WD-40 Shares Rise Over 10% After Double-Digit Sales Growth

By
Fatima Attarwala
Fatima Attarwala
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Fatima Attarwala is a business news writer and editor with a decade of experience researching, analyzing, and commenting on issues influencing the economy.
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Published July 11, 2023
A mechanic sprays a can of WD-40 into the underside of a car.

Courtesy of WD-40

WD-40 Company's (WDFC)'s shares rose more than 10% in early trading as the company reported a double-digit jump in sales in its third quarter earnings after two consecutive quarters of little or no growth.

KEY TAKEAWAYS

  • At $141.7 million, WD-40's sales increased by 15% versus the same period last year.
  • Foreign currency exchange headwinds negatively impacted results.
  • A new $50 million share repurchase plan was approved last month.
  • The share price was up over 10% in early trading.

The lubricant company reported sales of $141.7 million in the third quarter of the current fiscal year, a 15% year-over-year increase. Its year-to-date sales were $396.8 million, a 2% increase compared to the same period last year.

The growth comes after two quarters of flat-to-down sales, according to the company President and CEO, Steve Brass.

At $18.9 million, net income for the third quarter was 30% higher compared to the second quarter. However, the year-to-date net income of $49.4 million was 6% less than in the same period last year.

Given exchange rate fluctuations, the translation of the foreign subsidiaries' financial results to U.S. dollars has led to a decrease in reported sales. As a global company, WD-40 has subsidiaries in other countries that generate sales in their local currencies. When the company translates these sales into U.S. dollars, it uses the current exchange rate.

Total sales would have been $145.6 million for the third quarter and $415.7 million year-to-date without exchange rate fluctuations. By the same calculations, net income would have been $19.5 million for the third quarter and $52.2 million year to date.

The growth in sales comes partly through increased prices of maintenance products and partly because supply chain disruptions caused by the pandemic have been sorted out over the last year.

Last month, the company approved a new share repurchase plan which will become effective on September 1. Under it, the company is authorized to acquire up to $50 million of its outstanding shares through August 31, 2025.

Through dividends and regular buy-backs, the company is returning capital to its stockholders, explained its vice president and CFO Sara Hyzer.

Diluted earnings per share were $1.38 in the third quarter compared to $1.07 in the prior year fiscal quarter. Year-to-date diluted earnings per share were $3.62 compared to $3.82 for the prior year fiscal period.

WD-40 shares are up about 35% year-to-date.

WD-40 YTD price chart

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  1. WD-40 Company. "WD-40 Company Reports Third Quarter 2023 Financial Results."

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