WD-40’s first quarter results drew a negative market reaction, driven by a miss on revenue expectations despite year-on-year sales growth. Management attributed the performance to strong demand for core maintenance products, with double-digit volume gains in EIMEA and notable growth in Latin America following the shift to a direct distribution model in Brazil. CEO Steven Brass acknowledged that lower sales in the United States were largely a result of the timing of customer orders, stating, “Many of those customer orders have already shifted into March contributing to a strong start we’re seeing in the U.S. for our third fiscal quarter.” The company faced foreign currency headwinds, particularly in Asia Pacific distributor markets, which impacted reported results.
Is now the time to buy WDFC? Find out in our full research report (it’s free).
WD-40 (WDFC) Q1 CY2025 Highlights:
- Revenue: $146.1 million vs analyst estimates of $154.4 million (5% year-on-year growth, 5.4% miss)
- EPS (GAAP): $2.19 vs analyst estimates of $1.42 (54.2% beat)
- Adjusted EBITDA: $25.22 million vs analyst estimates of $30.1 million (17.3% margin, 16.2% miss)
- The company reconfirmed its revenue guidance for the full year of $615 million at the midpoint
- EPS (GAAP) guidance for the full year is $5.40 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 15.9%, in line with the same quarter last year
- Market Capitalization: $3.11 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions WD-40’s Q1 Earnings Call
- Daniel Rizzo (Jefferies) asked about the impact of proposed tariffs and supply chain adjustments. CEO Steven Brass explained that decentralized manufacturing and supply chain optimization would largely offset tariff risks for the current year.
- Daniel Rizzo (Jefferies) inquired about exposure to Chinese retaliatory tariffs and potential restrictions on WD-40’s operations in China. Brass responded that local manufacturing and a localized business model minimized risk in the region.
- Daniel Rizzo (Jefferies) sought clarification on supply chain optimization efforts. Brass described a mix of diversification and localization, with ongoing investments in regional supply chain leadership to reduce costs and risk.
- Daniel Rizzo (Jefferies) questioned the timeline for qualifying new suppliers. Brass stated that bringing on new aerosol suppliers can take 18 months to two years and that several diversification initiatives are already underway.
- Daniel Rizzo (Jefferies) asked why increased gross margin guidance did not translate into higher operating income guidance. CFO Sara Hyzer explained that foreign currency headwinds were masking some of the gross margin improvement at the operating income level.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will monitor (1) execution of the divestiture of home care and cleaning brands to streamline WD-40’s focus, (2) the company’s ability to sustain margin gains amid ongoing supply chain and input cost pressures, and (3) sales momentum in EIMEA and Latin America, particularly as new distribution models mature. Currency movements and tariff developments will also be closely watched as potential swing factors.
WD-40 currently trades at $234.58, down from $237.82 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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