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July 31 (Reuters) - Clorox CLX.N on Thursday forecast a steeper-than-expected drop in annual sales and profit, as the bleach maker anticipates reduced demand from its retail partners who had already placed orders before the company upgraded its systems.
Since fiscal year 2022, Clorox has been modernizing its supply chain and improving its inventory management through a five-year digital transformation plan worth up to $580 million, which includes enterprise resource planning (ERP).
Retailers will use their inventory during Clorox's transition period, which will result in lower shipments, the company said. It warned of an 85 to 95 cents reduction in annual earnings per share.
The Pine-Sol parent expects fiscal year 2026 net sales to decline in the range of 6% to 10% from prior year, below analysts' average estimates of a 2.9% drop, according to data compiled by LSEG.
It projects annual adjusted earnings per share in the range of $5.95 and $6.30.
The pull forward of retail orders, however, aided a fourth-quarter revenue and profit beat, and Clorox said the incremental ERP shipments contributed about 150 basis points to quarterly gross margin.
The company's shares rose about 2% in trading after the bell.
Clorox has witnessed muted demand over the last several quarters as price-sensitive consumers pulled back on purchases of more expensive household and personal care products.
"We continued to see rapidly shifting consumer behaviors and broader market volatility which we expect to continue," said Clorox CEO Linda Rendle.
Industry bellwether Procter & Gamble PG.N also issued a dour forecast this week and warned of price hikes to offset the impact from the tariff-induced uncertainty.
Clorox net sales jumped 4% for the quarter ended June 30 to $1.99 billion, above expectations of a 1.8% rise to $1.94 billion.
Adjusted profit rose 58% from last year to $2.87 per share, partly due to higher volume. Analysts had expected a $2.21 per share profit.
(Reporting by Savyata Mishra in Bengaluru; Editing by Leroy Leo)
((Savyata.Mishra@thomsonreuters.com;))
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