Form 8-K - Current report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 1, 2024

THE CLOROX COMPANY
(Exact name of registrant as specified in its charter)
__________________


Delaware	1-07151	31-0595760
(State or other jurisdiction of	(Commission File Number)	(I.R.S. Employer
incorporation)		Identification No.)

1221 Broadway, Oakland, California 94612-1888
(Address of principal executive offices) (Zip code)

(510) 271-7000
(Registrant's telephone number, including area code)

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


[ ]			Written communications pursuant to Rule 425 Under the Securities Act (17 CFR 230.425)

[ ]			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock - $1.00 par value	CLX	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

Emerging growth company ☐

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. ☐

Item 2.02 Results of Operations and Financial Condition

On August 1, 2024, The Clorox Company issued a press release announcing its financial results for its fourth quarter and fiscal year ended June 30, 2024. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure

Attached hereto as Exhibit 99.2 and incorporated herein by reference is supplemental financial information. The Clorox Company additionally announced in the press release that it has entered into a definitive agreement to divest its Better Health Vitamins, Minerals and Supplements business.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

See the Exhibit Index below.

EXHIBIT INDEX


Exhibit						Description
99.1						Press Release dated August 1, 2024 of The Clorox Company
99.2						Supplemental information regarding financial results
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		THE CLOROX COMPANY


Date:	August 1, 2024	By:	/s/ Angela Hilt
			Angela Hilt
			Executive Vice President – Chief Legal Officer


PRESS RELEASE

Clorox Reports Q4 and FY24 Results, Provides FY25 Outlook

Company Announces Sale of its Better Health Vitamins, Minerals and Supplements Business

OAKLAND, California, Aug. 1, 2024 — The Clorox Company (NYSE: CLX) today reported results for the fourth quarter and fiscal year 2024, which ended June 30, 2024. Alongside these results, the company also announced it has entered into a definitive agreement to divest its Better Health Vitamins, Minerals and Supplements (VMS) business in its entirety to Piping Rock Health Products, LLC.

Fourth-Quarter Fiscal Year 2024 Summary

The following is a summary of key fourth-quarter results. All comparisons are with the fourth quarter of fiscal year 2023 unless otherwise stated.

•Net sales decreased 6% to $1.9 billion compared to an increase of 12% in the year-ago quarter. The net sales decrease was driven largely by the impacts of the Argentina divestiture, unfavorable price mix and lower volume. Organic sales1 decreased 3%.

•Gross margin increased 380 basis points to 46.5% from 42.7% in the year-ago quarter primarily due to lower manufacturing and logistics costs, the benefit of cost savings initiatives and favorable commodity costs, partially offset by the impact of higher trade promotion spending.

•Diluted net earnings per share (diluted EPS) increased 22% to $1.73 from $1.42 in the year-ago quarter. This includes insurance recoveries related to the cyberattack, net of incremental costs (17 cents), partially offset by continued investments in the company's long-term strategic digital capabilities and productivity enhancements (14 cents) as well as implementation of the company's streamlined operating model (12 cents).

•Adjusted EPS1 increased 9% to $1.82 from $1.67 in the year-ago quarter, due in part to higher gross margin and lower selling and administrative expenses. These factors were partially offset by lower net sales and higher advertising investments.

"We closed out the fiscal year with strong margin expansion and double-digit adjusted EPS growth despite substantial disruption and consumption loss from the cyberattack. While fully restoring supply and distribution, as well as recovering nearly all of our market share, we remained relentless in driving our IGNITE strategy forward. We made strong progress as we evolved our portfolio to accelerate profitable growth, completed the implementation of our streamlined operating model and advanced our digital transformation. We achieved all of this while continuing to invest strongly behind our brands to provide superior value in a challenging environment where consumers continue to seek value," said Chair and CEO Linda Rendle. "While there is more work to do, we are confident that the actions we have taken, combined with the strength of our portfolio, position us well to deliver strong performance led by a return to volume growth in fiscal year 2025, consistent with our long-term goals."

This press release includes certain non-GAAP financial measures. See "Non-GAAP Financial Information" at the end of this press release for more details.

1 Organic sales growth/(decrease) and adjusted EPS are non-GAAP measures. See Non-GAAP Financial Information at the end of this press release for reconciliations to the most comparable GAAP measures.

Strategic and Operational Highlights

The following are recent highlights of business and environmental, social and governance achievements:

•Fully restored distribution losses and regained the vast majority of lost market share caused by the cyberattack, supported by full supply chain restoration and strong merchandising levels across the portfolio.

•Continued to invest behind value superiority with strong advertising and innovations across major brands in fiscal year 2024, such as Clorox Toilet Bomb Foaming Toilet Bowl Cleaner, Pine-Sol concentrated multi-surface cleaner, Brita Refillable Water Filtration System, seven new Hidden Valley Ranch flavors and new fragrances in the Glad ForceFlex Scented Trash Bag lineup.

•Achieved seventh consecutive quarter of gross margin expansion, supported by another strong quarter of cost savings, and are on track to fully rebuild gross margin in fiscal year 2025.

•Successfully completed implementation of the company’s streamlined operating model, enhancing the ability to respond more quickly to changing consumer behaviors and innovate faster. Through this new model the company expects to deliver ongoing cost savings of approximately $100 million annually.

•Named a Best Company to Work For by U.S. News & World Report, included in America’s Climate Leaders by USA Today, listed as one of America’s Best Employers for Diversity by Forbes, and recognized as one of the Best Companies for Equal Opportunity for Advancement by parity.org.

Key Segment Results

The following is a summary of key fourth-quarter results by reportable segment. All comparisons are with the fourth quarter of fiscal year 2023, unless otherwise stated. Prior periods presented have been recast to reflect the reportable segment changes effective in the fourth quarter of fiscal year 2023.

Health and Wellness (Cleaning; Professional Products)

•Net sales were essentially flat, driven by 2 points of higher volume offset by 2 points of unfavorable price mix.

◦Cleaning sales increased, driven mainly by restored distribution and strong consumption supported by new innovations and increased merchandising.

◦Professional Products sales decreased, driven mainly by lower shipments of Pine-Sol products as distributors transitioned to new Pine-Sol concentrated cleaner.

•Segment adjusted EBIT2 increased 15%, driven by favorable manufacturing and logistics costs and lower selling and administrative expenses, partially offset by higher advertising investments.

Household (Bags and Wraps; Cat Litter; Grilling)

•Net sales decreased 10%, driven by 5 points of lower volume and 5 points of unfavorable price mix.

◦Bags and Wraps sales decreased, driven primarily by distribution recovery occurring late in the quarter, increased competitive activity and higher trade promotion spending.

◦Cat Litter sales decreased, driven mainly by distribution recovery occurring late in the quarter, increased competitive activity and higher trade promotion spending.

◦Grilling sales decreased, driven primarily by lower consumption due to unfavorable seasonal weather which impacted the overall category.

•Segment adjusted EBIT decreased 31%, driven by lower net sales, partially offset by cost savings and favorable manufacturing and logistics costs.

2 Adjusted EBIT is a non-GAAP measure. See Non-GAAP Financial Information at the end of this press release for reconciliations to the most comparable GAAP measures.

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Lifestyle (Food; Water Filtration; Natural Personal Care)

•Net sales decreased 2%, driven by 2 points of unfavorable price mix.

◦Food sales increased, driven mainly by strong consumption supported by new innovations.

◦Water Filtration sales decreased, driven by lower consumption mainly due to a shift in the seasonal timing of back-to-school promotions at certain key retailers as well as higher trade promotion spending.

◦Natural Personal Care sales decreased, driven primarily by increased competitive activity and distribution losses in the non-core portion of the portfolio.

•Segment adjusted EBIT decreased 9%, driven by higher advertising investments and lower net sales, partially offset by favorable commodity costs and cost savings.

International (Sales Outside the U.S.)

•Net sales decreased 11%, mainly driven by the impact of the Argentina divestiture. Excluding Argentina, organic sales1 increased 5%, supported by volume growth and favorable price mix.

•Segment adjusted EBIT increased 20%, primarily due to higher volume and cost savings, partially offset by the net impacts of the Argentina divestiture.

Fiscal Year 2024 Summary

The following is a summary of key fiscal year 2024 results. All comparisons are to fiscal year 2023.

•Net sales decreased 4% (flat organic sales) primarily driven by 6 points of lower volume and 3 points of unfavorable foreign exchange rates, partially offset by 5 points of favorable price mix.

•Gross margin increased 360 basis points to 43.0% from 39.4% in the year-ago period. The increase was primarily driven by the benefits of pricing and cost savings initiatives, which were partially offset by unfavorable foreign exchange rates.

•Diluted EPS increased 88% to $2.25 from $1.20 in the year-ago period. This includes the lapping of a noncash impairment charge in the Vitamins, Minerals and Supplements business from the year-ago period, partially offset by the loss relating to the divestiture of the Argentina business and the noncash pension settlement charge.

•Adjusted EPS increased 21% to $6.17 from $5.09, driven mainly by the benefits of pricing and gross margin expansion. These factors were partially offset by unfavorable foreign exchange rates, lower volume and higher advertising investments.

•Net cash provided by operations was $695 million compared to $1.2 billion in fiscal year 2023, representing a 40% decrease.

Definitive Agreement to Sell the Better Health Vitamins, Minerals and Supplements Business

The company has entered into a definitive agreement to sell its Better Health VMS business in its entirety, including the Natural Vitality, NeoCell, Rainbow Light and RenewLife brands, relevant trademarks and licenses, and the company’s manufacturing and distribution facilities in Sunrise, FL., to Piping Rock Health Products, LLC, headquartered in Bohemia, NY.

“The Better Health VMS business will do well under the leadership of Piping Rock, as they have built a strong pure-play business in a category that is poised for growth,” said Rendle. “This transaction is a deliberate step in our IGNITE strategy and reflects our commitment to evolve our portfolio to drive more consistent, profitable growth.”

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The transaction is expected to close in the first quarter of the company’s current fiscal year, ending Jun. 30, 2025, and is subject to regulatory and other customary closing conditions and approvals. The financial terms of the agreement have not been disclosed.

The Better Health VMS business represents approximately 3% of the company's fiscal year 2024 net sales. As a result of this transaction, the company expects to incur a one-time, after-tax charge of $114 million to $134 million in the first quarter of fiscal year 2025 (or approximately a $1.00 reduction to earnings per share) representing a loss on sale.

The company will discuss the transaction further during today’s fourth quarter and fiscal year 2024 earnings conference call.

Fiscal Year 2025 Outlook

•Net sales are expected to be flat to down 2% compared to the prior year. Organic sales are expected to be up 3% to up 5% excluding about 2 points of negative impact from the divestiture of the company's business in Argentina and about 3 points of negative impact from the expected divestiture of the Better Health VMS business.

•Gross margin is expected to be up about 100 basis points, primarily due to the benefits of holistic margin management efforts, partially offset by cost inflation and higher trade promotional spending.

•Selling and administrative expenses are expected to be between 15% and 16% of net sales, which includes about 150 basis points of impact from the company's strategic investments in digital capabilities and productivity enhancements.

•Advertising and sales promotion spending is expected to be about 11% to 11.5% of net sales, reflecting the company's ongoing commitment to invest behind its brands.

•The company's effective tax rate is expected to be about 28%. Excluding the impact of the Better Health VMS sale, the company expects its fiscal year adjusted effective tax rate to be about 24%.

•Diluted EPS is expected to be between $4.95 and $5.20, or an increase between 120% and 131%.

•Adjusted EPS is expected to be between $6.55 and $6.80, or an increase between 6% and 10%, respectively. Adjusted EPS excludes the long-term strategic investment in digital capabilities and productivity enhancements, estimated to be about 60 cents, and a loss on sale related to the divestiture of the Better Health VMS business in the first quarter, estimated to be about $1.00.

Clorox Earnings Conference Call Schedule

At approximately 4:15 p.m. ET today, Clorox will post prepared management remarks regarding its fourth-quarter and fiscal year 2024 results.

At 5 p.m. ET today, the company will host a live Q&A audio webcast with Chair and CEO Linda Rendle and Chief Financial Officer Kevin Jacobsen to discuss the results.

Links to the live (and archived) webcast, press release and prepared remarks can be found at Clorox Quarterly Results.

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For More Detailed Financial Information

Visit the company’s Quarterly Results for the following:

•Supplemental unaudited volume and sales growth information

•Supplemental unaudited gross margin drivers information

•Supplemental unaudited cash flow information and free cash flow reconciliation

•Supplemental unaudited reconciliation of earnings before interest and taxes (EBIT) and adjusted EBIT

•Supplemental unaudited reconciliation of adjusted earnings per share (EPS) and adjusted effective tax rate (ETR)

Note: Percentage and basis-point, or point, changes noted in this press release are calculated based on rounded numbers, except for per-share data and the effective tax rate.

About The Clorox Company

The Clorox Company (NYSE: CLX) champions people to be well and thrive every single day. Its trusted brands, which include Brita®, Burt's Bees®, Clorox®, Fresh Step®, Glad®, Hidden Valley®, Kingsford®, Liquid-Plumr®, Pine-Sol® and Natural Vitality®, can be found in about nine of 10 U.S. homes and internationally with brands such as Clorinda®, Chux® and Poett®. Headquartered in Oakland, California, since 1913, Clorox was one of the first U.S. companies to integrate ESG into its business reporting. In 2024, the company was ranked No. 1 on Barron's 100 Most Sustainable Companies list for the second consecutive year. Visit thecloroxcompany.com to learn more.

Media Relations

corporate.communications@clorox.com

Investor Relations

investorrelations@clorox.com

CLX-F

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Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, among others, statements regarding the expected or potential impact of the company's operational disruption stemming from a cyberattack, and any such forward-looking statements involve risks, assumptions and uncertainties. Except for historical information, statements about future volumes, sales, organic sales growth, foreign currencies, costs, cost savings, margins, 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," "may," "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," "will," "predicts," and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic 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. Important factors that could affect performance and cause results to differ materially from management's expectations, are described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2023, and in the company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023, and as updated from time to time in the company's Securities and Exchange Commission filings. These factors include, but are not limited to: our recovery from the cyberattack, unfavorable general economic and geopolitical conditions beyond our control, including supply chain disruptions, labor shortages, wage pressures, rising inflation, the interest rate environment, fuel and energy costs, foreign currency exchange rate fluctuations, weather events or natural disasters, disease outbreaks or pandemics, such as COVID-19, terrorism, and unstable geopolitical conditions, including ongoing conflicts in the Middle East and Ukraine and rising tensions between China and Taiwan, as well as macroeconomic and geopolitical volatility and uncertainty as a result of a number of these and other factors, including actual and potential shifts between the U.S. and its trading partners, especially China; volatility and increases in the costs of raw materials, energy, transportation, labor and other necessary supplies or services; the impact of the changing retail environment, including the growth of alternative retail channels and business models, and changing consumer preferences; the ability of the company to drive sales growth, increase prices and market share, grow its product categories and manage favorable product and geographic mix; risks related to supply chain issues, product shortages and disruptions to the business, as a result of increased supply chain dependencies due to an expanded supplier network and a reliance on certain single-source suppliers; intense competition in the company's markets; risks related to the company's use of and reliance on information technology systems, including potential and actual security breaches, cyberattacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, customer, employee or company information, business, service or operational disruptions, or that impact the company's financial results or financial reporting, or any resulting unfavorable outcomes, increased costs or legal proceedings; the ability of the company to implement and generate cost savings and efficiencies, and successfully implement its transformational initiatives or strategies, including achieving anticipated benefits and cost savings from the implementation of the streamlined operating model and digital capabilities and productivity enhancements; dependence on key customers and risks related to customer consolidation and ordering patterns; the company's ability to attract and retain key personnel, which may continue to be impacted by challenges in the labor market, such as wage inflation and sustained labor shortages; the company's ability to maintain its business reputation and the reputation of its brands and products; lower revenue, increased costs or reputational harm resulting from government actions and compliance with regulations, or any material costs imposed by changes in regulation; changes to our processes and procedures as a result of our digital capabilities and productivity enhancements investment that may result in changes to the company's internal controls over financial reporting; the ability of the company to successfully manage global political, legal, tax and regulatory risks, including changes in regulatory or administrative activity; risks related to international operations and international trade, including changing macroeconomic conditions as a result of inflation, volatile commodity prices and increases in raw and packaging materials prices, labor, energy and logistics; global economic or political instability; foreign currency fluctuations, such as devaluations, and foreign currency exchange rate controls; changes in governmental policies, including trade, travel or immigration restrictions, new or additional tariffs, and price or other controls; labor claims and civil unrest; potential operational

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or supply chain disruptions from wars and military conflicts, including ongoing conflicts in the Middle East and Ukraine and rising tensions between China and Taiwan; impact of the United Kingdom's exit from the European Union; potential negative impact and liabilities from the use, storage and transportation of chlorine in certain international markets where chlorine is used in the production of bleach; widespread health emergencies, such as COVID-19; and the possibility of nationalization, expropriation of assets or other government action; the impact of Environmental, Social, and Governance (ESG) issues, including those related to climate change and sustainability on our sales, operating costs or reputation; the ability of the company to innovate and to develop and introduce commercially successful products, or expand into adjacent categories and countries; the impact of product liability claims, labor claims and other legal, governmental or tax proceedings, including in foreign jurisdictions and in connection with any product recalls; the COVID-19 pandemic and related impacts, including on the availability of, and efficiency of the supply, manufacturing and distribution systems for, the company's products, including any significant disruption to such systems; on the demand for and sales of the company's products; and on worldwide, regional and local adverse economic conditions; risks relating to acquisitions, new ventures and divestitures, and associated costs, including for asset impairment charges related to, among others, intangible assets, including trademarks and goodwill, in particular the impairment charges related to the carrying value of the company's VMS business and the divestiture of and related loss on the announced sale of the VMS business; and the ability to complete announced transactions and, if completed, integration costs and potential contingent liabilities related to those transactions; the accuracy of the company's estimates and assumptions on which its financial projections, including any sales or earnings guidance or outlook it may provide from time to time, are based; risks related to increases in the estimated fair value of The Procter & Gamble Company's interest in the Glad business; environmental matters, including costs associated with the remediation and monitoring of past contamination, and possible increases in costs resulting from actions by relevant regulators, and the handling and/or transportation of hazardous substances; the company's ability to effectively utilize, assert and defend its intellectual property rights, and any infringement or claimed infringement by the company of third-party intellectual property rights; the performance of strategic alliances and other business relationships; the effect of the company's indebtedness and credit rating on its business operations and financial results and the company's ability to access capital markets and other funding sources, as well as the cost of capital to the company; the company's ability to pay and declare dividends or repurchase its stock in the future; the impacts of potential stockholder activism; and risks related to any litigation associated with the exclusive forum provision in the company's bylaws.

The company's forward-looking statements in this press release are based on management's current views, beliefs, assumptions and expectations regarding future events and speak only as of the date of this press release. 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.

Non-GAAP Financial Information

•This press release contains non-GAAP financial information related to organic sales growth / (decrease), adjusted EPS, adjusted ETR and segment adjusted EBIT for the fourth quarter of fiscal year 2024 and for fiscal year 2024; as well as organic sales growth / (decrease) and adjusted EPS outlook for fiscal year 2025.

•Clorox defines organic sales growth / (decrease) as GAAP net sales growth / (decrease) excluding the effect of foreign exchange rate changes and any acquisitions or divestitures.

•Organic sales growth / (decrease) outlook for fiscal year 2025 excludes about 2 points of negative impact from the divestiture of the company's business in Argentina and about 3 points of negative impact from the expected divestiture of the Better Health VMS business.

•Management believes that the presentation of organic sales growth / (decrease) is useful to investors because it excludes sales from any acquisitions and divestitures, which results in a comparison of sales only from the businesses that the company was operating and expects to continue to operate throughout the relevant periods, and the company's estimate of the impact of foreign exchange rate changes, which are difficult to predict and out of the control of the company and management. However, organic sales growth / (decrease) may not be the same as similar measures provided by other companies due to potential differences in methods of calculation or differences in which items are incorporated into these adjustments.

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•Adjusted EPS is defined as diluted earnings per share that excludes or has otherwise been adjusted for significant items that are nonrecurring or unusual. The income tax effect on non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.

•Adjusted ETR is defined as the effective tax rate that excludes or that has otherwise been adjusted for significant items that are nonrecurring or unusual.

•Adjusted EPS and adjusted ETR are supplemental information that management uses to help evaluate the company's historical and prospective financial performance on a consistent basis over time. Management believes that by adjusting for certain items affecting comparability of performance over time, such as the pension settlement charge, incremental costs, net of insurance recoveries, related to the cyberattack, asset impairments, charges related to the streamlined operating model, charges related to the digital capabilities and productivity enhancements investment, significant losses/(gains) related to acquisitions / divestitures and other nonrecurring or unusual items, investors and management are able to gain additional insight into the company's underlying operating performance on a consistent basis over time. However, adjusted EPS and adjusted ETR may not be the same as similar measures provided by other companies due to potential differences in methods of calculation or differences in which items are incorporated into these adjustments.

•Adjusted EBIT represents 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 costs, net of insurance recoveries, related to the cyberattack, asset impairments, charges related to the streamlined operating model, charges related to the digital capabilities and productivity enhancements investment, significant losses/(gains) related to acquisitions / divestitures and other nonrecurring or unusual items impacting comparability during the period. The company uses this measure to assess the operating results and performance of its segments, perform analytical comparisons, identify strategies to improve performance, and allocate resources to each segment. Management believes that the presentation of adjusted EBIT excluding these items is useful to investors to assess operating performance on a consistent basis by removing the impact of the items that management believes do not directly reflect the performance of each segment's underlying operations. However, adjusted EBIT may not be the same as similar measures provided by other companies due to potential differences in methods of calculation or differences in which items are incorporated into these adjustments.

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•The reconciliation tables below refer to the equivalent GAAP measures adjusted as applicable for the following items:

Expected Divestiture of Better Health VMS Business

In the first quarter of fiscal year 2025, the company entered into a definitive agreement to sell its Better Health VMS business. As a result of this transaction, if completed, the company expects to record an after tax charge of $114 million to $134 million from the loss on sale.

Due to the nature, scope and magnitude of this charge, the company's management believes presenting this charge as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period over period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.

Divestiture of Argentina Business

In the third quarter of fiscal year 2024, the company completed the divestiture of its Argentina business, which consisted of its production plants in Argentina as well as the rights to the company's brands in Argentina, Uruguay and Paraguay. As a result of this transaction, the company recorded a pretax charge of $240 million ($231 million after tax), primarily due to the noncash impact of the release of cumulative currency translation losses related to these entities.

Due to the nature, scope and magnitude of these costs, the company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period over period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.

Pension Settlement Charge

In the second quarter of fiscal year 2024, the company settled plan benefits related to its domestic qualified pension plan through a combination of an annuity contract purchase with a third-party insurance provider and lump sum payouts. These payments were made using plan assets. In conjunction with this settlement, a one-time noncash charge of $171 million ($130 million after tax) was recorded.

Cyberattack

As previously disclosed, incremental costs were incurred by the company as the result of a cyberattack. These costs relate primarily to third-party consulting services, including IT recovery and forensic experts and other professional services incurred to investigate and remediate the attack, as well as incremental operating costs from the resulting disruption to the company's business operations.

In the fourth quarter of fiscal year 2024, the company recognized $30 million of insurance recoveries related to the cyberattack. The timing of recognizing further insurance recoveries may differ from the timing of recognizing the associated expenses. Costs associated with ongoing cybersecurity monitoring and prevention as well as enhancement to the company's cybersecurity program are not included within this adjustment. The company does not expect to incur significant costs related to the cyberattack in future periods.

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Streamlined Operating Model

In the first quarter of fiscal year 2023, Clorox began recognizing costs related to a plan that involves streamlining its operating model to meet its objectives of driving growth and productivity. The streamlined operating model is expected to enhance the company's ability to respond more quickly to changing consumer behaviors and innovate faster. The implementation of this new model was completed in fiscal year 2024.

The company expects cost savings of approximately $100 million annually. The benefits of the streamlined operating model are currently expected to increase future cash flows as a result of cost savings that will be generated primarily in the areas of selling and administration, supply chain, marketing and research and development. The company incurred $32 million and $60 million of costs in fiscal year 2024 and 2023, respectively. These costs included employee-related costs to reduce certain staffing levels, such as severance payments, as well as for consulting and other costs. Due to the nonrecurring and unusual nature of these costs, the company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period over period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.

Digital Capabilities and Productivity Enhancements Investment

As announced in August 2021, the company plans to invest in transformative technologies and processes over a five-year period. This investment began in fiscal year 2022, and includes replacement of the company's enterprise resource planning system and transitioning to a cloud-based platform as well as the implementation of a suite of other digital technologies. The total incremental transformational investment is expected to be $560 to $580 million, compared to the previous estimate of approximately $500 million. The increased cost estimate includes impacts from delays as a result of the cyberattack. The implementation timeline is unchanged. It is expected that these implementations will generate efficiencies and transform the company's operations in the areas of supply chain, digital commerce, innovation, brand building and more over the long term.

Of the total investment, approximately 70% is expected to represent incremental operating costs primarily recorded within selling and administrative expenses to be adjusted from reported EPS for purposes of disclosing adjusted EPS through fiscal year 2026. About 70% of these operating costs are expected to be related to the implementation of the ERP, with the remaining costs primarily related to the implementation of complementary technologies.

Due to the nature, scope and magnitude of this investment, these costs are considered by management to represent incremental transformational costs above the historical normal level of spending for information technology to support operations. Since these strategic investments, including incremental operating costs, will cease at the end of the investment period, are not expected to recur in the foreseeable future and are not considered representative of the company's underlying operating performance, the company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the company's operations and is useful for period-over-period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by company management.

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The following tables provide reconciliations of organic sales growth/(decrease) (non-GAAP) to net sales growth/(decrease), the most comparable GAAP measure:



	Three months ended June 30, 2024
	Percentage change versus the year-ago period
	Health and Wellness		Household		Lifestyle		International		Total Company (1)
Net sales growth / (decrease) (GAAP)	—	%	(10)	%	(2)	%	(11)	%	(6)	%
Add: Foreign Exchange	—		—		—		1		1
Add/(Subtract): Divestitures/Acquisitions (2)	—		—		—		15		2
Organic sales growth / (decrease) (non-GAAP)	—	%	(10)	%	(2)	%	5	%	(3)	%



	Twelve months ended June 30, 2024
	Percentage change versus the year-ago period
	Health and Wellness		Household		Lifestyle		International		Total Company (1)
Net sales growth / (decrease) (GAAP)	(2)	%	(7)	%	(5)	%	(2)	%	(4)	%
Add: Foreign Exchange	—		—		—		21		3
Add/(Subtract): Divestitures/Acquisitions (2)	—		—		—		4		1
Organic sales growth / (decrease) (non-GAAP)	(2)	%	(7)	%	(5)	%	23	%	—	%

(1)Total company includes Corporate and Other.

(2)The Argentina divestiture impact is calculated as net sales from the Argentina business after March 20, 2024, the divestiture date, until the end of the three and twelve month periods for the year-ago periods.

Page 11 of 16

The following tables provide reconciliations of adjusted diluted earnings per share (non-GAAP) to diluted earnings per share, the most comparable GAAP measure, and adjusted effective tax rate (non-GAAP) to effective tax rate, the most comparable GAAP measure:


Adjusted Diluted Earnings Per Share (EPS) and Adjusted Effective Tax Rate (ETR)
(Dollars in millions except per share data)

			Diluted earnings per share							Effective tax rate
			Three months ended							Three months ended
			6/30/2024		6/30/2023		% Change			6/30/2024			6/30/2023

	As reported (GAAP)		$	1.73	$	1.42	22		%	19.7		%	23.8	%


	Cyberattack costs, net of insurance recoveries (1)		(0.17)		—					(0.3)		%	—	%

	Streamlined operating model (2)		0.12		0.09					0.2		%	0.1	%
	Digital capabilities and productivity enhancements investment (3)		0.14		0.16					0.3		%	0.1	%
	As adjusted (Non-GAAP)		$	1.82	$	1.67	9		%	19.9		%	24.0	%

			Diluted earnings per share							Effective tax rate
			Twelve months ended							Twelve months ended
			6/30/2024		6/30/2023		% Change			6/30/2024			6/30/2023

	As reported (GAAP)		$	2.25	$	1.20	88		%	26.5		%	32.4	%
	Loss on divestiture (4)		1.85		—					(8.6)		%	—	%
	Pension settlement charge (5)		1.04		—					0.9		%	—	%
	Cyberattack costs, net of insurance recoveries (1)		0.17		—					0.2		%	—	%
	VMS impairment (6)		—		2.91					—		%	(8.9)	%
	Streamlined operating model (2)		0.20		0.37					0.2		%	—	%
	Digital capabilities and productivity enhancements investment (3)		0.66		0.61					0.9		%	0.1	%
	As adjusted (Non-GAAP)		$	6.17	$	5.09	21		%	20.1		%	23.6	%

	(1)During the three months ended Jun. 30, 2024, the company recognized approximately $28 ($21 after tax) of insurance recoveries related to the cyberattack, net of incremental costs incurred. In the twelve months ended Jun. 30, 2024, the company incurred approximately $29 ($22 after tax) of costs related to the cyberattack, net of insurance recoveries. These costs relate primarily to third-party consulting services, including IT recovery and forensic experts and other professional services incurred to investigate and remediate the attack, as well as incremental operating expenses from the resulting disruption to the company's business operations.
	(2)During the three and twelve months ended Jun. 30, 2024, the company incurred approximately $19 ($15 after tax) and $32 ($25 after tax), respectively, and during the three and twelve months ended Jun. 30, 2023, the company incurred approximately $16 ($11 after tax) and $60 ($45 after tax), respectively, of restructuring and related costs, net for implementation of the streamlined operating model.
	(3)During the three and twelve months ended Jun. 30, 2024, the company incurred approximately $23 ($18 after tax) and $108 ($82 after tax), respectively and during the three and twelve months ended Jun. 30, 2023, the company incurred approximately $27 ($21 after tax) and $100 ($76 after tax), respectively, of operating expenses related to its digital capabilities and productivity enhancements investment. The expenses relate to the following:

			Three months ended				Twelve months ended
			6/30/2024		6/30/2023		6/30/2024			6/30/2023
		External consulting fees (a)	$	15	$	21	$	80		$	79
		IT project personnel costs (b)	2		2		8			6
		Other (c)	6		4		20			15
		Total	$	23	$	27	$	108		$	100

		(a)Comprised of third-party consulting fees incurred to assist in the project management and the preliminary project stage of this transformative investment. The company relies on consultants for certain capabilities required for these programs that the company does not maintain internally. These costs support the implementation of these programs incremental to the company's normal IT costs and will not be incurred following implementation.

Page 12 of 16


	(b)Comprised of labor costs associated with internal IT project management teams that are utilized to oversee the new system implementations. Given the magnitude and transformative nature of the implementations planned, the necessary project management costs are incremental to the historical levels of spend and will no longer be incurred subsequent to implementation. As a result of this long-term strategic investment, the company considers these costs not reflective of the ongoing costs to operate its business.
	(c)Comprised of various other expenses associated with the company’s new system implementations, including company personnel dedicated to the project that have been backfilled with either permanent or temporary resources in positions that are considered part of normal operating expenses.
(4)During the twelve months ended Jun. 30, 2024, the company incurred approximately $240 ($231 after tax) of costs related to the divestiture of the Argentina business.
(5)During the twelve months ended Jun. 30, 2024, the company incurred approximately $171 ($130 after tax) of costs related to the settlement of the domestic qualified pension plan.
(6)During the twelve months ended Jun. 30, 2023, a noncash impairment charge for goodwill and trademarks was recorded for $445 ($362 after tax) related to the VMS business.

		Full year 2025 outlook (estimated range)
		Diluted earnings per share				Effective tax rate
		Low		High		Midpoint
As estimated (GAAP)		$	4.95	$	5.20	28%
Expected loss on divestiture (7)		1.00		1.00		(4)%

Digital capabilities and productivity enhancements investment (8)		0.60		0.60		—
As adjusted (Non-GAAP)		$	6.55	$	6.80	24%

(7)In fiscal year 2025, the company expects to incur approximately $114-$134 after tax, of costs related to the divestiture of the Better Health VMS business.
(8)In fiscal year 2025, the company expects to incur approximately $90-$100 ($68-$76 after tax) of operating expenses related to its digital capabilities and productivity enhancements investment.

The following tables provide reconciliations of adjusted EBIT (non-GAAP) to earnings (losses) before income taxes, the most comparable GAAP measure:


	Reconciliation of earnings (losses) before income taxes to adjusted EBIT
	Three months ended				Twelve months ended
	6/30/2024		6/30/2023		6/30/2024		6/30/2023
Earnings (losses) before income taxes	$	275	$	237	$	398	$	238
Interest income	(2)		(7)		(23)		(16)
Interest expense	21		21		90		90
Loss on divestiture	—		—		240		—
Pension settlement charge	—		—		171		—
Cyberattack costs, net of insurance recoveries	(28)		—		29		—
VMS impairment	—		—		—		445
Streamlined operating model	19		16		32		60
Digital capabilities and productivity enhancements investment	23		27		108		100
Adjusted EBIT	$	308	$	294	$	1,045	$	917

Page 13 of 16


Condensed Consolidated Statements of Earnings
Dollars in millions, except per share data
	Three months ended				Twelve months ended
	06/30/2024		06/30/2023		06/30/2024		06/30/2023
	(Unaudited)		(Unaudited)		(Unaudited)
Net sales	$	1,903	$	2,019	$	7,093	$	7,389
Cost of products sold	1,019		1,157		4,045		4,481
Gross profit	884		862		3,048		2,908
Selling and administrative expenses	268		329		1,167		1,183
Advertising costs	266		211		832		734
Research and development costs	33		38		126		138
Loss on divestiture	—		—		240		—
Pension settlement charge	—		—		171		—
Goodwill, trademark and other intangible asset impairments	—		—		—		445
Interest expense	21		21		90		90
Other (income) expense, net	21		26		24		80
Earnings before income taxes	275		237		398		238
Income taxes	54		56		106		77
Net earnings	221		181		292		161
Less: Net earnings attributable to noncontrolling interests	5		5		12		12
Net earnings attributable to Clorox	$	216	$	176	$	280	$	149

Net earnings per share attributable to Clorox
Basic net earnings per share	$	1.74	$	1.43	$	2.26	$	1.21
Diluted net earnings per share	$	1.73	$	1.42	$	2.25	$	1.20

Weighted average shares outstanding (in thousands)
Basic	124,300		123,823		124,174		123,589
Diluted	125,052		124,641		124,804		124,181

Page 14 of 16


Reportable Segment Information
(Unaudited)
Dollars in millions

	Net sales						Net sales
	Three months ended						Twelve months ended
	6/30/2024		6/30/2023		% Change(1)		6/30/2024		6/30/2023		% Change(1)
Health and Wellness	$	652	$	651	—	%	$	2,485	$	2,532	(2)	%
Household	597		663		(10)	%	1,950		2,098		(7)	%
Lifestyle	328		333		(2)	%	1,275		1,338		(5)	%
International	271		305		(11)	%	1,162		1,181		(2)	%
Reportable segment total	$	1,848	$	1,952			$	6,872	$	7,149
Corporate and Other (2)	55		67		(18)	%	221		240		(8)	%
Total	$	1,903	$	2,019	(6)	%	$	7,093	$	7,389	(4)	%

	Segment adjusted EBIT						Segment adjusted EBIT
	Three months ended						Twelve months ended
	6/30/2024		6/30/2023		% Change(1)		6/30/2024		6/30/2023		% Change(1)
Health and Wellness	$	202	$	176	15	%	$	719	$	594	21	%
Household	98		143		(31)	%	260		308		(16)	%
Lifestyle	61		67		(9)	%	253		284		(11)	%
International	18		15		20	%	122		89		37	%
Reportable segment total	$	379	$	401			$	1,354	$	1,275
Corporate and Other (2)	(71)		(107)		34	%	(309)		(358)		14	%
Total	$	308	$	294	5	%	$	1,045	$	917	14	%
Interest income	2		7				23		16
Interest expense	(21)		(21)				(90)		(90)
Loss on divestiture (3)	—		—				(240)		—
Pension settlement (4)	—		—				(171)		—
Cyberattack costs, net of insurance recoveries (5)	28		—				(29)		—
VMS impairment (6)	—		—				—		(445)
Streamlined operating model (7)	(19)		(16)				(32)		(60)
Digital capabilities and productivity enhancements investment (8)	(23)		(27)				(108)		(100)
Earnings (losses) before income taxes	$	275	$	237	16	%	$	398	$	238	67	%

(1)Percentages based on rounded numbers.

(2)Corporate and Other includes the Vitamin, Minerals and Supplements business.

(3)Represents the loss on divestiture of Argentina operations of $240 ($231 after tax) for the twelve months ended Jun. 30, 2024.

(4)Represents the pension settlement charge of $171 ($130 after tax) for the twelve months ended Jun. 30, 2024.

(5)Represents insurance recoveries related to the cyberattack, net of costs incurred of $28 ($21 after tax) for the three months ended Jun. 30, 2024 and costs related to the cyberattack, net of insurance recoveries of $29 ($22 after tax) for the twelve months ended Jun. 30, 2024.

(6)Represents a $445 ($362 after tax) noncash impairment charge related to the VMS business for the twelve months ended Jun. 30, 2023.

(7)Represents restructuring and related costs, net for implementation of the streamlined operating model of $19 ($15 after tax) and $32 ($25 after tax) for the three and twelve months ended Jun. 30, 2024, respectively, and $16 ($11 after tax) and $60 ($45 after tax) for the three and twelve months ended Jun. 30, 2023, respectively.

(8)Represents expenses related to the company's digital capabilities and productivity enhancements investment of $23 ($18 after tax) and $108 ($82 after tax) for the three and twelve months ended Jun. 30, 2024, respectively and $27 ($21 after tax) and $100 ($76 after tax) for the three and twelve months ended June 30, 2023, respectively.

Page 15 of 16


Condensed Consolidated Balance Sheets
Dollars in millions
			6/30/2024		6/30/2023
			(Unaudited)
ASSETS
Current assets
	Cash and cash equivalents		$	202	$	367
	Receivables, net			695		688
	Inventories, net			637		696
	Prepaid expenses and other current assets			88		77
		Total current assets		1,622		1,828
Property, plant and equipment, net				1,315		1,345
Operating lease right-of-use assets				360		346
Goodwill				1,228		1,252
Trademarks, net				538		543
Other intangible assets, net				143		169
Other assets				545		462
Total assets			$	5,751	$	5,945

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
	Notes and loans payable		$	4	$	50

	Current operating lease liabilities			84		87
	Accounts payable and accrued liabilities			1,486		1,659
	Income taxes payable			—		121
		Total current liabilities		1,574		1,917
Long-term debt				2,481		2,477
Long-term operating lease liabilities				334		310
Other liabilities				848		825
Deferred income taxes				22		28
		Total liabilities		5,259		5,557
Commitments and contingencies
Stockholders’ equity
Preferred stock				—		—
Common stock				131		131
Additional paid-in capital				1,288		1,245
Retained earnings				250		583
Treasury stock				(1,186)		(1,246)
Accumulated other comprehensive net (loss) income				(155)		(493)
		Total Clorox stockholders’ equity		328		220
Noncontrolling interests				164		168
Total stockholders’ equity				492		388
Total liabilities and stockholders’ equity			$	5,751	$	5,945

Page 16 of 16


The Clorox Company


Three months ended June 30, 2024
Percentage change versus the year-ago period
	Reported (GAAP) Net Sales Growth/ (Decrease)	Reported Volume	Acquisitions & Divestitures (1)	Foreign Exchange Impact	Price Mix and Other (2)	Organic Sales Growth/ (Decrease) (Non-GAAP) (3)	Organic Volume (4)
Health and Wellness	—%	2%	—%	—%	(2)%	—%	2%
Household	(10)	(5)	—	—	(5)	(10)	(5)
Lifestyle	(2)	—	—	—	(2)	(2)	—
International (4)	(11)	(15)	(15)	(1)	1	5	4


Total Company (4)(5)	(6)%	(4)%	(2)%	(1)%	(2)%	(3)%	(1)%


Twelve months ended June 30, 2024
Percentage change versus the year-ago period
	Reported (GAAP) Net Sales Growth/ (Decrease)	Reported Volume	Acquisitions & Divestitures (1)	Foreign Exchange Impact	Price Mix and Other (2)	Organic Sales Growth/ (Decrease) (Non-GAAP) (3)	Organic Volume (4)
Health and Wellness	(2)%	(4)%	—%	—%	2%	(2)%	(4)%
Household	(7)	(8)	—	—	1	(7)	(8)
Lifestyle	(5)	(6)	—	—	1	(5)	(6)
International (4)	(2)	(5)	(4)	(21)	23	23	—


Total Company (4)(5)	(4)%	(6)%	(1)%	(3)%	5%	—%	(5)%

(1)The Argentina divestiture impact is calculated as net sales from the Argentina business after March 20, the divestiture date, until the end of the three and twelve month periods for the year-ago periods.

(2)This represents the net impact on net sales growth / (decrease) from pricing actions, mix and other factors.

(3)Organic sales growth/ (decrease) is defined as net sales growth / (decrease) excluding the effect of any acquisitions and divestitures and foreign exchange rate changes. See “Non-GAAP Financial Information” below for reconciliation of organic sales growth/ (decrease) to net sales growth/ (decrease), the most directly comparable GAAP financial information.

(4)Organic volume represents volume excluding the effect of any acquisitions and divestitures. In the three months ended June 30, 2024, the volume impact of divestitures was (19%) and (3%) for International and Total Company, respectively. In the twelve months ended June 30, 2024, the volume impact of divestitures was (5%) and (1%) for International and Total Company, respectively.

(5)Total company includes Corporate and Other.


The Clorox Company

Non-GAAP Financial Information

Management believes that the presentation of organic sales growth / (decrease) is useful to investors because it excludes sales from any acquisitions and divestitures, which results in a comparison of sales only from the businesses that the company was operating throughout the relevant periods, and the impact of foreign exchange rate changes, which are out of the control of the company and management. However, organic sales growth / (decrease) may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded.


The Clorox Company

The following table provides a reconciliation of organic sales growth / (decrease) (non-GAAP) to net sales growth / (decrease) (GAAP), the most comparable GAAP measure:



	Three months ended June 30, 2024
	Percentage change versus the year-ago period
	Health and Wellness	Household	Lifestyle	International	Total Company (1)
Net sales growth / (decrease) (GAAP)	—%	(10)%	(2)%	(11)%	(6)%
Add: Foreign Exchange	—	—	—	1	1
Add/(Subtract): Divestitures/Acquisitions (2)	—	—	—	15	2
Organic sales growth / (decrease) (non-GAAP)	—%	(10)%	(2)%	5%	(3)%


	Twelve months ended June 30, 2024
	Percentage change versus the year-ago period
	Health and Wellness	Household	Lifestyle	International	Total Company (1)
Net sales growth / (decrease) (GAAP)	(2)%	(7)%	(5)%	(2)%	(4)%
Add: Foreign Exchange	—	—	—	21	3
Add/(Subtract): Divestitures/Acquisitions (2)	—	—	—	4	1
Organic sales growth / (decrease) (non-GAAP)	(2)%	(7)%	(5)%	23%	—%

(1)Total company includes Corporate and Other.

(2)The Argentina divestiture impact is calculated as net sales from the Argentina business after March 20, the divestiture date, until the end of the three and twelve month periods for the year-ago periods.


The Clorox Company

Supplemental Unaudited Condensed Information – Gross Margin Drivers

The table below provides details on the drivers of gross margin change versus the year-ago period.

Driver

Gross Margin Change vs. Prior Year (basis points)

FY23

FY24

Cost Savings

+180

+170

+150

+210

+180

+220

+170

+140

+170

+180

Price Changes

+530

+680

+750

+670

+660

+470

+380

+420

+10

+300

Market Movement (commodities)

-330

-240

-230

-260

-20

+60

+10

Manufacturing & Logistics

-350

-100

-120

-140

-180

+10

-210

+190

+60

All other (1) (2) (3) (4) (5)

-140

-190

+40

+50

-40

-430

+170

-290

-50

-190

Change vs prior year

-110

+320

+590

+560

+360

+240

+730

+40

+380

+360

Gross Margin (%)

36.0%

36.2%

41.8%

42.7%

39.4%

38.4%

43.5%

42.2%

46.5%

43.0%

(1)In Q1 of fiscal year 2023, "All other" includes the negative impact from lower shipment volumes.

(2)In Q2 of fiscal year 2023, "All other" includes the negative impact from mix and assortment.

(3)In Q1 of fiscal year 2024, "All other" includes the impact from lower shipment volumes and mix and assortment.

(4)In Q2 of fiscal year 2024, "All other" includes the positive impact from higher shipment volumes and the negative impact from foreign exchange.

(5)In Q3 of fiscal year 2024, "All other" includes the negative impact from foreign exchange and higher trade promotion spending.


The Clorox Company

Supplemental Unaudited Condensed Information – Cash Flow

For the quarter ended June 30, 2024

Capital expenditures for the fourth quarter were $81 million versus $84 million in the year-ago quarter (Fiscal year 2024 = $212 million).

Depreciation and amortization expense for the fourth quarter was $59 million versus $62 million in the year-ago quarter (Fiscal year 2024 = $235 million).

Net cash provided by operations in the fourth quarter was $340 million, or 17.9% of net sales (Fiscal year 2024 = $695 million, or 9.8% of net sales).

Supplemental Unaudited Condensed Information – Free Cash Flow

Fiscal Year Free Cash Flow Reconciliation

Dollars in Millions and percentages based on rounded numbers


	Fiscal year 2024	Fiscal year 2023
Net cash provided by operations – GAAP	$695	$1,158
Less: Capital expenditures	$212	$228
Free cash flow – non-GAAP (1)	$483	$930
Free cash flow as a percentage of net sales – non-GAAP (1)	6.8%	12.6%
Net sales	$7,093	$7,389

(1)In accordance with the SEC's Regulation G, this schedule provides the definition of certain non-GAAP measures and the reconciliation to the most closely related GAAP measure. Management uses free cash flow and free cash flow as a percentage of net sales to help assess the cash generation ability of the business and funds available for investing activities, such as acquisitions, investing in the business to drive growth and financing activities, including debt payments, dividend payments and stock repurchases. Free cash flow does not represent cash available only for discretionary expenditures since the Company has mandatory debt service requirements and other contractual and non-discretionary expenditures. In addition, free cash flow may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures and should be read in connection with the company’s consolidated financial statements presented in accordance with GAAP.


The Clorox Company

Supplemental Unaudited Reconciliation of Earnings Before Income Taxes to EBIT (1)(3) and Adjusted EBIT (2)(3)

Dollars in millions and percentages based on rounded numbers


	FY 2023		FY 2024

		Q1	Q2	Q3	Q4	FY	Q1	Q2	Q3	Q4	FY
		9/30/22	12/31/22	3/31/23	6/30/23	6/30/23	9/30/23	12/31/23	3/31/24	6/30/24	6/30/24
Earnings (losses) before income taxes		$116	$130	($245)	$237	$238	$29	$136	($42)	$275	$398
Interest income		(2)	(3)	(4)	(7)	(16)	(10)	(7)	(4)	(2)	(23)
Interest expense		22	23	24	21	90	21	26	22	21	90
EBIT (1)(3)		$136	$150	($225)	$251	$312	$40	$155	($24)	$294	$465
EBIT margin (1)(3)		7.8%	8.7%	-11.7%	12.4%	4.2%	2.9%	7.8%	-1.3%	15.4%	6.6%
Loss on divestiture(4)		—	—	—	—	—	—	—	240	—	240
Pension settlement charge (5)		—	—	—	—	—	—	171	—	—	171
Cyberattack costs, net of insurance recoveries (6)		—	—	—	—	—	24	25	8	(28)	29
VMS impairment (7)		—	—	445	—	445	—	—	—	—	—
Streamlined operating model (8)		19	4	21	16	60	—	3	10	19	32
Digital capabilities and productivity enhancements investment (9)		20	25	28	27	100	27	32	26	23	108
Adjusted EBIT – non-GAAP (2)(3)		$175	$179	$269	$294	$917	$91	$386	$260	$308	$1,045
Adjusted EBIT margin (2)(3)		10.1%	10.4%	14.0%	14.6%	12.4%	6.6%	19.4%	14.3%	16.2%	14.7%
Net sales		$1,740	$1,715	$1,915	$2,019	$7,389	$1,386	$1,990	$1,814	$1,903	$7,093

(1)EBIT (a non-GAAP measure) represents earnings (losses) before income taxes (a GAAP measure), excluding interest income and interest expense, as reported above. EBIT margin is the ratio of EBIT to net sales.

(2)Adjusted EBIT (a non-GAAP measure) represents earnings (losses) before income taxes (a GAAP measure), excluding interest income, interest expense and other significant items that are

nonrecurring or unusual (such as the pension settlement charge, incremental costs, net of insurance recoveries, related to the cyberattack, asset impairments, charges related to the streamlined operating model, charges related to the digital capabilities and productivity enhancements investment, significant losses/(gains) related to acquisitions / divestitures and other nonrecurring or unusual items as reported above). Adjusted EBIT margin is the ratio of adjusted EBIT to net sales. Refer to the Non-GAAP Financial Information within the earnings release for further discussion on the adjustments presented.

(3)In accordance with the SEC's Regulation G, this schedule provides the definition of certain non-GAAP measures and the reconciliation to the most closely related GAAP measure. Management believes the presentation of EBIT, EBIT margin, adjusted EBIT and adjusted EBIT margin provides useful additional information to investors about trends in the company's operations and is useful for comparability of performance over time. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP financial measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read in connection with the company’s consolidated financial statements presented in accordance with GAAP.

(4)Represents losses related to the divestiture of the Argentina business.

(5)Represents costs related to the settlement of the domestic qualified pension plan.

(6)Reflects incremental costs, net of insurance recoveries, related to the cyberattack incurred during fiscal year 2024. These costs relate primarily to third-party consulting services, including IT recovery and forensic experts and other professional services incurred to investigate and remediate the attack, as well as incremental operating costs from the resulting disruption to the company's business operations.

(7)Reflects a noncash impairment charge for goodwill and trademarks related to the VMS business.

(8)Reflects the restructuring and related costs, net incurred by the company for implementation of the streamlined operating model. These expenses were primarily attributable to employee-related costs and other associated costs. Refer to the Non-GAAP Financial Information within the earnings release for further discussion.

(9)Reflects the operating expenses incurred by the company related to its digital capabilities and productivity enhancements investment. The majority of these expenses relate to external consulting fees. The remaining expenses relate to internal IT project management and supporting personnel costs and other costs. Refer to the Non-GAAP Financial Information within the earnings release for further discussion.


The Clorox Company

Supplemental Unaudited Reconciliation of Adjusted Earnings Per Share (9)(11) and Adjusted Effective Tax Rate (10)(11)

(Dollars in millions except per share data)


	Diluted earnings per share					Effective tax rate
	Three months ended					Three months ended
	6/30/2024		6/30/2023		% Change	6/30/2024		6/30/2023
As reported (GAAP)	$	1.73	$	1.42	22%	19.7	%	23.8	%
Cyberattack costs, net of insurance recoveries (1)	(0.17)		—			(0.3)	%	—
Streamlined operating model (2)	0.12		0.09			0.2	%	0.1	%
Digital capabilities and productivity enhancements investment (3)	0.14		0.16			0.3	%	0.1	%

As adjusted (Non-GAAP) (9)(10)(11)	$	1.82	$	1.67	9%	19.9%		24.0%

	Diluted earnings per share					Effective tax rate
	Twelve months ended					Twelve months ended
	6/30/2024		6/30/2023		% Change	6/30/2024		6/30/2023
As reported (GAAP)	$	2.25	$	1.20	88%	26.5	%	32.4%
Loss on divestiture (4)	1.85		—			(8.6)	%	—
Pension settlement charge (5)	1.04		—			0.9	%	—
Cyberattack costs, net of insurance recoveries (1)	0.17		—			0.2	%	—
VMS impairment (6)	—		2.91			—	%	(8.9)	%
Streamlined operating model (2)	0.20		0.37			0.2	%	—
Digital capabilities and productivity enhancements investment (3)	0.66		0.61			0.9	%	0.1	%
As adjusted (Non-GAAP) (9)(10)(11)	$	6.17	$	5.09	21%	20.1%		23.6%

(1)During the three months ended Jun. 30, 2024, the company recognized approximately $28 ($21 after tax) of insurance recoveries related to the cyberattack, net of incremental costs incurred. In the twelve months ended Jun. 30, 2024, the company incurred approximately $29 ($22 after tax) of costs related to the cyberattack, net of insurance recoveries. These costs relate primarily to third-party consulting services, including IT recovery and forensic experts and other professional services incurred to investigate and remediate the attack, as well as incremental operating costs from the resulting disruption to the company's business operations.

(2)During the three and twelve months ended Jun. 30, 2024, the company incurred approximately $19 ($15 after tax) and $32 ($25 after tax), respectively, and during the three and twelve months ended Jun. 30, 2023, the company incurred approximately $16 ($11 after tax) and $60 ($45 after tax), respectively, of restructuring and related costs, net for implementation of the streamlined operating model. Refer to the Non-GAAP Financial Information within the earnings release for further discussion.

(3)During the three and twelve months ended Jun. 30, 2024, the company incurred approximately $23 ($18 after tax) and $108 ($82 after tax), respectively,and during the three and twelve months ended Jun. 30, 2023, the company incurred approximately $27 ($21 after tax) and $100 ($76 after tax), respectively, of operating expenses related to its digital capabilities and productivity enhancements investment. Refer to the Non-GAAP Financial Information within the earnings release for further discussion.

(4)During the twelve months ended Jun. 30, 2024, the company incurred approximately $240 ($231 after tax) of costs related to the divestiture of the Argentina business.

(5)During the twelve months ended Jun. 30, 2024, the company incurred approximately $171 ($130 after tax) of costs related to the settlement of the domestic qualified pension plan.

(6)During the twelve months ended Jun. 30, 2023, noncash impairment charges of goodwill and trademarks were recorded of $445 ($362 after tax) related to the VMS business.


The Clorox Company


	Full year 2025 outlook
	Estimated range
	Diluted earnings per share				Effective tax rate
	Low		High		Midpoint
As estimated (GAAP)	$	4.95	$	5.20	28%
Expected loss on divestiture (7)	1.00		1.00		(4)%
Digital capabilities and productivity enhancements investment (8)	0.60		0.60		—
As adjusted (Non-GAAP) (9)(10)(11)	$	6.55	$	6.80	24%

(7)In fiscal year 2025, the company expects to incur approximately $114-$134 after tax, of costs related to the divestiture of the Better Health VMS business.

(8)In fiscal year 2025, the company expects to incur approximately $90-$100 ($68-$76 after tax) of operating expenses related to its digital capabilities and productivity enhancements investment.

(9)Adjusted EPS is defined as diluted earnings per share that excludes or has otherwise been adjusted for significant items that are nonrecurring or unusual. The income tax effect on non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.

(10)Adjusted ETR is defined as the effective tax rate that excludes or that has otherwise been adjusted for significant items that are nonrecurring or unusual.

(11)Adjusted EPS and adjusted ETR are supplemental information that management uses to help evaluate the company's historical and prospective financial performance on a consistent basis over time. Management believes that by adjusting for certain items affecting comparability of performance over time, such as the pension settlement charge, incremental costs, net of insurance recoveries, related to the cyberattack, asset impairments, charges related to the streamlined operating model, charges related to the digital capabilities and productivity enhancements investment, significant losses/(gains) related to acquisitions / divestitures and other nonrecurring or unusual items, investors and management are able to gain additional insight into the company's underlying operating performance on a consistent basis over time. However, adjusted EPS and adjusted ETR may not be the same as similar measures provided by other companies due to potential differences in methods of calculation or differences in which items are incorporated into these adjustments.

Cover	Aug. 01, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Aug. 01, 2024
Entity Registrant Name	THE CLOROX COMPANY
Entity Incorporation, State or Country Code	DE
Entity File Number	1-07151
Entity Tax Identification Number	31-0595760
Entity Address, Address Line One	1221 Broadway
Entity Address, City or Town	Oakland
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94612-1888
City Area Code	510
Local Phone Number	271-7000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock - $1.00 par value
Trading Symbol	CLX
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0000021076
Amendment Flag	false