WD‑40 Company reported first‑quarter 2026 results with net sales of $154.4 million, a 1 percent year‑over‑year increase, and diluted earnings per share of $1.28. The company’s revenue fell short of the consensus estimate of $158.2 million, and EPS missed the consensus of $1.45, a shortfall of $0.17 or 11.7 percent. Despite the miss, the company reaffirmed its full‑year 2026 guidance of $630 million to $655 million in net sales and $5.75 to $6.15 in diluted EPS.
The quarter’s revenue growth was driven by an 8 percent increase in maintenance‑product sales in direct markets, offset by softness in distributor markets. Segment‑level data show that sales in the Americas and EIMEA grew modestly, while the Asia Pacific region experienced a decline in distributor‑market volume. The company’s WD‑40 Specialist line grew 18 percent, and e‑commerce sales rose 22 percent, underscoring the success of its high‑margin specialty initiatives.
Gross margin expanded to 56.2 percent, up 140 basis points from the same period last year, largely due to a shift toward premium products and lower specialty chemical costs. However, the cost of doing business rose to 40 percent of net sales from 37 percent, driven by higher employee‑related expenses and increased marketing and R&D investment. The higher operating‑cost burden offset the margin gain, leading to a decline in operating income and contributing to the EPS miss.
Management reiterated its confidence in the 2026 outlook, citing a projected rebound in Asia Pacific distributor markets and planned promotional activities. The company’s full‑year guidance remains unchanged, reflecting a belief that the mid‑single‑digit revenue growth and margin expansion can be sustained. The guidance signals that management expects the company’s strategic shift toward higher‑margin maintenance products to pay off in the second half of the year.
CEO Steve Brass emphasized the company’s growth trajectory, noting that the focus on maintenance products and the divestiture of the Home Care and Cleaning segment are positioning WD‑40 for long‑term profitability. CFO Sara Hyzer highlighted the company’s ability to meet guidance through disciplined cost management and targeted investments in marketing and R&D. The company’s strategic emphasis on a $1.4 billion opportunity in its core product line is expected to drive future revenue growth.
Investors reacted negatively to the earnings miss and the rise in operating costs, with market sentiment reflecting concerns about the company’s ability to translate margin gains into bottom‑line profitability. The guidance, while unchanged, was viewed with caution due to the weaker start of the year and the higher cost of doing business.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.