WD-40 Earnings Up


WD-40 reported net income of $14.8 million for the quarter ending Feb. 28, up 19.4 percent from the year-earlier period, with net sales up 5 percent at $101.3 million.

Earnings per diluted share reached $1.05, up from 87 cents the year before. San Diego-based WD-40s fiscal year goes from Sept. 1 to Aug. 31.

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Net sales declined 2.5 percent in the Americas to $45 million, increased 9.5 percent in Europe, Middle East and Africa to $39.6 million and climbed 9.3 percent in Asia-Pacific to $16.7 million, compared to the year-earlier quarter.

The company attributed the sales decrease in the Americas to lower sales of home care and cleaning products in the United States, which was mostly offset by a higher level of sales of maintenance products, which increased 1 percent, compared to the year-earlier period. The maintenance product sales increase was primarily driven by higher sales of WD-40 Specialist and 3-In-One in the United States and Latin America.

In Europe, Middle East and Africa, the higher net sales was mainly due to higher sales of maintenance products in that regions direct markets.

The improvement in Asia-Pacific net sales was primarily due to a 19 percent increase in sales in China and a 13 percent increase in sales in Australia.

WD-40 President and CEO Garry Ridge said that as a result of savings anticipated from the U.S. Tax Cuts and Jobs Act, the company decided to invest an additional $1 million in brand building this fiscal year. This investment will focus on two main areas around the core strategies of making our end-users aware and making our products easy to buy, Ridge said in an earnings news release. This investment will enable us to fast track our global digital presence and increase our sampling programs for WD-40 Multi Use Product to targeted end-user groups in countries identified as key growth opportunities.

Ridge said WD-40 has been seeing the impact globally of higher commodity prices, which have begun to deteriorate the companys margins. Therefore, we have decided it is time to make some necessary pricing adjustments to ensure our gross margin will remain above our target of 55 percent over the long term, he added.

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