NYSE:CLX
CLOROX CO /DE/
A leading specialty chemicals manufacturer offering industrial ingredients and consumer bleach products with robust cash flow generation.
Key Metrics
Investment Thesis
Bull Case
CLX presents an attractive value opportunity with a dramatic earnings rebound in 2025 that suggests improved margin expansion and pricing power. The combination of steady industrial demand cycles and resilient consumer brand loyalty creates a dual-engine revenue model supported by strong free cash flow for consistent dividend growth and buybacks.
Bear Case
Despite recent profitability improvements, the company faces ongoing pressure from input cost inflation which could compress margins if not passed to customers. High levels of long-term debt relative to equity may constrain financial flexibility during periods of economic stress or rising interest rates, while reliance on specific regulatory approvals introduces execution risk.
About CLOROX CO /DE/
CLX operates as a diversified specialty chemicals and consumer goods manufacturer, primarily serving industrial markets through its Clariant business unit and the North American market with its iconic Bleach brand. The company leverages its scale to produce essential materials like surfactants, water treatment chemicals, and disinfectants while maintaining a strong presence in household cleaning products.
Analysis
Management Discussion
The company demonstrated a remarkable turnaround in 2025, with net income surging to $824M from $292M the prior year, driven by operational efficiency gains and volume growth. Cash flow from operations remains robust at $981M, supporting significant capital expenditures of $220M for facility upgrades and share repurchases totaling $332M, while maintaining a healthy cash balance near $170M.
Industry Overview
The specialty chemicals and consumer goods sector is characterized by high fixed costs, strict environmental regulations, and a shift toward sustainable product formulations. Market participants compete on technical innovation for industrial clients while battling price competition in the saturated household cleaning category.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $7.39B | $7.09B | $7.10B |
| Cost of Revenue | $4.48B | $4.04B | $3.89B |
| Gross Profit | $2.91B | $3.05B | $3.21B |
| Operating Expenses | $2.67B | $2.65B | $2.13B |
| Operating Income | $238.0M | $398.0M | $1.08B |
| R&D | $138.0M | $126.0M | $121.0M |
| G&A | $1.18B | $1.17B | $1.12B |
| Stock-Based Comp | $73.0M | $74.0M | $81.0M |
| D&A | $236.0M | $235.0M | $219.0M |
| Amortization | $30.0M | $29.0M | $21.0M |
| Other OpEx | $1.35B | $1.36B | $890.0M |
| Non-Operating Income | $0 | $0 | $0 |
| Interest Expense | $90.0M | $90.0M | $88.0M |
| Pre-Tax Income | $238.0M | $398.0M | $1.08B |
| Income Tax | $77.0M | $106.0M | $254.0M |
| Continuing Ops | $161.0M | $292.0M | $824.0M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $161.0M | $292.0M | $824.0M |
| Minority Interest | $12.0M | $12.0M | $14.0M |
| Net to Common | $149.0M | $280.0M | $810.0M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $1.83B | $1.62B | $1.61B |
| Cash & Equivalents | $367.0M | $202.0M | $167.0M |
| Inventory | $696.0M | $637.0M | $523.0M |
| Prepaid Expenses | $77.0M | $88.0M | $97.0M |
| Other Current Assets | $688.0M | $695.0M | $821.0M |
| Long-Term Assets | $4.12B | $4.13B | $3.95B |
| PP&E (Net) | $1.34B | $1.31B | $1.27B |
| Intangibles | $712.0M | $681.0M | $566.0M |
| Goodwill | $1.25B | $1.23B | $1.23B |
| Operating Leases | $346.0M | $360.0M | $333.0M |
| Other LT Assets | $419.0M | $500.0M | $511.0M |
| Total Assets | $5.95B | $5.75B | $5.56B |
| Current Liabilities | $1.92B | $1.57B | $1.92B |
| Accounts Payable | $1.02B | $950.0M | $838.0M |
| Current Debt | $0 | $0 | $0 |
| Current Leases | $87.0M | $84.0M | $87.0M |
| Taxes Payable | $121.0M | $0 | — |
| Other Current Liab | $665.0M | $515.0M | $967.0M |
| Long-Term Liabilities | $3.64B | $3.69B | $3.16B |
| Long-Term Debt | $2.48B | $2.48B | $2.48B |
| LT Operating Leases | $310.0M | $334.0M | $305.0M |
| Other LT Liab | $803.0M | $866.0M | $367.0M |
| Total Liabilities | $5.56B | $5.26B | $5.08B |
| Shareholders' Equity | $388.0M | $492.0M | $482.0M |
| Retained Earnings | $583.0M | $250.0M | $432.0M |
| AOCI | $-493.0M | $-155.0M | $-157.0M |
| Total L&E | $5.95B | $5.75B | $5.56B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $161.0M | $292.0M | $824.0M |
| Non-Cash Adjustments | $732.0M | $736.0M | $188.0M |
| Working Capital Changes | $265.0M | $-333.0M | $-31.0M |
| Cash from Operations | $1.16B | $695.0M | $981.0M |
| Capital Expenditures | $228.0M | $212.0M | $220.0M |
| Cash from Investing | $-223.0M | $-175.0M | $-94.0M |
| Debt Issuances | $0 | $0 | — |
| Debt Repayments | $0 | $0 | — |
| Share Buybacks | $0 | $0 | $332.0M |
| Dividends Paid | $583.0M | $595.0M | $602.0M |
| Cash from Financing | $-753.0M | $-655.0M | $-924.0M |
| FX Effect | $0 | $-26.0M | $0 |
| Net Change in Cash | $182.0M | $-161.0M | $-37.0M |
| Beginning Cash | $186.0M | $368.0M | $207.0M |
| Ending Cash | $368.0M | $207.0M | $170.0M |
Frequently Asked Questions
How does CLOROX CO /DE/ make money?
Industrial Solutions (specialty chemicals for water treatment, textiles, and personal care), Consumer Products (primarily the Clorox brand household cleaners including bleach and disinfectants), and Performance Materials (advanced materials for various industrial applications).
What are the main risks for CLX?
Fluctuating raw material costs impacting gross margins given the commodity-heavy nature of chemical production; potential regulatory changes affecting water treatment or consumer disinfectant formulations; exposure to economic downturns that reduce demand for industrial chemicals and discretionary consumer goods; currency exchange rate volatility affecting international operations.
What is CLX's competitive advantage?
Strong brand equity in the consumer sector provides pricing power and customer loyalty, particularly with its bleach franchise; diversified global footprint across both industrial B2B and B2C markets mitigates cyclicality risks; high barriers to entry due to rigorous safety regulations and complex chemical manufacturing processes.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.