CLOROX CO DE
For the period ended Mar 31, 2025. Filed May 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 5, 2025
CLX$99.96+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-02-03.
0000021076-25-000013
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-05.
0000021076-25-000023
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 142 previous paragraphs and 150 current paragraphs.
90 unchanged; 40 reworded; 18 added; 9 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
During the quarter, the United States announced trade policies which included new or increased tariffs on product imports from a wide range of countries. These and any future new or additional tariffs, as well as any associated retaliatory measures taken by other countries, may impact the macroeconomic environment, consumers, suppliers and the Company’s business. While the Company has and will continue to take action to mitigate such impacts, the Company anticipates the operating environment will remain volatile and challenging.
Current report
The effective tax rate on earnings (losses)was 24.8% and 26.9% for the current three and nine month periods, respectively, and (18.6)% and 41.9% for the prior three and nine month periods, respectively. The change in tax rate on earnings in the current three month period as compared to the prior period was primarily driven by the divestiture of the Argentina business and a legal entity reorganization both in the prior period. The change in tax rate on earnings in the current nine month period as compared to the prior period was primarily driven by the divestiture of the Argentina business and a legal entity reorganization both in the prior period, and the nondeductibility of the loss on the divestiture of the Better Health VMS business in the current period.
Current report
Diluted net earnings (losses) per share
Current report
Volume, net sales and segment adjusted EBIT increased by 7%, 3% and 10%, respectively, during the current three month period. The volume increase was primarily due to strong consumption supported by merchandising activities in Cleaning. The variance between volume and net sales was primarily due to unfavorable price mix. The increase in segment adjusted EBIT was primarily due to lower manufacturing and logistics costs, higher net sales and cost savings, partially offset by higher advertising investments.
Current report
Volume, net sales and segment adjusted EBIT decreased by 2%, 3% and 6%, respectively, during the current three month period. The volume decrease was primarily due to lower consumption. The decrease in segment adjusted EBIT was primarily due to lower net sales.
Current report
Both volume and net sales decreased by 15% during the current three month period, primarily due to the Argentina divestiture. Segment adjusted EBIT decreased by 18% during the current three month period, primarily due to the Argentina divestiture partially offset by cost savings.
Current report
Net cash provided by operations was $687 in the current nine month period, compared with $355 in the prior nine month period. The increase was primarily driven by higher cash earnings and lower tax payments in the current nine month period. The lower tax payments in the current nine month period are primarily driven by payment of fiscal year 2023 income taxes in fiscal year 2024 that were previously deferred as a result of the relief provided by the IRS announced in January 2023 due to winter storms in California.
Current report
As of March 31, 2025, current liabilities exceeded current assets by $565, primarily due to the Company's Glad venture agreement terminal obligation coming due for payment in January 2026. This balance was reclassified from Other liabilities to Accounts payable and accrued liabilities as it is reasonably expected to be settled within one year. The venture agreement terminal obligation is expected to be repaid through the Company’s anticipated ability to generate positive cash flows from operations in the future, access to capital markets enabled by our strong short-term and long-term credit ratings and current borrowing availability.
Current report
Venture Agreement
Current report
The Company has an agreement with The Procter & Gamble Company (P&G) for the Company’s Glad bags and wraps business. As of both March 31, 2025 and June 30, 2024, P&G had a 20% interest in the venture. This agreement is now scheduled to expire in January 2026 as the parties jointly did not opt to further extend the term of the agreement. Upon termination of the agreement, the Company is required to purchase P&G’s 20% interest for cash at fair value as established by predetermined valuation procedures.
Current report
The Company performed a valuation of the Glad bags and wraps business in the third quarter of fiscal year 2025 in connection with an update of the Company’s financial projections. As of March 31, 2025 the estimated fair value of P&G’s interest in the venture was $476, of which $515 was recognized and reflected in Accounts payable and accrued liabilities. As of June 30, 2024 the estimated fair value of P&G’s interest in the venture was $531, of which $510 was recognized and reflected in Other liabilities in the Company’s Condensed Consolidated Balance Sheet. The $55 decrease in the estimated fair value of P&G’s interest since June 30, 2024 was attributable to a decrease in the estimated future cash flows since the prior valuation, partially offset by a decrease in the discount rate. Changes in the judgments, assumptions and market factors used could result in significantly different estimates of fair value. The difference between the estimated fair value and the amount recognized, and any future changes in the fair value of P&G’s interest, is charged to Cost of products sold in accordance over the remaining life of the agreement.
Current report
FINANCIAL POSITION AND LIQUIDITY (Continued)
Current report
CRITICAL ACCOUNTING ESTIMATES
Current report
The methods, estimates and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results the Company reports in its consolidated financial statements. Accordingly, a different financial presentation could result depending on the judgments, estimates or assumptions that are used. The most critical accounting estimates are those that are most important to the portrayal of the Company’s financial condition and results, and require the Company to make the most difficult and subjective judgments, often estimating the outcome of future events that are inherently uncertain. As of March 31, 2025, there have been no significant changes to the Company’s critical accounting estimates since the preparation of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024, except as noted below:
Current report
Venture Agreement Terminal Obligation
Current report
The Company performed a valuation of the Glad bags and wraps business during the third quarter of fiscal year 2025 in connection with an update of the Company’s financial projections. As of March 31, 2025 the estimated fair value of P&G’s interest in the venture was $476, of which $515 was recognized and reflected in Accounts payable and accrued liabilities. As of June 30, 2024 the estimated fair value of P&G’s interest in the venture was $531, of which $510 was recognized and reflected in Other liabilities. See Notes to Condensed Consolidated Financial Statements for additional information on the Venture Agreement.
Current report
Fair value determination requires significant judgment, assumptions and market factors which are uncertain and subject to change. Changes in the judgments, assumptions and market factors used could result in significantly different estimates of fair value. For perspective, if the discount rate as of the third quarter of fiscal year 2025, the date of the most recent valuation performed, were to increase or decrease by 100 basis points, the estimated fair value of P&G’s interest would decrease by approximately $53 or increase by approximately $68, respectively. Such changes would affect the amount of future charges to Cost of products sold.
Current report
(1)Represents losses related to the divestiture of the Better Health VMS and Argentina businesses. 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. See Notes to Condensed Consolidated Financial Statements for additional information.
Removed paragraphs (9)
Previous report
The effective tax rate on earningswas 18.1% and 28.2% for the current three and six month periods, respectively, and 29.3% and 26.7% for the prior three and six month periods, respectively. The lower tax rate on earnings in the current three month period compared to the prior period was primarily driven by an international legal entity reorganization and higher compensation deductions in the current period.
Previous report
Diluted net earnings per share
Previous report
Volume, net sales and segment adjusted EBIT decreased by 11%, 13% and 25%, respectively, during the current three month period. The volume decrease was primarily due to lapping the impact of retail inventory restoration following the cyberattack. The variance between volume and net sales was primarily due to unfavorable mix. The decrease in segment adjusted EBIT was primarily due to lower net sales.
Previous report
Both volume and net sales decreased by 16%, and segment adjusted EBIT decreased by 36% during the current three month period. The volume decrease was primarily due to lapping the impact of retail inventory restoration following the cyberattack. The decrease in segment adjusted EBIT was primarily due to lower net sales.
Previous report
Both volume and net sales decreased by 12%, and segment adjusted EBIT decreased by 34% during the current three month period. The decrease in both volume and segment adjusted EBIT were primarily due to the Argentina divestiture.
Previous report
Net cash provided by operations was $401 in the current six month period, compared with $173 in the prior six month period. The increase was primarily driven by higher cash earnings, lower incentive compensation payments, and lower tax payments; partially offset by an increase in working capital all in the current six month period. The increase in working capital in the current six month period is primarily driven by an increase in inventory due to higher shipments in the prior six month period from the cyberattack recovery and an increase in accounts payable and accrued liabilities due to the timing of payments; partially offset by a decrease in accounts receivable due to higher sales in the prior six month period from the cyberattack recovery.
Previous report
The Company's current liabilities may periodically exceed current assets as a result of the Company's debt management policies, including the Company's use of commercial paper borrowings which fluctuates depending on the amount and timing of operating and investing cash flows and payments for shareholder transactions such as dividends and share repurchases.
Previous report
(1)Represents loss related to the divestiture of the Better Health VMS business. 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. See Notes to Condensed Consolidated Financial Statements for additional information.
Previous report
NON-GAAP FINANCIAL MEASURES (Continued)
Reworded paragraphs (40)
Previous wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to provide a reader of The Clorox Company’s (the Company or Clorox) financial statements with a narrative from the perspective of management on the Company’s financial condition, results of operations, liquidity and certain other factors that may affect future results. The following discussion of the Company’s financial condition and results of operations should be read in conjunction with MD&A and the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024, which was filed with the SEC on August 8, 2024, and the unaudited condensed consolidated financial statements and related notes contained in this Quarterly Report on Form 10-Q (this Report). Unless otherwise noted, MD&A compares the three and six month period ended December 31, 2024 (the current period) to the three and six month period ended December 31, 2023 (the prior period), with percentage and basis point calculations based on rounded numbers, except for per share data and the effective tax rate.
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to provide a reader of The Clorox Company’s (the Company or Clorox) financial statements with a narrative from the perspective of management on the Company’s financial condition, results of operations, liquidity and certain other factors that may affect future results. The following discussion of the Company’s financial condition and results of operations should be read in conjunction with MD&A and the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024, which was filed with the SEC on August 8, 2024, and the unaudited condensed consolidated financial statements and related notes contained in this Quarterly Report on Form 10-Q (this Report). Unless otherwise noted, MD&A compares the three and nine month period ended March 31, 2025 (the current period) to the three and nine month period ended March 31, 2024 (the prior period), with percentage and basis point calculations based on rounded numbers, except for per share data and the effective tax rate.
Previous wording
For the fiscal quarter ended December 31, 2024, the Company continues to monitor macroeconomic conditions as a result of elevated interest rates and volatility in capital markets. These evolving challenges contributed to a highly dynamic operating environment as the Company continued its efforts to drive growth, rebuild margins and drive its transformation.
Current wording
For the fiscal quarter ended March 31, 2025, the Company continues to monitor macroeconomic conditions as a result of volatility in capital markets and developments in international trade policy. These evolving challenges contributed to a highly dynamic operating environment as the Company continued its efforts to drive growth, rebuild margins and drive its transformation.
Previous wording
The risks of future negative impacts due to transportation, logistical or supply constraints and higher commodity costs for certain raw materials remain present, and the Company continues to experience corresponding incremental costs and gross margin pressures. For the remainder of fiscal year 2025, the Company anticipates the operating environment will remain volatile and challenging. While inflationary headwinds have moderated, consumers continue to feel pressure as continued macroeconomic uncertainty impacts spending.
Current wording
The risks of future negative impacts due to transportation, logistical or supply constraints and higher commodity costs for certain raw materials remain present, and the Company continues to experience corresponding incremental costs and gross margin pressures. While inflationary headwinds have moderated, consumers continue to feel pressure as continued macroeconomic uncertainty impacts spending.
Previous wording
The impact of continued volatility in macroeconomic conditions and geopolitical instability, including ongoing conflicts in the Middle East and Ukraine, rising tensions between China and Taiwan and actual and potential shifts in U.S. and foreign trade, economic and other policies, especially in light of the change in U.S. presidential administration, have increased global macroeconomic and political uncertainty regarding the duration and resolution of the conflicts, the potential escalation of tensions and potential economic and global trade and supply chain disruptions. These factors are difficult to predict considering the rapidly evolving landscape as the Company continues to expect a variable operating environment going forward.
Current wording
The impact of continued volatility in macroeconomic conditions and geopolitical instability, including ongoing conflicts in the Middle East and Ukraine, rising tensions between China and Taiwan and actual and potential shifts in U.S. and foreign trade, economic and other policies, have increased global macroeconomic and political uncertainty regarding the duration and resolution of the conflicts, the potential escalation of tensions and potential economic and global trade and supply chain disruptions. These factors are difficult to predict considering the rapidly evolving landscape as the Company continues to expect a variable operating environment going forward.
Previous wording
(1)The divestiture impact is calculated as net sales from the Argentina and Better Health VMS businesses after the respective sale dates in the three and six month year-ago periods.
Current wording
(1)The divestiture impact is calculated as net sales from the Argentina and Better Health VMS businesses after the respective sale dates in the three and nine month year-ago periods.
Previous wording
(2)This represents the net impact on net sales growth / (decrease) from pricing actions, mix, trade promotion spending, mix from acquisitions and divestitures and other factors. In the three months ended December 31, 2024, the impact from divestiture mix was 2% and 1% for International and Total Company, respectively. In the six months ended December 31, 2024, the impact from divestiture mix was 3% and 1% for International and Total Company, respectively.
Current wording
(2)This represents the net impact on net sales growth / (decrease) from pricing actions, mix, trade promotion spending, mix from acquisitions and divestitures and other factors. In the three months ended March 31, 2025, the impact from divestiture mix was 2% for both International and Total Company. In the nine months ended March 31, 2025, the impact from divestiture mix was 3% and 1% for International and Total Company, respectively.
Previous wording
(4)Organic volume represents volume excluding the effect of any acquisitions and divestitures. In the three months ended December 31, 2024, the volume impact of divestitures was (18)% and (7)% for International and Total Company, respectively. In the six months ended December 31, 2024, the volume impact of divestitures was (17)% and (6)% for International and Total Company, respectively.
Current wording
(4)Organic volume represents volume excluding the effect of any acquisitions and divestitures. In the three months ended March 31, 2025, the volume impact of divestitures was (16)% and (7)% for International and Total Company, respectively. In the nine months ended March 31, 2025, the volume impact of divestitures was (17)% and (6)% for International and Total Company, respectively.
Previous wording
Net salesand volume in the current three month period both decreased by 15%, primarily due to lapping the impact of retail inventory restoration following the August 2023 cyberattack and the divestitures of the Better Health VMS and Argentina businesses.
Current wording
Net salesand volume in the current three month period decreased by 8% and 7%, respectively, primarily due to the divestitures of the Better Health VMS and Argentina businesses.
Previous wording
Net sales and volume in the current six month period both increased by 2%, primarily due to lapping impacts from the August 2023 cyberattack and retail inventory restoration, partially offset by the divestitures of the Better Health VMS and Argentina businesses.
Current wording
Net sales and volume in the current nine month period both decreased by 1%, primarily due to the divestitures of the Better Health VMS and Argentina businesses, partially offset by lapping impacts from the cyberattack and retail inventory restoration.
Previous wording
Gross margin increased by 340 basis points in the current six month period from 41.4% to 44.8%. The increase was primarily driven by cost savings, higher volume and the benefits from the divestitures of the Better Health VMS and Argentina businesses.
Current wording
Gross margin increased by 240 basis points in the current three month period from 42.2% to 44.6%. The increase was primarily driven by cost savings and the benefits from the divestitures of the Better Health VMS and Argentina businesses.
Previous wording
Gross margin increased by 30 basis points in the current three month period from 43.5% to 43.8%. The increase was primarily driven by cost savings and the benefits from the divestitures of the Better Health VMS and Argentina businesses, partially offset by lower volume and higher manufacturing and logistics costs.
Current wording
Gross margin increased by 300 basis points in the current nine month period from 41.7% to 44.7%. The increase was primarily driven by cost savings, and the net impacts of higher volume and the divestitures of the Better Health VMS and Argentina businesses, partially offset by unfavorable mix.
Previous wording
Selling and administrative expenses, as a percentage of net sales, increased by 40 basis points and decreased by 140 basis points in the current three and six month periods, respectively, while dollars decreased in both the current three and six month periods. The dollar decrease in selling and administrative expenses in the current three month period was primarily due to incremental costs resulting from the cyberattack in the prior period and the impact from the divestitures in the current period. The dollar decrease in selling and administrative expenses in the current six month period was primarily due to incremental costs resulting from the cyberattack and an arbitral decision related to a commercial dispute in the prior period. For further information on the cyberattack, see Notes to Condensed Consolidated Financial Statements.
Current wording
Selling and administrative expenses, as a percentage of net sales, decreased by 60 basis points and 110 basis points in the current three and nine month periods, respectively, versus the prior periods. The dollar decrease in selling and administrative expenses in the current three month period was primarily due to the impact from the divestitures and lower incentive compensation expense in the current period. The dollar decrease in selling and administrative expenses in the current nine month period was primarily due to the impact from divestitures in the current period and incremental costs resulting from the cyberattack in the prior period. For further information on the cyberattack, see Notes to Condensed Consolidated Financial Statements.
Previous wording
Advertising costs, as a percentage of net sales, increased by 200 basis and 100 basis points in the current three and six month periods, respectively, versus the prior periods. The dollar increase in advertising costs reflects the Company’s continued support behind its brands. The Company’s U.S. retail advertising spend as a percentage of net sales increased from 10% to 12% versus the prior three month period.
Current wording
Advertising costs, as a percentage of net sales, increased by 50 basis and 80 basis points in the current three and nine month periods, respectively, versus the prior periods. The increase in advertising costs reflects the Company’s continued support behind its brands. The Company’s U.S. retail advertising spend as a percentage of net sales increased from 12% to 14% versus the prior three month period.
Previous wording
Research and development costs, both as a percentage of net sales and dollars, were essentially flat in both the current three and six month period as compared to the prior periods. The Company continues to invest behind product innovation and cost savings.
Current wording
Research and development costs, as a percentage of net sales, decreased by 20 basis points in the current three month period and were essentially flat in the current nine month period as compared to the prior periods, while dollars decreased in both periods. The Company continues to invest behind product innovation and cost savings.
Previous wording
Loss on divestiture, pension settlement charge, interest expense, other (income) expense, net and the effective tax rate on earnings
Current wording
Loss on divestiture, pension settlement charge, interest expense, other (income) expense, net and the effective tax rate on earnings (losses)
Previous wording
Loss on divestiture of $118 in the current six month period reflects the loss on the divestiture of the Better Health VMS business. See Notes to Condensed Consolidated Financial Statements for further information.
Current wording
Loss on divestiture of $240 in the prior three and nine month periods reflected the loss on the divestiture of the Argentina business. The loss on divestiture of $118 in the current nine month period reflects the divestiture of the Better Health VMS business. See Notes to Condensed Consolidated Financial Statements for further information.
Previous wording
Pension settlement chargeof $171 in both the prior three and six month periods reflected the settlement of the domestic qualified pension plan. See Notes to Condensed Consolidated Financial Statements for further information.
Current wording
Pension settlement chargeof $171 in the prior nine month period reflected the settlement of the domestic qualified pension plan. See Notes to Condensed Consolidated Financial Statements for further information.
Previous wording
Other (income) expense, net was ($23) and ($7) in the current and prior three month periods, respectively, and ($45) and $5 in the current and prior six month periods, respectively. The variance between the current and prior three month periods was primarily due to the benefit of insurance recoveries related to the cyberattack in the current period. The variance between the current and prior six month periods was primarily due to the benefit of insurance recoveries related to the cyberattack in the current period and unfavorable foreign exchange rates primarily related to Argentina in the prior period. For further information on the cyberattack, see Notes to Condensed Consolidated Financial Statements.
Current wording
Other (income) expense, net was ($34) and ($2) in the current and prior three month periods, respectively, and ($79) and $3 in the current and prior nine month periods, respectively. The variance between the current and prior three month periods was primarily due to the benefit of insurance recoveries related to the cyberattack in the current period. The variance between the current and prior nine month periods was primarily due to the benefit of insurance recoveries related to the cyberattack in the current period and unfavorable foreign exchange rates primarily related to Argentina in the prior period. For further information on the cyberattack, see Notes to Condensed Consolidated Financial Statements.
Previous wording
Diluted net earnings per share (EPS) increased by $0.79, or 105%, in the current three month period, primarily due to the pension settlement charge and cyberattack expenses in the prior period, and the benefits of cyberattack insurance recoveries and cost savings in the current period, partially offset by lower net sales in the current period.
Current wording
Diluted net earnings (losses) per share (EPS) increased by $1.91, or 466%, in the current three month period, primarily due to the loss relating to the Argentina divestiture in the prior period, higher gross margin and the benefits of cyberattack insurance recoveries in the current period, partially offset by lower net sales in the current period.
Previous wording
Diluted EPS increased by $1.42, or 154%, in the current six month period, primarily due to the pension settlement charge in the prior period and higher net sales, the benefits of cyberattack insurance recoveries and cost savings in the current period, partially offset by the loss relating to the divestiture of the Better Health VMS business and higher advertising investments in the current period.
Current wording
Diluted EPS increased by $3.32, or 638%, in the current nine month period, primarily due to losses on the divestiture of the Argentina business and pension settlement charge in the prior period and the net impacts of higher volume and the divestitures of the Better Health VMS and Argentina businesses, the benefits of cyberattack insurance recoveries and cost savings in the current period, partially offset by the loss relating to the divestiture of the Better Health VMS business, unfavorable mix and higher advertising investments all in the current period.
Previous wording
Volume, net sales and segment adjusted EBIT increased by 10%, 8% and 18%, respectively, during the current six month period. The volume increase was primarily due to lapping impacts from the cyberattack and retail inventory restoration. The variance between volume and net sales was primarily due to unfavorable mix. The increase in segment adjusted EBIT in the current period was primarily due to higher net sales and cost savings.
Current wording
Volume, net sales and segment adjusted EBIT increased by 9%, 7% and 15%, respectively, during the current nine month period. The volume increase was primarily due to lapping impacts from the cyberattack and retail inventory restoration. The variance between volume and net sales was primarily due to unfavorable price mix. The increase in segment adjusted EBIT in the current period was primarily due to higher net sales, cost savings and lower manufacturing and logistics costs, partially offset by higher advertising investments.
Previous wording
Both volume and net sales decreased by 11%, and segment adjusted EBIT decreased by 48% during the current three month period. The volume decrease was primarily due to lapping the impact of retail inventory restoration following the cyberattack. The decrease in segment adjusted EBIT was mainly due to lower net sales and higher manufacturing and logistics costs, partially offset by cost savings.
Current wording
Volume, net sales and segment adjusted EBIT decreased by 9%, 11% and 18%, respectively, during the current three month period. The volume decrease was primarily due to lower consumption and the timing of shipments in Grilling. The variance between volume and net sales was primarily due to unfavorable price mix. The decrease in segment adjusted EBIT was mainly due to lower net sales partially offset by cost savings.
Previous wording
Volume, net sales and segment adjusted EBIT increased by 10%, 8%, and 23% respectively, during the current six month period. The volume increase was primarily due to lapping impacts from the cyberattack and retail inventory restoration. The variance between volume and net sales was primarily due to unfavorable mix. The increase in segment adjusted EBIT was mainly due to cost savings and higher net sales, partially offset by higher advertising investments, unfavorable commodity costs and higher manufacturing and logistics costs.
Current wording
Volume, net sales and segment adjusted EBIT increased by 2%, 1% and 4%, respectively, during the current nine month period. The volume increase was primarily due to lapping impacts from the cyberattack and retail inventory restoration. The increase in segment adjusted EBIT was mainly due to cost savings and higher volume, partially offset by both unfavorable mix and commodity costs.
Previous wording
Volume, net sales and segment adjusted EBIT increased by 5%, 4% and 6% respectively, during the current six month period. The volume increase was primarily due to lapping impacts from the cyberattack and retail inventory restoration. The variance between volume and net sales was mainly due to unfavorable mix. The increase in segment adjusted EBIT was primarily due to higher net sales, partially offset by higher advertising investments.
Current wording
Volume increased by 3% and both net sales and segment adjusted EBIT increased by 2%, during the current nine month period. The volume increase was primarily due to lapping impacts from the cyberattack and retail inventory restoration. The increase in segment adjusted EBIT was primarily due to favorable commodity costs and higher net sales, partially offset by higher advertising investments.
Previous wording
Volume, net sales and segment adjusted EBIT decreased by 9%, 8% and 15% respectively, in the current six month period. The volume decrease was primarily due to the Argentina divestiture partially offset by lapping impacts from the cyberattack and retail inventory restoration. The variance between volume and net sales was mainly due to favorable price mix, partially offset by unfavorable foreign exchange rates. The decrease in segment adjusted EBIT was primarily due to the Argentina divestiture.
Current wording
Both volume and net sales decreased by 11% and segment adjusted EBIT decreased by 16% in the current nine month period. The volume decrease was primarily due to the Argentina divestiture partially offset by lapping impacts from the cyberattack and retail inventory restoration. The decrease in segment adjusted EBIT was primarily due to the Argentina divestiture.
Previous wording
Net sales decreased by 100% and 66% in the current three and six month periods, respectively, due to the divestiture of the Better Health VMS business in the first quarter of fiscal year 2025.
Current wording
Net sales decreased by 100% and 77% in the current three and nine month periods, respectively, due to the divestiture of the Better Health VMS business in the first quarter of fiscal year 2025.
Previous wording
Segment adjusted EBIT increased by 30% and 18% in the current three and six month periods, respectively. The increase in segment adjusted EBIT in the current three month period was primarily due to foreign exchange losses on Corporate and Other assets related to operations in Argentina in the prior period and lower Better Health VMS operating expenses in the current period due to the divestiture. The increase in segment adjusted EBIT in the current six month period was primarily due to foreign exchange losses on Corporate and Other assets related to operations in Argentina in the prior period.
Current wording
Segment adjusted EBIT increased by 21% and 19% in the current three and nine month periods, respectively. The increase in segment adjusted EBIT in the current three month period was primarily due to lower Better Health VMS operating expenses in the current period due to the divestiture. The increase in segment adjusted EBIT in the current nine month period was primarily due to foreign exchange losses on Corporate and Other assets related to operations in Argentina in the prior period and lower Better Health VMS operating expenses in the current period due to the divestiture.
Previous wording
standards. The Company’s operating cash flows are directly impacted as a result of the extension of payment terms with suppliers. There would not be an expected material impact to the Company’s liquidity or capital resources if the financial institution or a supplier terminated the SCF arrangement. While the Company does not have direct access to information on, or influence over, which invoices a participating supplier elects to sell to the financial institution, the Company expects that the majority of these amounts have been sold to the financial institution. Refer to the Notes to Condensed Consolidated Financial Statements for detail on the SCF program.
Current wording
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. There would not be an expected material impact to the Company’s liquidity or capital resources if the financial institution or a supplier terminated the SCF arrangement. While the Company does not have direct access to information on, or influence over, which invoices a participating supplier elects to sell to the financial institution, the Company expects that the majority of these amounts have been sold to the financial institution. Refer to the Notes to Condensed Consolidated Financial Statements for detail on the SCF program.
Previous wording
Net cash provided by investing activities was $35 in the current six month period, compared with net cash used of $56 in the prior six month period. The year-over-year change was mainly due to net proceeds from the sale of the Better Health VMS business in the current six month period partially offset by the cash proceeds from a sale-leaseback transaction in the prior six month period.
Current wording
Net cash used for investing activities was $18 in the current nine month period, compared with $94 in the prior nine month period. The year-over-year change was mainly due to net proceeds from the sale of the Better Health VMS business in the current nine month period.
Previous wording
Net cash used by financing activities was $346 in the current six month period, compared with $104 in the prior six month period. The year-over-year change was mainly due to higher treasury stock purchases in the current six month period.
Current wording
Net cash used for financing activities was $645 in the current nine month period, compared with $382 in the prior nine month period. The year-over-year change was mainly due to higher treasury stock purchases in the current nine month period.
Previous wording
Notwithstanding potential unforeseen adverse market conditions and as part of the Company’s regular assessment of its cash needs, the Company believes it will have the funds necessary to support its short- and long-term liquidity and operating needs, including its digital capabilities and productivity enhancements investment based on its anticipated ability to generate positive cash flows from operations in the future, access to capital markets enabled by our strong short-term and long-term credit ratings and current borrowing availability.
Current wording
Notwithstanding potential unforeseen adverse market conditions and as part of the Company’s regular assessment of its cash needs, the Company believes it will have the funds necessary to support its short- and long-term liquidity and operating needs, including its digital capabilities and productivity enhancements investment and venture agreement terminal obligation based on its anticipated ability to generate positive cash flows from operations in the future, access to capital markets enabled by our strong short-term and long-term credit ratings and current borrowing availability.
Previous wording
As of December 31, 2024 the Company maintained a $1,200 revolving credit agreement that matures in March 2027 (the Credit Agreement). There were no borrowings under the Credit Agreement as of both December 31, 2024 and June 30, 2024, and the Company believes that borrowings under the Credit Agreement are and will continue to be available for general corporate purposes. The Credit Agreement includes certain restrictive covenants and limitations. The primary restrictive covenant is a minimum ratio of 4.0, calculated as total earnings before interest, taxes, depreciation and amortization and other similar noncash charges and certain other items (Consolidated EBITDA) to total interest expense for the trailing four quarters (Interest Coverage ratio), as defined and described in the Credit Agreement.
Current wording
On March 25, 2025, the Company entered into a new $1,200 revolving credit agreement (the Credit Agreement) that matures in March 2030. The Credit Agreement replaced a prior $1,200 revolving credit agreement (the Prior Credit Agreement) in place since March 2022. The Company did not incur any termination fees or penalties in connection with entering the new agreement, which was considered a debt modification. There were no borrowings under either the Credit Agreement or the Prior Credit Agreement as of both March 31, 2025 and June 30, 2024, and the Company believes that borrowings under the Credit Agreement are and will continue to be available for general corporate purposes. The Credit Agreement includes certain restrictive covenants and limitations. The primary restrictive covenant is a minimum ratio of 4.0, calculated as total earnings before interest, taxes, depreciation and amortization and other similar noncash charges and certain other items (Consolidated EBITDA) to total interest expense for the trailing four quarters (Interest Coverage ratio), as defined and described in the Credit Agreement.
Previous wording
As of December 31, 2024, the Company maintained $34 of foreign and other credit lines, of which $6 was outstanding.
Current wording
As of March 31, 2025, the Company maintained $34 of foreign and other credit lines, of which $7 was outstanding.
Previous wording
As of December 31, 2024, the Company had two stock repurchase programs: an open-market purchase program with an authorized aggregate purchase amount of up to $2,000, which has no expiration date, and a program to offset the anticipated impact of dilution related to stock-based awards (the Evergreen Program), which has no authorization limit on the dollar amount and no expiration date. During the three and six months ended December 31, 2024, the Company repurchased 906 and 1,695 thousand shares of common stock at a cost of $150 and $257, respectively. There were no share repurchases of common stock during both the three and six months ended December 31, 2023.
Current wording
As of March 31, 2025, the Company had two stock repurchase programs: an open-market purchase program with an authorized aggregate purchase amount of up to $2,000, which has no expiration date, and a program to offset the anticipated impact of dilution related to stock-based awards (the Evergreen Program), which has no authorization limit on the dollar amount and no expiration date. During the three and nine months ended March 31, 2025, the Company repurchased 0 and 1,695 thousand shares of common stock at a cost of $0 and $257, respectively. There were no share repurchases of common stock during both the three and nine months ended March 31, 2024.
Previous wording
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 earnings before income taxes for purposes of disclosing adjusted EBIT over the course of the next five years. About
Current wording
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 earnings before income taxes for purposes of disclosing adjusted EBIT over the course of the next five years. 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.
Previous wording
During the three and six months ended December 31, 2024, the Company incurred approximately $26 and $55, respectively, and during the three and six months ended December 31, 2023, the Company incurred approximately $32 and $59, respectively, of operating expenses related to its digital capabilities and productivity enhancements investment. The expenses relate to the following:
Current wording
During the three and nine months ended March 31, 2025, the Company incurred approximately $26 and $81, respectively, and during the three and nine months ended March 31, 2024, the Company incurred approximately $26 and $85, respectively, of operating expenses related to its digital capabilities and productivity enhancements investment. The expenses relate to the following:
Previous wording
(2)The divestiture impact is calculated as net sales from the Argentina and Better Health VMS businesses after the respective sale dates in the three and six month year-ago periods.
Current wording
(2)The divestiture impact is calculated as net sales from the Argentina and Better Health VMS businesses after the respective sale dates in the three and nine month year-ago periods.
Previous wording
•unfavorable general economic and geopolitical conditions beyond the Company’s 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 in U.S. and foreign trade policies, including as a result of escalating trade tensions between the U.S. and its trading partners, especially China;
Current wording
•unfavorable general economic and geopolitical conditions beyond the Company’s 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 in U.S. and foreign trade policies, including as a result of escalating trade tensions and tariffs between the U.S. and its trading partners, especially China;
Previous wording
•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;
Current wording
•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, and the timing and volume of shipment movement related to our ERP transition;
Previous wording
•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 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; 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;
Current wording
•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 policy and tariffs, travel or immigration restrictions, new or additional tariffs, and price or other controls; labor claims and civil unrest; potential operational 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; 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;
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
See Notes to Condensed Consolidated Financial Statements for further information.
Current report — wording carried from elsewhere
(1)Total Company includes Corporate and Other. Corporate and Other includes the results of the Better Health VMS business through the date of divestiture.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
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
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
(1)Total Company includes Corporate and Other.