Lubricant maker WD-40 reports mixed third quarter, updates FY forecast
WD-40 Company's third-quarter earnings report showed mixed results, with profits exceeding forecasts despite revenue falling short, leading to a slight increase in stock prices after hours.
The company revised its 2025 sales projections, now expecting growth of 6% to 9%, with revenues anticipated between $600 million and $620 million, down from a previous forecast of 6% to 11%.
WD-40 improved its 2025 diluted earnings per share outlook to between $5.30 and $5.60, and CEO Steve Brass indicated the company expects to exceed its long-term gross margin target a year early.
The report noted a 2% growth in core maintenance products, with the Americas region performing well, while the EIMEA segment saw a 5% decline, highlighting the mixed performance in different markets.
Recommendation Rating: Mixed Performance Ahead
WD-40 Company (NASDAQ: WDFC) recently reported its third-quarter earnings, revealing a mixed financial performance. While the revenue fell short of expectations, the company's profits exceeded forecasts, prompting a modest uptick in its stock during after-hours trading on Thursday.
The renowned manufacturer of its signature lubricant and rust remover has adjusted its sales projections for 2025, now anticipating growth between 6% and 9%, equating to revenues of $600 million to $620 million, with a midpoint estimate of $610 million. This adjustment reflects a slight revision from the previous growth estimate of 6% to 11% and revenue expectations of $600 million to $630 million, accounting for currency influences.
Furthermore, WD-40 improved its outlook for 2025 diluted earnings per share, predicting figures between $5.30 and $5.60, with a midpoint of $5.45—an increase from the earlier forecast range of $5.25 to $5.55.
In a statement, CEO Steve Brass indicated positive developments, asserting, "We now expect to exceed our 55 percent long-term gross margin target for fiscal year 2025, achieving this milestone a full year ahead of schedule."
During the third quarter, the company reported a 2% growth in core maintenance products. The Americas region, which accounts for 50% of total net sales, experienced a 4% increase, bolstered by strong sales of the WD-40 Multi-Use Product. In contrast, the EIMEA (Europe, India, the Middle East, and Africa) segment, contributing 36% to net sales, faced a 5% decline during the quarter. However, the Asia-Pacific segment, representing 14% of total sales, noted a commendable 7% increase.
For the quarter, WD-40's net income rose to $21 million, surpassing last year’s $19.8 million for the same period. On a per-share basis, the San Diego, California-based company recorded earnings of $1.54, exceeding the average analyst estimate of $1.40. While revenue increased by 1% to $156.9 million, it fell short of the consensus estimate of $160.6 million.
Overall, the company's mixed earnings report highlights both potential growth in profitability and challenges in sales performance.