July 31 (Reuters) - Clorox 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 enterprise resource planning (ERP) upgrade worth up to

$580 million.

Retailers will use their inventory during Clorox's

transition period, which will result in lower shipments, the

company said. It warned of a 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.

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 ) 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.