WD-40 Sales, Earnings Slump


WD-40 on July 8 reported $6.9 million in net income for its third quarter ending May 31, down 14.6 percent compared to the year-ago period.

Earnings per share were 41 cents in WD-40s third quarter, down from 49 cents per share in the year-earlier period. San Diego-based WD-40s fiscal year runs from Sept. 1 to Aug. 31.

WD-40s net sales for the third quarter, ending May 31, reached $68.8 million, down 16.2 percent from 2008s third quarter. Third quarter sales in the Americas declined 15.5 percent to $41.1 million, sales in Europe dropped 17.4 percent to $21.7 million, and Asia-Pacific sales fell 12.3 percent to $6.1 million.

Worldwide net sales for the WD-40 and 3-in-One lubricants segment fell 14.1 percent to $52.67 million for the third quarter ending May 31, compared to the year-earlier period.

Garry Ridge, WD-40 president and CEO, said the companys results were impacted by overall weakness in the global economy and by foreign currency exchange rates. While we have seen declines across the globe, we still have a great number of opportunities in developing markets, Ridge said.

WD-40s gross margin was 50.9 percent in the third ending May 31, compared to 46.5 percent in the year-earlier quarter. Gross margin represents net sales minus the cost of goods sold.

“Our gross margin was positively impacted by a variety of factors, including price increases we have implemented over the past year to offset rising costs of components and raw materials, and benefits from changes and investments related to our supply chain,” Ridge said. “While we also had a benefit from declining oil prices, this was offset by the higher cost of tinplate we use in our cans, which has gone up nearly 40 percent this year in the U.S. alone.”

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