Clorox Pre-Q4 Earnings Send Mixed Signals: Time to Accumulate Shares?

The Clorox Company CLX is slated to report fiscal fourth-quarter 2025 earnings on July 31, after market close. The company is expected to register year-over-year top-and-bottom-line growth when it posts fourth-quarter numbers.The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $1.94 billion, indicating an increase of 2% from the prior-year quarter. The consensus mark for quarterly earnings per share (EPS) has increased by a penny in the past seven days to $2.25 per share, indicating an increase of 23.6% from the figure reported in the year-ago quarter. The Clorox Company Price, Consensus and EPS Surprise The Clorox Company price-consensus-eps-surprise-chart | The Clorox Company QuoteThe Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $7.1 billion, indicating a decline of 0.5% from the prior-year quarter. The consensus mark for quarterly earnings has increased by a penny in the past seven days to $7.09 per share, indicating an increase of 14.9% from the figure reported in the year-ago quarter. CLX has a trailing four-quarter earnings surprise of 14.7%, on average, including a 7.6%  negative surprise in the last reported quarter.Things to Know Ahead of CLX’s Q4 EarningsClorox appears well-positioned ahead of its fourth-quarter fiscal 2025 earnings release, supported by its strategic focus on innovation, cost discipline, and brand equity in essential categories. The company continues to execute its IGNITE strategy, leveraging premium innovation and price-pack architecture to align with evolving consumer preferences. Notably, Clorox’s successful launch of premium offerings such as Scentiva and enhanced ToiletWand solutions underpins its ability to drive top-line growth even in a bifurcated consumer environment. Management also reaffirmed its confidence in delivering full-year organic sales growth, aided by strength in the Cleaning and Food categories.A key area of resilience lies in Clorox’s continued margin expansion and operational efficiency. The company achieved its 10th consecutive quarter of gross margin growth in third-quarter fiscal 2025, which provides a solid foundation for earnings stability amid external headwinds. Through its holistic margin management program and disciplined promotional strategies, Clorox has mitigated cost pressures effectively. For fourth-quarter fiscal 2025, gross margin is projected to be around 44%, consistent with the full-year average, despite anticipated tariff-related costs and ERP transition expenses. Moreover, the recent inventory build by retailers in anticipation of Clorox’s upcoming ERP system change could provide temporary uplift in reported sales.Our model predicts adjusted operating profit to increase 27% year over year to $391.2 million. The operating margin is expected to expand 400 basis points (bps) to 20.2%.The International segment also presents growth potential, with the company selectively investing in profitable platforms and markets. While the consumer environment remains under strain, Clorox's brands continue to maintain strong household penetration globally, and premium positioning has insulated them from major trade-down behavior. Retail partnerships are reportedly stable, with retailers actively managing supply chains in sync with Clorox’s transition timeline. Although category performance remains volatile, Clorox’s trusted brand portfolio and strong execution capabilities allow it to navigate challenges more effectively than many peers.However, Clorox continues to operate in a challenging macroeconomic environment where consumers face ongoing financial pressures. The company has been contending with increased advertising expenses essential for maintaining brand visibility, which have weighed on its profitability. Clorox faces stiff competition in the consumer goods sector, which further pressures its market share and operational performance. The company is also contending with early impacts from tariffs and elevated selling, general, and administrative (SG&A) costs tied to its ongoing digital and ERP investments.What the Zacks Model Unveils for CLXOur proven model does not conclusively predict an earnings beat for Clorox this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.Clorox currently has an Earnings ESP of -3.62% and a Zacks Rank of 5 (Strong Sell).CLX’s Price Performance & ValuationFrom a valuation perspective, CLX stock is trading at a discount relative to the industry. CLX has a forward 12-month price-to-earnings ratio of 19.50x, below the Consumer Products - Staples industry’s average of 20.20x.CLX P/E ValuationImage Source: Zacks Investment ResearchCLX has lost 21.6% in the year-to-date period, underperforming its industry’s decline of 2.4% in the same period. Furthermore, Clorox’s performance has lagged the broader Consumer Staples sector’s 5.4% growth and the S&P 500's 8.3% decrease in the same period.CLX Stock's Price PerformanceImage Source: Zacks Investment ResearchMore Stocks With the Favorable CombinationHere are a few more companies, which, according to our model, have the right combination of elements to beat on earnings this reporting cycle.Church & Dwight CHD currently has an Earnings ESP of +0.44% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for quarterly EPS is pegged at 85 cents, which implies a roughly 8.6% decrease year over year. CHD has a trailing four-quarter earnings surprise of roughly 7.3%, on average. The Zacks Consensus Estimate for Church & Dwight’s second-quarter 2025 revenues is pegged at $1.48 billion, indicating a decline of 2.2% from the figure reported in the prior-year quarter.Anheuser-Busch InBev SA/NV BUD, alias AB InBev, has an Earnings ESP of +0.37% and a Zacks Rank of 3 at present. BUD is likely to register a bottom-line increase when it releases second-quarter 2025 results. The consensus estimate for AB InBev’s quarterly earnings has risen by 2 cents in the past 30 days to 94 cents per share, implying a growth of 4.4% from the year-ago quarter’s number.The Zacks Consensus Estimate for quarterly revenues is pegged at $15.3 billion, which implies a decline of 0.01% from the figure reported in the year-ago quarter. BUD delivered an earnings surprise of 10.9%, on average, in the trailing four quarters.The Hershey Company HSY currently has an Earnings ESP of +4.56% and a Zacks Rank of 3. The company is likely to register top-line growth when it reports second-quarter fiscal 2025 results. The consensus mark for Hershey’s quarterly revenues is pegged at $2.5 billion, which indicates an increase of 22.8% from the figure reported in the prior-year quarter.The Zacks Consensus Estimate for Hershey’s quarterly EPS is pegged at $1.01, indicating a 20.5% decline from the year-ago period. HSY delivered a trailing four-quarter earnings surprise of 0.6%, on average.Higher. Faster. Sooner. Buy These Stocks NowA small number of stocks are primed for a breakout, and you have a chance to get in before they take off.At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We’ve combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month.You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days.Download the report free now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Hershey Company (The) (HSY): Free Stock Analysis Report The Clorox Company (CLX): Free Stock Analysis Report Church & Dwight Co., Inc. (CHD): Free Stock Analysis Report Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks