The Clorox Company CLX looks well poised for growth, thanks to its robust growth strategies. CLX’s pricing and cost-saving initiatives are bolstering its gross margins for a while.

The company’s efforts to expand its international foothold also seem encouraging. Management continues to explore international opportunities.

Over the past six months, CLX shares have gained 23.1%, comfortably outperforming the broader Consumer Staples sector and the Zacks Consumer Products - Staples industry’s decline of 1.4% and 1.9%, respectively. The stock also surpassed the S&P 500 index’s appreciation of 11.8% in the same period.

CLX Price Performance

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CLX’s Strategies Aid Rally

Clorox strengthens its competitive advantage, hence accelerating profitable growth and preparing for long-term success. CLX has been on track with its streamlined operating model, which aims to improve efficiency. 

Clorox’s pricing and cost-saving initiatives have aided it to deliver the eighth consecutive quarter of gross margin expansion in first-quarter fiscal 2025. This led to a gross margin expansion of 740 basis points year over year in the reported quarter. Additionally, the company remains on track to fully restore the gross margin by fiscal 2025.

CLX is quite focused on advancing its transformation to become a strong and resilient company. Clorox divested its Better Health Vitamins, Minerals and Supplements VMS business. This highlights an important step in the evolution of its portfolio, supporting CLX’s target to lower volatility and boost profitable growth. 

Clorox is focused on value creation in the long haul. Hence, CLX concentrates on offering superior value to the company’s consumers via investing in its brands and making innovations.

Clorox Shows Higher Estimate Revisions

Analysts seem quite optimistic about the company. The Zacks Consensus Estimate for Clorox’s fiscal 2025 earnings per share (EPS) has risen 0.3% to $6.87 in the past 30 days. The consensus estimate for fiscal 2026 EPS has risen 0.3% to $7.19 in the past seven days.

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For fiscal 2025, the Zacks Consensus Estimate for CLX’s EPS implies 11.4% growth year over year. For fiscal 2026, the consensus mark for sales and EPS indicates a 2.2% and 4.7% year-over-year increase, respectively.

CLX’s Valuation

Clorox stock is trading at a premium valuation relative to the industry. Going by the price/earnings ratio, the stock currently trades at 22.69 on a forward 12-month basis, slightly higher than 21.11 for the industry.

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Bottom Line

Overall, Clorox is on track with its IGNITE strategy, which mainly focuses on the expansion of the key elements under the 2020 Strategy to pace up innovation across each area of business. CLX has been seeing a higher share across the majority of its categories and delivered results above expectations in the most recent quarter.

The upward revisions in its earnings estimates further speak of CLX’s positives. The stock’s current Zacks Rank #2 (Buy) further supports our investment thesis.

Other Stocks to Consider in Consumer Staples Space

Freshpet, Inc. FRPT, a pet food company, delivered a trailing four-quarter average earnings surprise of 132.9%. FRPT currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Freshpet’s current financial-year sales and EPS indicates growth of 27.3% and 224.3%, respectively, from the prior-year levels.

Vital Farms VITL, which provides pasture-raised products, currently sports a Zacks Rank of 1. The consensus estimate for Vital Farms’ current financial-year sales and EPS indicates growth of 27.3% and 88.1%, respectively, from the prior-year levels.

VITL delivered a trailing four-quarter average earnings surprise of 48.5%.

McCormick & Company MKC, manufacturer and distributor of spices, seasonings, specialty foods and flavors, currently carries a Zacks Rank #2. MKC delivered a trailing four-quarter average earnings surprise of 13.8%.

The Zacks Consensus Estimate for MKC’s current financial-year sales and EPS indicates growth of 0.6% and 8.2%, respectively, from the year-ago figures.

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The Clorox Company (CLX) : Free Stock Analysis Report

Freshpet, Inc. (FRPT) : Free Stock Analysis Report

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