CLOROX CO /DE/
For the period ended Sep 30, 2025. Filed Nov 3, 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.
Sep 30, 2025 · Filed Nov 3, 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 2025-03-31; filed 2025-05-05.
0000021076-25-000023
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-03.
0000021076-25-000053
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 150 previous paragraphs and 136 current paragraphs.
73 unchanged; 44 reworded; 16 added; 32 removed; 1 previous and 3 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 (16)
Current report
The Company's transformation efforts continued into fiscal year 2026. The Company has begun transitioning core U.S. operations to the new enterprise resource planning system (ERP) as part of the continuing phased implementation of its technology transformation. As expected, the Company is in the stabilization phase and has experienced some sales timing impacts in the current and previous quarter. The Company remains on track to complete implementation this fiscal year. The total incremental transformational investment is expected to be approximately $580 million. The digital foundation provided by the Company’s new ERP supports its long-term financial goals through modernized capabilities that accelerate growth and deliver stronger efficiencies.
Current report
For the remainder of fiscal year 2026, the Company anticipates that the operating environment will remain volatile and challenging as consumers may face greater pressure as continued macroeconomic uncertainty impacts spending. The Company will continue to invest in its brands, capabilities and people to deliver consistent, profitable growth over time.
Current report
Net salesand volume in the current period decreased by 19% and 18%, respectively, driven by lower shipments in the current period following the incremental shipments related to the ERP transition in the fourth quarter of fiscal year 2025.
Current report
Gross margin decreased by 410 basis points in the current period from 45.8% to 41.7%. The decrease was primarily driven by lower volume and higher manufacturing and logistics costs, partially offset by cost savings.
Current report
Selling and administrative expenses, as a percentage of net sales, increased by 350 basis points, while dollars were essentially flat in the current period versus the prior period. The increase in selling and administrative expenses as a percentage of net sales was primarily due to lower net sales in the current period related to the ERP transition.
Current report
The effective tax rate on earningswas 23.4%and 41.8% for the current and prior periods, respectively.The higher tax rate in the prior period as compared to the current period was primarily driven by the nondeductibility of the loss on the divestiture of the Better Health VMS business in the prior period.
Current report
Diluted net earnings per share
Current report
Volume, net sales and segment adjusted EBIT decreased by 16%, 19% and 47%, respectively, during the current period. The volume decrease was primarily due to lower shipments in the current period following the incremental shipments related to the ERP transition in the fourth quarter of fiscal year 2025. The variance between volume and net sales was primarily due to unfavorable price mix. The decrease in segment adjusted EBIT was primarily due to lower net sales and higher manufacturing and logistics costs.
Current report
Volume, net sales and segment adjusted EBIT decreased by 18%, 19% and 55%, respectively, during the current period. The volume decrease was primarily due to lower shipments in the current period following the incremental shipments related to the ERP transition in the fourth quarter of fiscal year 2025. The decrease in segment adjusted EBIT was mainly due to lower net sales.
Current report
Both volume and net sales decreased by 2%, and segment adjusted EBIT decreased by 46% during the current period. The volume decrease was primarily due to lower shipments in the current period following the incremental shipments related to the ERP transition in the fourth quarter of fiscal year 2025. The decrease in segment adjusted EBIT was primarily due to higher manufacturing and logistics costs.
Current report
Net sales decreased by 89% in the current three month period due to the divestiture of the Better Health VMS business in the first quarter of fiscal year 2025.
Current report
Net cash provided by operations was $93 in the current three month period, compared with $221 in the prior three month period. The decrease was primarily driven by lower cash earnings partially offset by lower working capital in the current three month period (lower Accounts receivable and higher Accounts payable and accrued liabilities partially offset by higher Inventories). The lower cash earnings, lower Accounts receivable balance and higher inventories balance were primarily due to the lower shipments in the current three month period following the incremental shipments related to the ERP transition in the fourth quarter of fiscal year 2025. The higher Accounts payable and accrued liabilities balance was due to the timing of payments.
Current report
(1)Represents the loss related to the divestiture of the Better Health VMS business.
Current report
NON-GAAP FINANCIAL MEASURES (Continued)
Current report
•the impact of market and category declines, and the Company’s product and geographic mix on its ability to meet sales growth targets;
Current report
•the impact of climate change and other sustainability issues on sales, operating costs, reputation or stakeholder relationships;
Removed paragraphs (32)
Previous report
The Company will continue to invest in its brands, capabilities and people to deliver consistent, profitable growth over time. The Company completed implementation of the new streamlined operating model in fiscal year 2024, which continues to generate annual cost savings in fiscal year 2025 and beyond. The recent divestitures of the Company’s Argentina and Better Health VMS businesses reflect its commitment to continue evolving its portfolio to reduce volatility, accelerate sales growth and structurally improve margins.
Previous report
The Company has recovered from the August 2023 cyberattack which had significant impacts to its operations and results in fiscal year 2024. For further information on the incident, see Notes to Condensed Consolidated Financial Statements.
Previous report
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 report
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 report
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 report
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 report
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 report
RESULTS OF OPERATIONS (Continued)
Previous report
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 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.
Previous report
Diluted net earnings (losses) per share
Previous report
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 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.
Previous report
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 report
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 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.
Previous report
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 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.
Previous report
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 report
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 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.
Previous report
CRITICAL ACCOUNTING ESTIMATES
Previous 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:
Previous report
Venture Agreement Terminal Obligation
Previous 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.
Previous 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.
Previous report
(2)Represents costs related to the settlement of the domestic qualified pension plan. 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
(3)Represents incremental costs and insurance recoveries incurred as a result of the August 2023 cyberattack the Company experienced beginning in the first quarter of fiscal year 2024. Due to the nature, scope and magnitude of these costs and recoveries, 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
(4)Represents restructuring and related implementation costs, net for the streamlined operating model. 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. See Notes to Condensed Consolidated Financial Statements for additional information.
Previous report
•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;
Previous report
•the impact of Environmental, Social, and Governance (ESG) issues, including those related to climate- related transition risks, changing consumer preferences, including the environmental impact of the Company’s products and sustainability on sales, operating costs or reputation;
Previous report
•risks related to any litigation associated with the exclusive forum provision in the Company’s bylaws.
Reworded paragraphs (44)
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 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.
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 condensed consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025, which was filed with the SEC on August 8, 2025, 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 month period ended September 30, 2025 (the current period) to the three month period ended September 30, 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
The Clorox Company is a leading multinational manufacturer and marketer of consumer and professional products with approximately 7,400 employees worldwide. The Company has operations in approximately 25 countries or territories and sells its products in more than 100 markets, primarily through mass retailers; grocery outlets; warehouse clubs; dollar stores; home hardware centers; drug, pet and military stores; third-party and owned e-commerce channels; and distributors. Clorox markets some of the most trusted and recognized consumer brand names, including its namesake bleach, cleaning and disinfecting products, Pine-Sol® and Tilex® cleaners; Liquid-Plumr® clog removers; Poett® home care products; Glad® bags and wraps; Fresh Step® cat litter; Kingsford® grilling products; Hidden Valley® dressings, dips, seasonings and sauces; Brita® water-filtration products; and Burt’s Bees® natural personal care products. The Company also markets industry-leading products and technologies for professional customers, including those sold under the CloroxPro™ and Clorox Healthcare®brand names.
Current wording
The Clorox Company is a leading multinational manufacturer and marketer of consumer and professional products with approximately 7,600 employees worldwide. The Company has operations in approximately 25 countries or territories and sells its products in approximately 100 markets, primarily through mass retailers; grocery outlets; warehouse clubs; dollar stores; home hardware centers; drug, pet and military stores; third-party and owned e-commerce channels; and distributors. Clorox markets some of the most trusted and recognized consumer brand names, including its namesake bleach, cleaning and disinfecting products, Pine-Sol® and Tilex® cleaners; Liquid-Plumr® clog removers; Poett® home care products; Glad® bags and wraps; Fresh Step® cat litter; Kingsford® grilling products; Hidden Valley® dressings, dips, seasonings and sauces; Brita® water-filtration products; and Burt’s Bees® natural personal care products. The Company also markets industry-leading products and technologies for professional customers, including those sold under the CloroxPro™ and Clorox Healthcare®brand names.
Previous wording
•Health and Wellness consists of cleaning, disinfecting and professional products mainly marketed and sold in the United States. Products within this segment include home care cleaning products and laundry additives primarily under the Clorox®, Clorox2®, Pine-Sol, Scentiva®, Tilex, Liquid-Plumr, and Formula 409® brands; professional cleaning and disinfecting products under the CloroxPro and Clorox Healthcare brands; and professional food service products under the Hidden Valley brand.
Current wording
•Health and Wellness consists of cleaning, disinfecting and professional products marketed and sold in the United States. Products within this segment include home care, cleaning and disinfecting products and laundry additives, primarily under the Clorox®, Clorox2®, Pine-Sol, Scentiva®, Tilex, Liquid-Plumr, and Formula 409® brands; professional cleaning and disinfecting products under the CloroxPro and Clorox Healthcare brands; and professional food service products under the Hidden Valley brand.
Previous wording
•International consists of products sold outside the United States. Products within this segment include laundry additives; home care products; bags and wraps; cat litter; water-filtration products; professional cleaning and disinfecting products; natural personal care products; food; grilling products and digestive health products marketed primarily under the Clorox, Glad, Poett, Brita, Burt’s Bees, Pine-Sol, Ever Clean®, Clorinda®, Chux and Fresh Step brands.
Current wording
•International consists of products sold outside the United States. Products within this segment include laundry additives and home care products, primarily marketed under the Clorox, Poett, Pine-Sol and Clorinda brands; bags and wraps under the Glad brand; cat litter, primarily marketed under the Ever Clean®and Fresh Step brands and water-filtration products marketed under the Brita brand.
Previous wording
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 wording
While inflationary headwinds have moderated, consumers continue to feel pressure as continued macroeconomic uncertainty impacts spending and prices remain elevated. United States trade policies continue to evolve, including new or increased tariffs on product imports from certain 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. Though the Company has and will continue to take action to mitigate such impacts, the Company anticipates that the operating environment will remain volatile and challenging.
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, 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, the potential for escalation in hostilities between the U.S. and Iran, and rising tensions between China and Taiwan, 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
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.
Current wording
The Company has not experienced significant disruptions in its operations during the first quarter of fiscal year 2026. However, 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.
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 nine month year-ago periods.
Current wording
(1)The divestiture impact is calculated as net sales from the Better Health VMS business after the sale date in the three month year-ago period.
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 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.
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 September 30, 2025, the impact from divestiture mix was 1% for Total Company.
Previous 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.
Current wording
(4)Organic volume represents volume excluding the effect of any acquisitions and divestitures. In the three months ended September 30, 2025, the volume impact of divestitures was (3)% for Total Company.
Previous 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.
Current wording
Advertising costs, as a percentage of net sales, increased by 20 basis points in the current period versus the prior period, while dollars decreased. The increase in advertising costs as a percentage of net sales was primarily due to lower net sales in the current period related to the ERP transition. The Company continues to support its brands. The Company’s U.S. retail advertising investments as a percentage of net sales increased from 12% to 13% versus the prior period.
Previous 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.
Current wording
Research and development costs, as a percentage of net sales, increased by 20 basis points in the current period as compared to the prior period, while dollars were essentially flat. The increase in research and development costs as a percentage of net sales was primarily due to lower net sales in the current period related to the ERP transition. The Company continues to invest in 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 (losses)
Current wording
Loss on divestiture, interest expense, other (income) expense, net and the effective tax rate on earnings
Previous 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.
Current wording
Loss on divestiture of $118 in the prior period reflected the loss on the divestiture of the Better Health VMS business. See notes to condensed consolidated financial statements for further information.
Previous 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.
Current wording
Other (income) expense, net was ($5) and ($22) in the current and prior periods, respectively. The variance between the current and prior periods was primarily due to lapping the benefit of insurance recoveries mainly related to the cyberattack in fiscal year 2024.
Previous 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.
Current wording
Diluted net earnings per share (EPS) decreased by $0.15, or 19%, in the current period, primarily due to lower net sales in the current period, partially offset by the loss relating to the divestiture of the Better Health VMS business in the prior period.
Previous wording
The following presents the results of the Company’s reportable segments and Corporate and Other. See Notes to Condensed Consolidated Financial Statements for further discussion of the principal measure of segment profitability used by management, segment adjusted earnings before interest and income taxes (segment adjusted EBIT):
Current wording
The following presents the results of the Company’s reportable segments and Corporate and Other. See notes to condensed consolidated financial statements for further discussion of the principal measure of segment profitability used by management, segment adjusted earnings (losses) before interest and income taxes (segment adjusted EBIT):
Previous 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.
Current wording
Volume, net sales and segment adjusted EBIT decreased by 22%, 23% and 42%, respectively, during the current period. The volume decrease was primarily due to lower shipments in the current period following the incremental shipments related to the ERP transition in the fourth quarter of fiscal year 2025. The decrease in segment adjusted EBIT was primarily due to lower net sales, partially offset by lower advertising investments as compared to the prior period.
Previous wording
Corporate and Other includes certain non-allocated administrative costs, the Better Health VMS business through the date of divestiture and various other non-operating income and expenses.
Current wording
Corporate and Other includes certain non-allocated administrative and other costs, various other non-operating income and expenses, as well as the results of the Better Health VMS business, through the date of divestiture.
Previous 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.
Current wording
Segment adjusted EBIT increased by 25% in the current three month period. The increase in segment adjusted EBIT in the current three month period was primarily due to reductions in employee related expenses primarily due to lower employee incentive compensation and lower Better Health VMS operating expenses in the current period due to the divestiture.
Previous wording
On September 10, 2024, the Company completed the divestiture of its Better Health VMS business. See Notes to Condensed Consolidated Financial Statements for further information.
Current wording
In the first quarter of fiscal year 2025, the Company completed the divestiture of its Better Health VMS business. See notes to condensed consolidated financial statements for further information.
Previous 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.
Current wording
Net cash used for investing activities was $34 in the current three month period, compared with net cash proceeds of $89 in the prior three month period. The year-over-year change was mainly due to net proceeds from the sale of the Better Health VMS business in the prior three month period.
Previous 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.
Current wording
Net cash used for financing activities was $59 in the current three month period, compared with $237 in the prior three month period. The year-over-year change was mainly due to higher cash sourced from short term borrowings in the current three month period.
Previous wording
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 wording
As of September 30, 2025, current liabilities exceeded current assets by $539, primarily due to the Company's Glad venture agreement terminal obligation coming due for payment in January 2026. This balance is classified within 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.
Previous wording
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 wording
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 September 30, 2025 and June 30, 2025 the estimated fair value of P&G’s interest in the venture was $476, of which $488 and $501, respectively, was recognized and reflected in Accounts payable and accrued liabilities in the Company’s condensed consolidated balance sheet. 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 with the effective interest method over the remaining life of the agreement. Following termination, the Glad business will retain the exclusive core intellectual property licenses contributed by P&G on a royalty-free basis for the licensed products marketed.
Previous 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.
Current wording
As of September 30, 2025, the Company maintained a $1,200 revolving credit agreement that matures in March 2030 (the Credit Agreement). There were no borrowings under the Credit Agreement as of both September 30, 2025 and June 30, 2025, 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 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.
Current wording
As of September 30, 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 months ended September 30, 2025 and 2024, the Company repurchased 1,048 and 789 thousand shares of common stock at a cost of $129 and $107, respectively.
Previous wording
Adjusted earnings (losses) before interest and income taxes (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 and insurance recoveries related to the August 2023 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). 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 is useful to investors to assess operating performance on a consistent basis by removing the impact of the items that management believes does not directly reflect the performance of each segment's underlying operations. Adjusted EBIT margin is the ratio of adjusted EBIT to net sales.
Current wording
The Company uses this measure to assess the operating results and performance of its segments, monitor actual results as compared to plan, perform analytical comparisons, identify strategies to improve performance, and allocate resources to each segment. Management believes that the presentation of adjusted EBIT is useful to investors to assess operating performance on a consistent basis by removing the impact of the items that management believes does not directly reflect the performance of each segment's underlying operations. It also allows investors to view underlying operating results in the same manner as they are viewed by Company management. Adjusted EBIT margin is the ratio of adjusted EBIT to net sales.
Previous wording
(5)Represents expenses related to the Company's digital capabilities and productivity enhancements investment. 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.
Current wording
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.
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 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.
Current wording
Of the total investment, approximately 75% 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 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.
Previous 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:
Current wording
During the three months ended September 30, 2025 and 2024, the Company incurred approximately $32 and $29, respectively, of operating expenses related to its digital capabilities and productivity enhancements investment. The expenses relate to the following:
Previous wording
(1)Comprised of third-party consulting fees incurred to assist in the project management and end-to-end systems integration 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.
Current wording
(a) Comprised of third-party consulting fees incurred to assist in the project management and end-to-end systems integration 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.
Previous wording
(2)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.
Current wording
(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.
Previous wording
(3)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.
Current wording
(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.
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 nine month year-ago periods.
Current wording
(2)The divestiture impact is calculated as net sales from the Better Health VMS business after the sale date in the three month year-ago period.
Previous wording
This Report, including the exhibits hereto and the information incorporated by reference herein, 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 the Company’s 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, 2024, and in this Report, as updated from time to time in the Company’s Securities and Exchange Commission filings. These factors include, but are not limited to:
Current wording
This Report, including the exhibits hereto and the information incorporated by reference herein, 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, 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 the Company’s 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, 2025, and in this Report, as updated from time to time in the Company’s Securities and Exchange Commission filings. These factors include, but are not limited to:
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 and tariffs between the U.S. and its trading partners, especially China;
Current wording
•unfavorable general economic and geopolitical conditions beyond the Company’s control, including inflation, supply chain disruptions, labor shortages, wage pressures, fuel and energy costs, interest rate fluctuations, foreign currency exchange rate fluctuations, weather events or natural disasters, disease outbreaks or pandemics, terrorism, and unstable geopolitical conditions, including ongoing conflicts and rising tensions in the Middle East and/or 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, particularly as a result of the imposition of U.S. and retaliatory tariffs;
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, and the timing and volume of shipment movement related to our ERP transition;
Current wording
•the ability of the Company to successfully execute or realize the anticipated benefits of its strategic or transformational initiatives, including the ERP transition and the related timing and volume of shipment movement related to the ERP transition;
Previous wording
•our recovery from the August 2023 cyberattack, and 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;
Current wording
•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;
Previous wording
•the ability of the Company to successfully manage global political, legal, tax and regulatory risks, including changes in regulatory or administrative activity;
Current wording
•the ability of the Company to successfully manage global political, legal, tax and regulatory risks, including due to regulatory uncertainty and lack of regulatory convergence among different jurisdictions;
Showing the first 40 of 44 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Adjusted earnings before interest and income taxes (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 and insurance recoveries related to the August 2023 cyberattack, asset impairments, 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). 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. See below and notes to condensed consolidated financial statements for additional information on these costs.
Current report — wording carried from elsewhere
(2)Represents incremental costs and insurance recoveries related to the cyberattack.
Current report — wording carried from elsewhere
(3)Represents expenses related to the Company's digital capabilities and productivity enhancements investment.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.