WD-40 Company Reports Q1 Earnings Miss, Shares Drop 7%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 11h ago
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Source: Fool
- Earnings Miss: WD-40 Company's Q1 sales rose only 1% while earnings per share (EPS) fell 8%, leading to a 7% drop in stock price post-report, reflecting market concerns over its high valuation.
- Management Guidance: Despite the disappointing results, management reaffirmed guidance for 2026, yet the midpoint of its EPS projections keeps the company trading at 32 times future earnings, indicating that its valuation remains elevated.
- Gross Margin Improvement: The company saw a 140 basis point increase in gross margins, with specialty product sales rising by 18%, suggesting that WD-40's strategic focus on premium offerings is beginning to yield positive results, potentially laying the groundwork for future growth.
- International Expansion Goals: WD-40 aims to quadruple sales outside the U.S. in the long term, targeting annual growth rates of 6.5% in the Americas, 9.5% in Europe, and 11.5% in Asia, which, if achieved, could help the company justify its premium valuation.
Analyst Views on WDFC
About WDFC
WD-40 Company is a global marketing company. The Company develops and sells products that solve problems in workshops, factories and homes around the world. It owns a range of brands that include maintenance products and homecare and cleaning products: WD-40 Multi-Use Product, WD-40 Specialist, 3-IN-ONE, GT85, 2000 Flushes, no vac, 1001, Spot Shot, Lava, Solvol, X-14, and Carpet Fresh. The WD-40 Multi-Use Product is a maintenance product, which acts as a lubricant, rust preventative, penetrant and moisture displacer. The Company markets and sells its products primarily through hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, farm supply, and others. Its maintenance products are sold worldwide in markets throughout North, Central and South America, Asia, Australia, Europe, India, the Middle East and Africa. Its homecare and cleaning products are sold primarily in North America, the United Kingdom and Australia.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
