WD-40 Company | $WDFC Stock | Shares Fall After Company Revises Its Outlook Downward

Bottle of WD-40

WD-40 Company (NASDAQ: WDFC) 


Shares of WD-40 Company lost $3 in pre-market trade on Wednesday after the eponymous spray manufacturer lowered its full-year earnings guidance.

Although the updated guidance is still in-line with Wall Street expectations, it appears to have angered some investors. However, the company’s third-quarter revenue and earnings easily exceeded analyst expectations.

The board of directors also approved a stock repurchase program of up to $75 million expected to end in August 2020.

WDFC stock has gained 30% in 2018. The shares hit $153.20 in the final minutes of trading on Tuesday, representing a rise of 39% in the last twelve months.

WDFC Earnings & Outlook

WD-40 reported earnings per share of $1.15 on revenue of $107 million for the quarter to May 31, 2018.

Analyst had projected earnings of $1.05 per share on revenue of $103.3 million. In the third quarter of last year, the California-based company had earnings of $1.02 per share on revenue of $98.18 million.

The company revised its full-year guidance lowering it slightly from the earlier projection. WD-40 now expects earnings to be between $4.05 to $4.10 per share on revenue in the range of $403 million to $411 million.

WD-40 CEO Comments

WD-40 Company president and chief executive officer, Garry Ridge, commented; “We had a solid quarter and are pleased that we achieved both sales and earnings results which reflect new record highs for the Company. Our maintenance products delivered solid sales increases in the third quarter including 10 percent growth of WD-40 Multi-Use Product and 16 percent growth of WD-40 Specialist.  Though fluctuating foreign currency exchange rates favorably impacted our sales results in the current quarter, we still saw a currency adjusted sales growth rate of 5 percent period-over-period,”  

Ridge continuedUnfortunately we are continuing to see the impact of higher commodity prices which have begun to deteriorate our gross margins in all three of our operating segments. To combat this margin pressure we have made some price increases to ensure our gross margin remains in-line with our 55/30/25 business model.

WD-40 Company Profile

WD-40 Company develops and sells maintenance products, as well as cleaning and home care products.

It provides company-branded multi-purpose maintenance products, such as in liquid-bulk form items, non-aerosol sprays, and aerosol trigger sprays.

The company also offers specialty maintenance products, including corrosion inhibitors, penetrants, lubricants, degreasers, rust removers, and greases.

In addition, it supplies bicycle maintenance products consisting of dry and wet chain lubricants, chain degreasers and cleaners, as well as foaming wash products designed for recreational and avid bike enthusiasts, mechanics, and cyclists.

Further, the company offers specialty and multi-purpose drip oils, as well as professional lubricants and spray maintenance products for the bike market.

Its products are available primarily through home centers and mass retail stores, hardware stores, warehouse club stores, sport retailers, grocery stores, automotive parts outlets, online retailers, independent bike dealers, industrial suppliers and distributors in North, South, and Central America, as well as in Europe, Africa, Asia, the Middle East, and Australia.

WD-40 Company was founded in 1953 by Norm Bernard Larsen and Sam Crivello. Its headquarters are based in San Diego, California. –Reuters