WD-40 Company Reports 9% Increase in Net Sales for Q1 Fiscal 2025

WD-40 Company reported a 9% increase in net sales for the first quarter of fiscal year 2025, reaching $153.5 million compared to $140.4 million in the same period last year. The growth was driven by a $10.4 million increase in sales volume and a $1.2 million rise in average selling prices, alongside a favorable impact of $1.5 million from foreign currency exchange rates. Gross profit also improved, rising to $84.1 million, which represents a gross margin of 54.8%, up from 53.8% in the prior year. Net income for the quarter was $18.9 million, an increase of 8% from $17.5 million, resulting in diluted earnings per share of $1.39, compared to $1.28 in the previous year.

In terms of operational changes, the company reclassified its homecare and cleaning product businesses in the Americas and EIMEA segments as held for sale during the quarter. This strategic decision is not expected to significantly impact the overall operations or financial results of the company. The total assets held for sale amounted to approximately $9.9 million, which includes intangible assets, goodwill, and inventory. The company also returned approximately $15.6 million to shareholders through share repurchases and dividends during the quarter.

Geographically, the Americas segment saw an 8% increase in sales to $69.4 million, driven primarily by the WD-40 Multi-Use Product, which grew by 9%. The EIMEA segment experienced a more substantial 18% increase in sales, totaling $57.5 million, largely due to a 21% rise in sales of the WD-40 Multi-Use Product. Conversely, the Asia-Pacific segment reported a 4% decline in sales, down to $26.6 million, attributed to decreased sales in distributor markets, particularly in Indonesia and South Korea.

The company's operational expenses increased by 15% to $59.0 million, primarily due to higher employee-related costs and increased professional services fees. The increase in selling, general, and administrative expenses was partially offset by a decrease in stock-based compensation. The company’s effective tax rate decreased to 22.0% from 24.2% in the prior year, primarily due to increased excess tax benefits from stock-based equity awards.

Looking ahead, WD-40 Company remains optimistic about its financial performance, focusing on its core maintenance products while managing the divestiture of its homecare and cleaning product lines. The company anticipates that the proceeds from the divestiture will be reinvested into its higher growth and higher margin core business. The company continues to monitor market conditions and expects to leverage its strong liquidity position, with $54.9 million in cash and cash equivalents as of November 30, 2024, to support its operational and strategic initiatives.