||||||||||
| Foreign currency translation adjustments | Net unrealized gains (losses) on derivatives | Pension and postretirement benefit adjustments | Accumulated other comprehensive net (loss) income | ||||||||||||||||||||
| Balance as of September 30, 2024 | $ | (225) | $ | 79 | $ | (1) | $ | (147) | |||||||||||||||
| Other comprehensive (loss) income before reclassifications | (34) | 3 | — | (31) | |||||||||||||||||||
| Amounts reclassified from Accumulated other comprehensive net (loss) income | — | (1) | (1) | (2) | |||||||||||||||||||
| Income tax benefit (expense) | — | (1) | — | (1) | |||||||||||||||||||
| Net current period other comprehensive (loss) income | (34) | 1 | (1) | (34) | |||||||||||||||||||
| Balance as of December 31, 2024 | $ | (259) | $ | 80 | $ | (2) | $ | (181) | |||||||||||||||
| Balance as of September 30, 2025 | $ | (237) | $ | 73 | $ | (1) | $ | (165) | |||||||||||||||
| Other comprehensive (loss) income before reclassifications | 10 | (1) | — | 9 | |||||||||||||||||||
| Amounts reclassified from Accumulated other comprehensive net (loss) income | — | (4) | (1) | (5) | |||||||||||||||||||
| Income tax benefit (expense) | 1 | 1 | — | 2 | |||||||||||||||||||
| Net current period other comprehensive (loss) income | 11 | (4) | (1) | 6 | |||||||||||||||||||
| Balance as of December 31, 2025 | $ | (226) | $ | 69 | $ | (2) | $ | (159) | |||||||||||||||
| Six months ended December 31 | |||||||||||||||||||||||
| Foreign currency translation adjustments | Net unrealized gains (losses) on derivatives | Pension and postretirement benefit adjustments | Accumulated other comprehensive net (loss) income | ||||||||||||||||||||
| Balance as of June 30, 2024 | $ | (239) | $ | 85 | $ | (1) | $ | (155) | |||||||||||||||
| Other comprehensive (loss) income before reclassifications | (20) | (1) | — | (21) | |||||||||||||||||||
| Amounts reclassified from Accumulated other comprehensive net (loss) income | — | (3) | (1) | (4) | |||||||||||||||||||
| Income tax benefit (expense) | — | (1) | — | (1) | |||||||||||||||||||
| Net current period other comprehensive (loss) income | (20) | (5) | (1) | (26) | |||||||||||||||||||
| Balance as of December 31, 2024 | $ | (259) | $ | 80 | $ | (2) | $ | (181) | |||||||||||||||
| Balance as of June 30, 2025 | $ | (233) | $ | 77 | $ | (1) | $ | (157) | |||||||||||||||
| Other comprehensive (loss) income before reclassifications | 6 | (1) | — | 5 | |||||||||||||||||||
| Amounts reclassified from Accumulated other comprehensive net (loss) income | — | (8) | (1) | (9) | |||||||||||||||||||
| Income tax benefit (expense) | 1 | 1 | — | 2 | |||||||||||||||||||
| Net current period other comprehensive (loss) income | 7 | (8) | (1) | (2) | |||||||||||||||||||
| Balance as of December 31, 2025 | $ | (226) | $ | 69 | $ | (2) | $ | (159) |
NOTE 11. OTHER CONTINGENCIES AND GUARANTEES
Contingencies
The Company is involved in certain environmental matters, including response actions at various locations. The Company recorded liabilities totaling $27 as of both December 31, 2025 and June 30, 2025 for its share of aggregate future remediation costs related to these matters.
One matter, which accounted for $12 of the recorded liability as of both December 31, 2025 and June 30, 2025, relates to environmental costs associated with one of the Company’s former operations at a site located in Alameda County, California. In November 2016, at the request of regulators and with the assistance of environmental consultants, the Company submitted a Feasibility Study that evaluated various options for managing groundwater at the site and included estimates of the related costs. Following further discussions with the regulators in 2017, the Company recorded an undiscounted liability for costs estimated to be incurred over a 30-year period, based on one of the options in the Feasibility Study related to groundwater. In September 2021, as a result of an additional study and further discussions with regulators, the Company submitted a Soil Vapor Intrusion Report to the regulators. In January 2023, the regulators issued a new order directing the Company and the current property owner to conduct a Remedial Investigation and then prepare a Feasibility Study to evaluate and remediate impacts to soil, groundwater, soil vapor and indoor air. While the Company believes its latest estimates of remediation costs (including any related to soil, groundwater, soil vapor and indoor air impacts) are reasonable, the ultimate remediation requirements are not yet finalized and the regulators could require the Company to implement remediation actions for a longer period or take additional actions, which could include estimated undiscounted costs in the aggregate of up to approximately $28 over an estimated 30-year period, or require the Company to take different actions and incur additional costs.
Another matter in Dickinson County, Michigan, at the site of one of the Company’s former operations for which the Company is jointly and severally liable, accounted for $10 of the recorded liability as of both December 31, 2025 and June 30, 2025. This amount reflects the Company’s agreement to be liable for 24.3% of the aggregate remediation and associated costs for this matter pursuant to a cost-sharing agreement with a third party. If the third party is unable to pay its share of the response and remediation obligations, the Company may be responsible for such obligations. With the assistance of environmental consultants, the Company maintains an undiscounted liability representing its current best estimate of its share of the capital expenditures, maintenance and other costs that may be incurred over an estimated 30-year remediation period. Although it is reasonably possible that the Company’s exposure may exceed the amount recorded for the Dickinson County matter, any amount of such additional exposures, or range of exposures, is not estimable at this time.
The Company’s estimated losses related to these matters are sensitive to a variety of uncertain factors, including the efficacy of any remediation efforts, changes in any remediation requirements and the future availability of alternative clean-up technologies. From time to time, the Company is subject to various legal proceedings, claims and other loss contingencies, including, without limitation, loss contingencies relating to contractual arrangements (including costs connected to the transition and unwinding of certain supply and manufacturing relationships), product liability, patents and trademarks, advertising, labor and employment, environmental, health and safety and other matters. With respect to these proceedings, claims and other loss contingencies, while considerable uncertainty exists, in the opinion of management at this time, the ultimate disposition of these matters, to the extent not previously provided for, will not have a material adverse effect, either individually or in the aggregate, on the Company’s condensed consolidated financial statements taken as a whole.
Guarantees
In conjunction with divestitures and other transactions, the Company has provided certain indemnifications (e.g., indemnifications for representations and warranties and retention of previously existing environmental, tax and employee liabilities) that have terms that vary in duration and in the potential amount of the total obligation and, in many circumstances, are not explicitly defined. The Company has not made, nor does it believe that it is probable that it will make, any material payments relating to its indemnifications and believes that any reasonably possible payments would not have a material adverse effect, either individually or in the aggregate, on the Company’s condensed consolidated financial statements taken as a whole.
The Company had not recorded any material liabilities on the aforementioned guarantees as of both December 31, 2025 and June 30, 2025.
The Company was a party to letters of credit of $18 as of December 31, 2025, primarily related to its insurance carriers, of which $0 had been drawn upon.
NOTE 12. SEGMENT RESULTS
The Company operates through strategic business units (SBUs) which are organized into operating segments. Operating segments are then aggregated into four reportable segments: Health and Wellness, Household, Lifestyle and International. Operating segments not aggregated into a reportable segment are reflected in Corporate and Other.
Corporate and Other includes certain non-allocated administrative and other costs and various other non-operating income and expenses, as well as the results of the Better Health VMS business through the date of divestiture. Assets in Corporate and Other include cash and cash equivalents, prepaid expenses and other current assets, property and equipment, operating lease right-of-use assets, other long-term assets and deferred taxes. Corporate and Other includes the results and the Better Health VMS business, through the date of divestiture.
The principal measure of segment profitability used by the Chief Operating Decision Maker (CODM), identified as the Company's Chair and Chief Executive Officer, is segment adjusted earnings (losses) before interest and income taxes (segment adjusted EBIT). Segment adjusted EBIT is defined as earnings (losses) before income taxes excluding interest income, interest expense and other significant items that are nonrecurring or unusual (such as the pension settlement charge, incremental charges and insurance recoveries related to the August 2023 cyberattack, asset impairments, charges related to the digital capabilities and productivity enhancements investment, transaction and integration costs related to acquisitions, significant losses related to divestitures and other nonrecurring or unusual items impacting comparability).
The CODM uses this measure to assess the operating results and performance of its segments, monitor actual results as compared to plan, perform analytical comparisons, identify strategies to improve performance and allocate resources to each segment as it removes the impact of the items that management believes do not directly reflect the performance of each segment’s underlying operations.
Net sales by segment and a reconciliation to the Company’s consolidated net sales for the three and six months ended December 31:
| Net sales | ||||||||||||||||||||||||||
| Three months ended | Six months ended | |||||||||||||||||||||||||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | |||||||||||||||||||||||
| Health and Wellness | $ | 643 | $ | 628 | $ | 1,208 | $ | 1,326 | ||||||||||||||||||
| Household | 419 | 446 | 781 | 893 | ||||||||||||||||||||||
| Lifestyle | 321 | 338 | 566 | 658 | ||||||||||||||||||||||
| International | 294 | 274 | 547 | 533 | ||||||||||||||||||||||
| Reportable segment total | $ | 1,677 | $ | 1,686 | $ | 3,102 | $ | 3,410 | ||||||||||||||||||
| Corporate and Other | (4) | — | — | 38 | ||||||||||||||||||||||
| Total | $ | 1,673 | $ | 1,686 | $ | 3,102 | $ | 3,448 | ||||||||||||||||||
All intersegment sales are eliminated and are not included in the Company’s reportable segments’ net sales.
NOTE 12. SEGMENT RESULTS (Continued)
Segment adjusted EBIT, including the significant segment expense provided to the CODM, and a reconciliation to earnings before income taxes for the three and six months ended December 31:
| Segment adjusted earnings (losses) before interest and income taxes | |||||||||||||||||||||||||||||
| Three months ended December 31, 2025 | |||||||||||||||||||||||||||||
| Health and Wellness | Household | Lifestyle | International | Total | |||||||||||||||||||||||||
| Net sales | $ | 643 | $ | 419 | $ | 321 | $ | 294 | |||||||||||||||||||||
| Cost of products sold | 309 | 296 | 158 | 188 | |||||||||||||||||||||||||
| Other segment items (1) | 144 | 101 | 91 | 75 | |||||||||||||||||||||||||
| Segment adjusted EBIT | $ | 190 | $ | 22 | $ | 72 | $ | 31 | $ | 315 | |||||||||||||||||||
| Corporate and Other | (59) | ||||||||||||||||||||||||||||
| Interest income | 1 | ||||||||||||||||||||||||||||
| Interest expense | (25) | ||||||||||||||||||||||||||||
| Digital capabilities and productivity enhancements investment (2) | (17) | ||||||||||||||||||||||||||||
| Earnings before income taxes | $ | 215 |
| Segment adjusted earnings (losses) before interest and income taxes | |||||||||||||||||||||||||||||
| Six months ended December 31, 2025 | |||||||||||||||||||||||||||||
| Health and Wellness | Household | Lifestyle | International | Total | |||||||||||||||||||||||||
| Net sales | $ | 1,208 | $ | 781 | $ | 566 | $ | 547 | |||||||||||||||||||||
| Cost of products sold | 600 | 542 | 284 | 353 | |||||||||||||||||||||||||
| Other segment items (1) | 294 | 190 | 172 | 144 | |||||||||||||||||||||||||
| Segment adjusted EBIT | $ | 314 | $ | 49 | $ | 110 | $ | 50 | $ | 523 | |||||||||||||||||||
| Corporate and Other | (107) | ||||||||||||||||||||||||||||
| Interest income | 3 | ||||||||||||||||||||||||||||
| Interest expense | (48) | ||||||||||||||||||||||||||||
| Digital capabilities and productivity enhancements investment (2) | (49) | ||||||||||||||||||||||||||||
| Earnings before income taxes | $ | 322 |
(1)Other segment items includes selling and administrative expenses, advertising costs, research and development costs and other income and expenses. The items defined in segment adjusted EBIT above are excluded from other segment items and Corporate and Other.
(2)Represents expenses related to the Company’s digital capabilities and productivity enhancements investment corresponding to Corporate and Other.
NOTE 12. SEGMENT RESULTS (Continued)
| Segment adjusted earnings (losses) before interest and income taxes | |||||||||||||||||||||||||||||
| Three months ended December 31, 2024 | |||||||||||||||||||||||||||||
| Health and Wellness | Household | Lifestyle | International | Total | |||||||||||||||||||||||||
| Net sales | $ | 628 | $ | 446 | $ | 338 | $ | 274 | |||||||||||||||||||||
| Cost of products sold | 301 | 300 | 168 | 175 | |||||||||||||||||||||||||
| Other segment items (1) | 134 | 98 | 100 | 78 | |||||||||||||||||||||||||
| Segment adjusted EBIT | $ | 193 | $ | 48 | $ | 70 | $ | 21 | $ | 332 | |||||||||||||||||||
| Corporate and Other | (74) | ||||||||||||||||||||||||||||
| Interest income | 2 | ||||||||||||||||||||||||||||
| Interest expense | (22) | ||||||||||||||||||||||||||||
| Loss on divestiture (2) | — | ||||||||||||||||||||||||||||
| Cyberattack costs, net of insurance recoveries (3) | 25 | ||||||||||||||||||||||||||||
| Digital capabilities and productivity enhancements investment (4) | (26) | ||||||||||||||||||||||||||||
| Earnings before income taxes | $ | 237 |
| Segment adjusted earnings (losses) before interest and income taxes | |||||||||||||||||||||||||||||
| Six months ended December 31, 2024 | |||||||||||||||||||||||||||||
| Health and Wellness | Household | Lifestyle | International | Total | |||||||||||||||||||||||||
| Net sales | $ | 1,326 | $ | 893 | $ | 658 | $ | 533 | |||||||||||||||||||||
| Cost of products sold | 623 | 589 | 325 | 333 | |||||||||||||||||||||||||
| Other segment items (1) | 275 | 196 | 197 | 144 | |||||||||||||||||||||||||
| Segment adjusted EBIT | $ | 428 | $ | 108 | $ | 136 | $ | 56 | $ | 728 | |||||||||||||||||||
| Corporate and Other | (138) | ||||||||||||||||||||||||||||
| Interest income | 5 | ||||||||||||||||||||||||||||
| Interest expense | (43) | ||||||||||||||||||||||||||||
| Loss on divestiture (2) | (118) | ||||||||||||||||||||||||||||
| Cyberattack costs, net of insurance recoveries (3) | 35 | ||||||||||||||||||||||||||||
| Digital capabilities and productivity enhancements investment (4) | (55) | ||||||||||||||||||||||||||||
| Earnings before income taxes | $ | 414 |
(1)Other segment items includes selling and administrative expenses, advertising costs, research and development costs and other income and expenses. The items defined in segment adjusted EBIT above are excluded from other segment items and Corporate and Other.
(2)Represents the loss on divestiture of the Better Health VMS business corresponding to Corporate and Other. See Note 3 for additional details related to the divestiture.
(3)Represents insurance recoveries related to the cyberattack corresponding to Corporate and Other. See Note 9 for further discussion.
(4)Represents expenses related to the Company’s digital capabilities and productivity enhancements investment corresponding to Corporate and Other.
NOTE 12. SEGMENT RESULTS (Continued)
Certain other segment disclosures were as follows:
| Health and Wellness | Household | Lifestyle | International | Corporate and Other | Total Company | |||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||
| Balance as of 12/31/2025 | $ | 1,224 | $ | 1,079 | $ | 1,106 | $ | 1,329 | $ | 875 | $ | 5,613 | ||||||||||||||
| Balance as of 6/30/2025 | 1,217 | 1,091 | 1,103 | 1,329 | 821 | 5,561 | ||||||||||||||||||||
| (Income) Loss from equity investees included in Other (income) expense, net | ||||||||||||||||||||||||||
| Three months ended 12/31/2025 | — | — | — | (1) | — | (1) | ||||||||||||||||||||
| Three months ended 12/31/2024 | — | — | — | (1) | — | (1) | ||||||||||||||||||||
| Six months ended 12/31/2025 | — | — | — | (2) | — | (2) | ||||||||||||||||||||
| Six months ended 12/31/2024 | — | — | — | (3) | — | (3) | ||||||||||||||||||||
| Capital expenditures | ||||||||||||||||||||||||||
| Three months ended 12/31/2025 | 16 | 15 | 5 | 5 | 1 | 42 | ||||||||||||||||||||
| Three months ended 12/31/2024 | 14 | 21 | 12 | 4 | 2 | 53 | ||||||||||||||||||||
| Six months ended 12/31/2025 | 23 | 32 | 12 | 8 | 3 | 78 | ||||||||||||||||||||
| Six months ended 12/31/2024 | 23 | 39 | 19 | 6 | 5 | 92 | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
| Three months ended 12/31/2025 | 15 | 20 | 7 | 11 | 2 | 55 | ||||||||||||||||||||
| Three months ended 12/31/2024 | 14 | 19 | 5 | 11 | 4 | 53 | ||||||||||||||||||||
| Six months ended 12/31/2025 | 29 | 41 | 14 | 21 | 6 | 111 | ||||||||||||||||||||
| Six months ended 12/31/2024 | 28 | 38 | 11 | 21 | 9 | 107 | ||||||||||||||||||||
| Significant noncash charges included in earnings before interest and income taxes: | ||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||
| Three months ended 12/31/2025 | 4 | 3 | 2 | 2 | 13 | 24 | ||||||||||||||||||||
| Three months ended 12/31/2024 | 4 | 3 | 2 | 1 | 17 | 27 | ||||||||||||||||||||
| Six months ended 12/31/2025 | 8 | 6 | 4 | 3 | 13 | 34 | ||||||||||||||||||||
| Six months ended 12/31/2024 | 8 | 6 | 4 | 3 | 19 | 40 |
NOTE 12. SEGMENT RESULTS (Continued)
Net sales to the Company’s largest customer, Walmart Inc. and its affiliates, as a percentage of consolidated net sales, was 26% for both the three and six months ended December 31, 2025 and 2024, respectively.
The following table provides Net sales as a percentage of the Company’s consolidated net sales, disaggregated by operating segment, for the periods indicated:
| Net sales | |||||||||||||||||||||||
| Three months ended | Six months ended | ||||||||||||||||||||||
| 12/31/2025 | 12/31/2024 | 12/31/2025 | 12/31/2024 | ||||||||||||||||||||
| Cleaning | 33 | % | 32 | % | 34 | % | 33 | % | |||||||||||||||
| Professional Products | 5 | 5 | 5 | 5 | |||||||||||||||||||
| Health and Wellness | 38 | % | 37 | % | 39 | % | 38 | % | |||||||||||||||
| Bags and Wraps | 12 | 12 | 12 | 12 | |||||||||||||||||||
| Cat Litter | 9 | 10 | 9 | 9 | |||||||||||||||||||
| Grilling | 4 | 5 | 4 | 5 | |||||||||||||||||||
| Household | 25 | % | 27 | % | 25 | % | 26 | % | |||||||||||||||
| Food | 10 | 11 | 10 | 11 | |||||||||||||||||||
| Water Filtration | 4 | 4 | 4 | 4 | |||||||||||||||||||
| Natural Personal Care | 5 | 5 | 4 | 4 | |||||||||||||||||||
| Lifestyle | 19 | % | 20 | % | 18 | % | 19 | % | |||||||||||||||
| International | 18 | % | 16 | % | 18 | % | 16 | % | |||||||||||||||
| Corporate and Other | — | % | — | % | — | % | 1 | % | |||||||||||||||
| Total Company | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
NOTE 13. SUBSEQUENT EVENTS
On January 22, 2026, the Company announced that it has entered into a definitive membership interest purchase agreement to acquire GOJO Industries (GOJO), a leader of skin health and hygiene solutions, for approximately $2,250 in cash. The Company plans to fund the transaction primarily through debt financing. The transaction is expected to be completed before the end of fiscal year 2026, subject to regulatory approval and other customary closing conditions.
Previous: Cover and table of contents · Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations