WD-40 Co. reported net income of $23.6 million for the quarter ending Nov. 30, up 94% from $12.2 million in the same period in 2019. The company cited strong demand for its maintenance products, driven by renovation trends associated with the COVID-19 pandemic.
Diluted earnings per share for the San Diego-based company increased to $1.72 per share, up 95% from 88 cents per share in the year-earlier period. WD-40’s fiscal year runs from Sept. 1 to Aug. 1.
Net sales for its maintenance products segment – which includes WD-40 lubricants – reached $114.3 million for the quarter, up 28%. The company attributed the increase primarily to sales of its WD-40 Multi-Use Product, driven by increased demand linked to renovation projects and increased sales through the e-commerce channel. “We call this phenomenon ‘isolation renovation’ and we are experiencing it in nearly all of our direct markets around the world,” Garry Ridge, WD-40 Chairman and CEO, said in the company’s earnings news release.
The company’s overall net sales, which includes homecare and cleaning products, reached $124.6 million, up 26%.
In the Americas, net sales increased 16% to $54.2 million, due primarily to higher sales of maintenance products; by 10% in the United States; by 42% in Latin America; and by 34% in Canada. The increase in Latin America was primarily due to strong sales in Mexico.
Net sales in Europe, the Middle East and Africa increased 40% in the quarter, due entirely to sales of maintenance products in both the region’s direct markets (47% increase) and distributor markets (34% increase). Higher sales of maintenance products in the distributor markets were attributed primarily to improved economic conditions as a result of reductions in pandemic-related movement restrictions. This resulted in the company’s marketing distributors adjusting to more normalized inventory levels, WD-40 noted.
Net sales rose 24% in Asia-Pacific due to higher sales of maintenance products, which increased by 53% in China, 18% in Australia and 11% in Asia-Pacific distributor markets. Sales in China were primarily due to the timing of customers’ orders and increased sales via e-commerce. In Asia-Pacific distributor markets, reduced lockdown measures helped to boost sales of maintenance products, the company reported.
Ridge noted the company is off to a very strong start for its fiscal year 2021. “However, due to the fluidity with which the pandemic continues to evolve, it is very difficult for us to estimate how the pandemic might impact our sales results for the remainder of the fiscal year,” he cautioned. “If there is a shift in spending patterns or a global economic downturn in the wake of the pandemic, it could adversely impact our financial results.”