WD-40 annual sales rise 11%, final-quarter profit falls 32%
Key Facts
WD-40's annual sales rose 11% to $688.0 million in fiscal 2026, according to its earnings statement, which the company had scheduled for release after the market close on October 21, 2026. The annual revenue increase was accompanied by a decline in final-quarter profit and pressure on the profit margin as input costs rose. On a constant-currency basis, annual sales growth was 7%, compared with the reported growth rate, which includes the impact of exchange-rate movements. Net income for the fiscal year was $82.3 million, according to the company's statement published via Business Wire. The annual profit comparison was affected by a favorable tax settlement that benefited the previous fiscal year. That settlement amounted to $11.9 million in fiscal 2025, boosting earnings in the comparison period. The earlier tax benefit was therefore among the factors affecting the annual profit comparison, alongside the company's business performance during the fiscal year just ended.
In the final quarter of fiscal 2026, net sales rose 8% from the same period a year earlier to $176.8 million. Quarterly net income, however, fell 32% to $14.4 million, according to the earnings statement. The gross margin declined to 52.8% from 54.7% in the corresponding quarter of fiscal 2025. Management attributed the margin pressure to higher costs for "specialty chemicals" and other inputs used by the company. In its previous quarterly filing with the U.S. Securities and Exchange Commission, the company had warned that the impact of rising costs would intensify at the end of the fiscal year. In that filing, it expected the adverse impact on the cost of goods sold to be greater in the final quarter because of the timing of inventory turnover. The quarterly margin decline came during the period management had previously identified for those pressures to take effect, despite continued sales growth from a year earlier.
The company had reported fiscal third-quarter sales of $195.1 million, up 24% year on year, according to its earnings announcement for that period. Compared with that quarter, annual sales growth slowed in the final quarter, while the quarterly sales total also declined. In the Middle East, sales of the multi-use product increased by $1.2 million in the final quarter from the same period a year earlier, according to the annual earnings statement. In its Asian operations, the company had outlined a hybrid business model in markets including Indonesia, Japan and Vietnam in its previous annual report. It said in the report filed with the U.S. regulator that "hybrid business model implementations in Indonesia, Japan and Vietnam are accelerating growth." Under this model, according to the company's description, its employees work alongside its partners in distributor markets. The arrangement aims to strengthen collaboration and knowledge sharing between the company's employees and its partners in those markets.
On returning capital to shareholders, the company had announced a new program authorizing share repurchases of up to $100.0 million in its third-quarter earnings disclosure. That amount sets the authorization limit for repurchases under the announced program. For fiscal 2027, the company expects sales growth of between 4% and 7% on a constant-currency basis, according to its guidance for the coming year. That guidance uses a comparison basis that excludes the impact of exchange-rate movements when measuring sales growth. On cash dividends, the company declared a quarterly dividend of $1.02 per share for shareholders of record at the close of business on October 19, 2026. It set the payment date for October 30, 2026.