WD-40's Mixed Bag Of Q2: Revenue Miss, Strategic Moves, Raised EPS Outlook & More

WD-40 Company WDFC reported second-quarter FY24 revenue of $139.1 million, missing the consensus of $140.5 million.

Revenue was up 7% Y/Y on growth across all trade blocs. By geographies, net sales in the Americas rose 1% Y/Y, led by growth of the WD-40 Multi-Use Product on increases in Latin America and the U.S.

Also, net sales in EIMEA rose 16% Y/Y, and Asia-Pacific grew 4% Y/Y in the quarter.

Gross margin stood at 52.4%, an improvement from 50.8% in the prior year fiscal quarter. EPS of $1.14 beat the estimate of $1.11.

Dividend: On March 19, 2024, the board of directors declared a regular quarterly dividend per share of $0.88, payable on April 30, 2024, to stockholders of record as of April 19, 2024.

Repurchase: From September 1, 2023, through the end of the second quarter, the company bought back shares worth $5.3 million under this $50.0 million plan announced earlier.

Steve Brass, president and chief executive officer, said, “We have made significant progress against our Four-by-Four strategic framework, including the recent announcement of the acquisition of our Brazilian marketing distributor.”

“Today, we are also announcing the decision to pursue a sale of our U.S. and U.K. Homecare and Cleaning Products portfolio, allowing us to focus on our core, higher-margin maintenance products while also creating headspace for future innovation.”  

FY24 Outlook: The company raised EPS guidance to $5.00-$5.30 (from $4.78-$5.15 earlier) vs. consensus of $5.12.

WD-40 reiterated its outlook for net sales at $570 million and $600 million on a non-GAAP constant currency basis (vs. street view of $577.83 million).

Investors can gain exposure to the stock via Invesco S&P SmallCap Consumer Staples ETF PSCC and Invesco Dorsey Wright Consumer Staples Momentum ETF PSL.

Price Action: WDFC shares closed lower by 1.51% at $255.11 on Tuesday.