WD-40 Company WDFC posted its fourth-quarter fiscal 2024 results, with earnings lagging the Zacks Consensus Estimate. However, both top and bottom lines increased year over year.

WDFC has been witnessing robust growth with record sales, fueled by strong volume growth across all three trade regions. Total maintenance product sales saw remarkable growth, aligning perfectly with the company’s long-term growth targets. 

With a new mantra, 'few things, many places, bigger impact,' WD-40 aims to enhance efficiencies and returns on global investments. Looking into fiscal 2025, the company is well-positioned to continue its growth trajectory, focusing on strategy execution, expanding into high-potential markets, and driving operational efficiencies to deliver long-term value to stockholders.

WDFC’s Quarterly Performance: Key Metrics & Insights

WD-40, a global marketing organization, posted earnings of $1.23 per share, missing the Zacks Consensus Estimate of $1.31 per share. However, this performance marked an increase from the $1.21 per share posted in the year-ago quarter.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Net sales of $156 million rose 11.1% year over year due to increased sales of WD-40 Multi-Use Product in EIMEA (Europe, India, Middle East, Africa), Latin America and China. Total maintenance product sales of $147.5 million (94.6% of total sales) increased 11.9% from the year-ago period.

Gross profit of $84.3 million increased 16.9% from $72.1 million in the year-ago period. The gross margin expanded 270 basis points to 54.1%. 

SG&A expenses escalated 26.6% year over year to $49.1 million. As a percentage of net sales, SG&A expenses climbed 3.9 percentage points to 31.5%. Advertising and sales promotion expenses were $10.9 million, up 11% year over year.

WD-40’s Segmental Sales Details

Americas: Net sales for the segment came in at $79.2 million, up 6% year over year. This growth was mainly driven by a 7% increase in net sales of WD-40 Multi-Use Product, with Latin America showing the most significant rise of $5.9 million. However, this was partially offset by a $1.7-million decline in U.S. sales. Additionally, net sales of WD-40 Specialist grew 6% due to strong performances in Latin America and Canada.

EIMEA: Net sales of $58.6 million increased 15.5% in the fourth quarter from the prior-year quarter. This growth was primarily driven by a 16% increase in sales of WD-40 Multi-Use Product, with the most significant rise in the EIMEA distributor markets, which rose $4.8 million. Sales also increased in France and the DACH region, rising $1 million and $0.6 million, respectively. 

WD-40 Specialist net sales increased 13% year over year due to higher sales volumes and favorable price adjustments across the region. The translation of the company’s foreign subsidiaries' results into U.S. dollars also had a positive impact on EIMEA sales for the quarter. 

Asia-Pacific: Net sales came in at $18.2 million, up 21.4% year over year. This increase was mainly driven by a 26% increase in sales of WD-40 Multi-Use Product, with the Asia distributor markets seeing the largest gains, thanks to successful brand-building efforts and the timing of customer orders. Also, WD-40 Specialist net sales grew 24% year over year due to similar brand-building initiatives and order timing. Currency translation had no significant effect on Asia-Pacific sales for the quarter.

Net sales for this Zacks Rank #4 (Sell) company’s homecare and cleaning products fell 2% year over year, particularly in the Americas. These products, considered "harvest brands," continue to provide steady profit but are becoming a smaller part of the business as the company prioritizes expanding its maintenance product line. Aligned with its Four-by-Four Strategic Framework, the company has also expressed plans to pursue the sale of its homecare and cleaning product portfolios in the Americas and the U.K.

WDFC’s Financial Health Snapshot

WD-40 ended the fourth quarter with cash and cash equivalents of $46.7 million, long-term borrowings of $86 million, and stockholders’ equity of $230.5 million. 

On June 19, 2023, the company approved a share repurchase plan, which took effect on Sept. 1, 2023. The plan authorizes the company to repurchase up to $50 million of its outstanding shares through Aug. 31, 2025. In fiscal 2024, the company repurchased 34,250 shares for $8.1 million under this $50-million authorization.

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WD-40’s FY25 Outlook

The company has provided its fiscal 2025 guidance on a pro-forma basis, excluding the financial impacts of the expected divestiture of its homecare and cleaning product portfolios. Net sales growth is projected between 6% and 11%, with total net sales expected to range from $600 million to $630 million on a non-GAAP constant currency basis. 

The company anticipates a gross margin of 54-55% for the year. Investments in advertising and promotion are expected to be 6% of net sales. Operating income is forecast between $95 million and $100 million, suggesting growth of 6-12% from the 2024 pro-forma results.

Earnings per share are projected between $5.20 and $5.45, based on an estimated 13.5 million weighted average shares outstanding, indicating growth of 9-14% from the 2024 pro-forma results.

Shares of the company have lost 2.1% in the past month compared with the industry’s decline of 0.3%.

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