WD-40 Company (WDFC) Stock: Revenue Rises, Profits Slip as FY26 Guidance Holds Firm

TLDR

• Q1 revenue rises 1% to $154.4M, but profits decline amid higher expenses.
• EPS misses forecasts at $1.28 vs. $1.45 expected, stock dips 1%.
• Specialist and e-commerce sales surge 18% and 22%, boosting growth.
• Americas and EIMEA segments up; Asia-Pacific struggles with distributors.
• Divestitures continue as WD-40 prioritizes maintenance products & shareholder returns.

WD-40 Company reported modest revenue growth in the first quarter of fiscal 2026, despite declining profits. Net sales increased to $154.4 million, up 1% from the same quarter last year. The company reaffirmed its full-year guidance, projecting results toward the mid-to-high end of expected ranges.

Quarterly Financial Performance

WD-40’s gross margin rose to 56.2%, compared to 54.8% in the prior year quarter. Operating income declined 7% to $23.3 million, reflecting higher expenses. Net income decreased 8% to $17.5 million, resulting in diluted earnings per share of $1.28.

Selling, general, and administrative expenses increased by 10% to $55.3 million, while advertising and sales promotion spending fell 2% to $8.2 million. The company attributed revenue growth to favorable currency translation, contributing $3.4 million. On a constant currency basis, net sales would have declined by 2% to $151 million.

WD-40 missed analyst expectations, as net sales fell short of the forecasted $161.2 million. Earnings per share also came below projections of $1.45. The stock declined 1% in after-hours trading to $197 following the announcement.

Business Segments and Product Sales

Maintenance product sales, the company’s main focus, grew 2% to $148.9 million during the quarter. Direct market sales rose 8%, partly offset by weaker distributor market results. WD-40 Specialist products saw an 18% increase, while e-commerce sales expanded 22% year-over-year.

Geographically, the Americas segment achieved a 4% sales increase, driven by stronger results in the United States and Latin America. The EIMEA region posted a 2% rise, supported by higher Specialist product sales. Asia-Pacific markets declined 10%, reflecting challenges in the company’s distributor channels in the region.

Strategic divestitures continued, with the company completing the sale of its homecare and cleaning portfolio in the United Kingdom. WD-40 also plans to divest its homecare and cleaning product portfolios in the Americas. These actions align with the company’s focus on high-growth maintenance products.

Corporate Initiatives and Outlook

The company declared a quarterly cash dividend of $1.02 per share, representing an increase of over 8%.  WD-40 repurchased 39,500 shares for $7.8 million. Management emphasized a commitment to shareholder returns alongside revenue growth.

WD-40 reaffirmed fiscal 2026 guidance, expecting net sales growth between 5% and 9%. The company projects full-year net sales between $630 million and $655 million. Gross margin is expected between 55.5% and 56.5%, with operating income of $103 million to $110 million and EPS between $5.75 and $6.15.

The company’s performance reflects steady growth in key segments despite short-term profit pressures. Management remains focused on strengthening direct markets and Specialist product lines. Overall, WD-40 maintains its long-term strategy to drive growth while returning capital to shareholders.

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