WD-40 Q1 Earnings Call Highlights

Core Insights - WD-40 Company reported first-quarter fiscal 2026 consolidated net sales of $154.4 million, reflecting a 1% increase year-over-year, driven by growth in direct markets but offset by weaker performance in the marketing distributor network [3][5][20] Sales Performance - In the Americas, net sales reached $71.9 million, up 4% from the previous year, with maintenance product sales increasing by 5% to $68.6 million [1] - Maintenance products accounted for approximately 96% of total net sales, with net sales for these products at $148.9 million, a 2% year-over-year increase [2] - In OMEA (Europe, India, the Middle East, and Africa), net sales were $58.7 million, up 5%, driven by a 27% increase in WD-40 Specialist sales [6] - Asia Pacific net sales were $23.9 million, down 10% year-over-year, with a notable 33% decline in Asia distributor markets [7] Product Performance - WD-40 Specialist sales in the Americas rose 14%, attributed to increased online retail sales and higher demand [1] - E-commerce sales increased by 22%, primarily driven by strong Specialist sales in the United States [4][14] - Home care and cleaning product sales in the Americas declined by 18% as the company shifted focus towards higher-margin maintenance products [1] Financial Metrics - Gross margin improved to 56.2%, up 140 basis points year-over-year, although operating income decreased by 7% to $23.3 million and net income fell by 8% to $17.5 million [5][9][13] - Adjusted EBITDA margin was reported at 17%, down from 18% in the previous year [13] Strategic Initiatives - The board approved a quarterly cash dividend of $1.02 per share, representing an increase of over 8% from the prior quarter, and the company repurchased approximately $7.8 million of shares [4][18] - Management emphasized progress on strategic initiatives, including supply chain cost reductions and premiumization efforts [10][14] Guidance and Outlook - The company reaffirmed its fiscal 2026 guidance on a pro forma basis, expecting net sales between $630 million to $655 million, representing 5% to 9% growth from pro forma fiscal 2025 results [20][24] - If the planned divestiture of the Americas home care and cleaning brands is unsuccessful, it could positively impact guidance by approximately $12.5 million in net sales and $0.20 in diluted EPS [21]