In This Article:
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Net Sales: $153.5 million for Q1, up 9% year-over-year.
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Maintenance Products Sales: $145.5 million for Q1, up 10% year-over-year.
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Gross Margin: 54.8% for Q1, an improvement of 100 basis points year-over-year.
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Net Income: $18.9 million for Q1, up 8% year-over-year.
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Americas Sales: $69.4 million for Q1, up 8% year-over-year.
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EIMEA Sales: $57.5 million for Q1, up 18% year-over-year.
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Asia Pacific Sales: $26.6 million for Q1, down 4% year-over-year.
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WD-40 Specialist Sales: $19 million for Q1, up 14% year-over-year.
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Adjusted EBITDA Margin: 18% for Q1, down from 19% year-over-year.
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Diluted EPS: $1.39 for Q1, up 9% year-over-year.
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Dividend: Increased to $0.94 per share, up 7% from the previous quarter.
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Share Repurchases: Approximately 13,750 shares repurchased at a cost of $3.6 million.
Release Date: January 10, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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WD-40 Co (NASDAQ:WDFC) reported a 9% increase in net sales for the first quarter, reaching $153.5 million.
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The company's maintenance products saw a 10% increase in sales, marking the third consecutive quarter of double-digit growth.
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Gross margin improved to 54.8%, a 100 basis point increase from the previous year, moving closer to the target of 55%.
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The company experienced strong sales growth in the Americas and EIMEA regions, with increases of 10% and 13% respectively.
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WD-40 Co (NASDAQ:WDFC) has gone public with its sustainability targets, aiming for significant reductions in carbon emissions by 2030.
Negative Points
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Sales in the Asia Pacific region decreased by 4% due to lower sales volumes and timing of customer orders.
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The Americas segment experienced an 11% decline in operating income, partly due to a customer bankruptcy impacting results by $800,000.
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Higher costs associated with warehousing, distribution, and freight negatively impacted gross margin by 100 basis points.
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The company's cost of doing business increased by 15%, driven by higher employee-related expenses and increased professional service costs.
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The homecare and cleaning product segment saw a decline, with a 19% drop in the UK, as the company shifts focus to maintenance products.
Q & A Highlights
Q: I noticed that operating income in the Americas was down 11% year over year. Can you explain the reasons behind this decline? A: Sara Hyzer, CFO, explained that the decline was due to the timing of A&P spend, a customer bankruptcy impacting the Americas by about $800,000, and a higher growth reward program accrual compared to the prior year.