Oakland, California-based The Clorox Company (CLX) manufactures and markets consumer and professional products. It operates through Health and Wellness, Household, Lifestyle, and International segments. With a market cap of $19.9 billion, Clorox’s portfolio consists of diverse brands sold in more than 100 countries and nearly every region. It is expected to release its Q1 earnings after the market closes on Wednesday, Oct. 30.

Ahead of the event, analysts expect Clorox to report a profit of $1.36 per share, up 177.6% from $0.49 per share reported in the year-ago quarter. The company has surpassed Wall Street’s adjusted EPS projections in each of the past four quarters. Its adjusted EPS for the last reported quarter grew 9% year-over-year to $1.82, exceeding the consensus estimates by 18.2%. The high expected increase in earnings is primarily due to the base effect of a 47.3% year-over-year drop in adjusted EPS in Q1 2024.

For fiscal 2025, analysts expect Clorox to report an adjusted EPS of $6.64, up 7.6% from $6.17 in fiscal 2024. In fiscal 2026, its adjusted EPS is expected to grow 5.9% year-over-year to $7.03.

CLX stock has gained 12.5% on a YTD basis, lagging behind the S&P 500 Index’s ($SPX) 22.7% gains and the Consumer Staples Select Sector SPDR Fund’s (XLP) 13.2% returns during the same time frame.

Despite missing Wall Street’s topline expectations, shares of Clorox surged 7.4% after the release of its fiscal 2024 earnings on Aug. 1. The company reported a 4% year-over-year drop in net sales, to $7.1 billion, driven by lower volumes and unfavorable forex rates which was partially offset by a favorable price mix. Although Clorox reported a revenue drop in all its segments, the net sales drop in the Household and Lifestyle segments were much more noticeable which declined by as much as 7.1% to $2 billion and 4.7% to $1.3 billion respectively.

However, the company showcased robust improvement in profitability and exceeded analysts’ earnings expectations. Its gross margin expanded by a staggering 361 basis points to 43% and its net margin expanded by 193 basis points to 3.9%, translating into a massive 87.9% growth in net earnings to shareholders, reaching $280 million.

The consensus opinion on CLX stock is neutral, with an overall “Hold” rating. Out of the 20 analysts covering the stock, one recommends “Strong Buy,” 13 advise “Hold,” and six suggest a “Strong Sell” rating. While CLX currently trades above its mean price target of $154.50, the Street-high price target of $187 suggests an upside potential of 16.6%.

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On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.