Is Clorox Stock Worth Buying as GOJO Growth Meets Margin Pressure?

The Clorox Company CLX enters fiscal 2027 with a larger health-and-hygiene platform after the GOJO acquisition, but investors are weighing that growth against weaker margins and muted underlying demand. Clorox expects GOJO to add about 9.5 percentage points to fiscal 2027 net sales growth and be accretive to adjusted earnings per share.

The earnings outlook offers improvement, yet much of the reported growth comes from acquisition and enterprise resource planning (ERP) comparison effects. Persistent inflation, softer categories and negative mix keep the near-term investment case balanced rather than straightforward.

GOJO Gives Clorox a New Growth Engine

Clorox's fourth-quarter fiscal 2026 net sales fell 2% to $1.95 billion but beat the Zacks Consensus Estimate of $1.91 billion by 1.8%. GOJO contributed about 10 percentage points to sales growth. Health and Wellness sales increased 16% to $860 million, with the acquisition contributing about 28 points to the segment's growth.

GOJO also changes Clorox's longer-term mix. The combined global health-and-hygiene portfolio now accounts for more than half of net sales. For fiscal 2027, management expects total net sales to increase 13-14%, including the roughly 9.5-point GOJO contribution, while adjusted earnings are projected at $5.70-$6.00 per share, up 3-8%.

Margin Pressure Limits the Upside

Profitability is the main counterweight. Fiscal 2026 gross margin declined 290 basis points to 42.3%, while fourth-quarter gross margin dropped 520 basis points to 41.3%. The quarter included about 150 basis points of pressure each from the ERP shipment comparison and GOJO inventory step-up, alongside higher commodity, manufacturing and logistics costs.

Clorox expects fiscal 2027 gross margin of about 42%, with cost savings more than offset by higher-than-normal inflation and negative mix. Inflation is expected to exceed $200 million, more than twice the company's historical $75-$100 million range. Organic sales are forecast to rise 3.5-4.5%, but more than 3.5 points reflect the ERP comparison. Excluding that benefit, organic sales are expected to be flat to up slightly.

Peer Results Show a Mixed Staples Backdrop

The Procter & Gamble Company PG reported flat organic sales in its fiscal fourth quarter and 1% organic sales growth for fiscal 2026. That performance underscores the subdued demand environment across large branded household and personal-care categories, even for companies with broad portfolios and substantial scale.

Church & Dwight Co., Inc. CHD offered a more favorable margin comparison. Its second-quarter 2026 organic sales increased 5.8%, while adjusted gross margin expanded 40 basis points to 45.4%. The contrast shows that consumer-staples companies are navigating similar inflation and value pressures with different operating outcomes.

Is CLX Stock Worth Buying Now?

The GOJO acquisition gives Clorox a credible growth driver, and completed ERP investments could support productivity later in fiscal 2027. Still, the core business must show firmer organic demand and better margin progression before the growth profile looks more durable. CLX trades at 17.9X forward 12-month earnings, modestly below its sub-industry's 18.2X multiple.

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Near-term Zacks signals remain cautious. The Zacks Consensus Estimate for fiscal 2027 earnings is $5.82 per share and has declined 3.8% in the past four weeks. CLX currently carries a Zacks Rank #4 (Sell), along with a Value Score of C, Growth Score of D, Momentum Score of F and VGM Score of D. Under the Zacks framework, the Rank points to unfavorable earnings-revision trends, while the weaker Growth, Momentum and VGM scores provide limited support for an aggressive buying case.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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