WD-40 Company (WDFC) Q1 2025 earnings summary

Executive summary

• Q1 FY25 net sales rose 9% year-over-year to $153.5 million, with maintenance products driving growth and accounting for 95% of sales; gross margin improved to 54.8%, up 100 bps year-over-year.

• Net income increased 8% to $18.9 million, and diluted EPS rose 9% to $1.39.

• Nearly 90% of growth was volume-driven, with strong performance in the Americas and EIMEA, partially offset by a decline in Asia Pacific.

• Homecare and cleaning product businesses in the Americas and EIMEA were reclassified as held for sale, with divestiture expected in FY25.

• Strategic focus remains on expanding core brands, premiumization, digital commerce, sustainability, and operational efficiency.

Financial highlights

• Maintenance products sales up 10% year-over-year; WD-40 Multi-Use Product up 10–21% by region; Specialist up 14–17%.

• Americas sales increased 8% to $69.4 million; EIMEA up 18% to $57.5 million; Asia Pacific down 4% to $26.6 million.

• Operating income grew 4% to $25.1 million; adjusted EBITDA margin was 18% (down from 19%).

• Gross margin improved in EIMEA (57.8%, up 290 bps) and Asia Pacific (57.6%, up 130 bps); Americas gross margin slightly declined to 50.4%.

• SG&A expenses rose 14% to $50.5 million; advertising and promotion expenses increased 20% to $8.4 million.

Outlook and guidance

• FY25 guidance unchanged: net sales expected between $600M–$630M (6%–11% growth), gross margin 54%–55%, operating income $95M–$100M, EPS $5.20–$5.45 (9%–14% growth), tax rate around 24%.

• Guidance excludes home care and cleaning brands; if not divested, would add ~$23M sales, $6M operating income, $0.33 EPS.

• Board approved a 7% increase in the quarterly dividend to $0.94 per share, payable January 2025.

• Targeting 55% gross margin by end of FY26, possibly sooner if divestiture completes.

• Focus remains on growing higher-margin maintenance products and reinvesting proceeds from divestitures.