WD-40 Company

Third-quarter consolidated net sales increased 24% year over year to $195 million. Maintenance products, 97% of total sales, rose 26% to $190 million and were up 22% constant currency, while gross margin was 56.6%, up 40 basis points. Operating income increased 47% to $40.3 million; on a non-GAAP basis, net income was $31.5 million and diluted EPS was $2.33, versus $1.54 a year ago. For FY26, the company now expects constant-currency net sales of $652 million to $667 million, reported net sales of $675 million to $690 million, gross margin of 54% to 55.5%, non-GAAP operating income of $107 million to $113 million, tax rate around 22.5%, and non-GAAP diluted EPS of $6.05 to $6.35. Guidance includes about $12 million of sales, about $2.9 million of operating income, and about $0.17 per share from the recently reclassified home care and cleaning assets.

Steven Brass framed the quarter as evidence that WD-40’s model is producing leverage, pointing to strong growth in maintenance products, premiumization, ecommerce, and Specialist. He emphasized the company’s “Must-Win Battles,” particularly geographic expansion and digital commerce, and said the new leadership structure is meant to strengthen alignment, innovation, and long-term execution. He was upbeat but cautious on margins, saying the company will “vigorously defend” gross margins and may need further action in FY2027.

Sara Hyzer highlighted the operating leverage in the business, noting that net sales grew 24% while operating income grew 47%. She broke down gross margin at 56.6%, up 40 basis points, with benefits from lower aerosol cans and fill fees and favorable mix partly offset by higher input costs; she said Q3 margin held due to inventory levels, but cost pressure should flow through in Q4. She also said advertising and promotion rose to 6.1% of sales, still expects about 6% for the full year, and reiterated the board-approved $100 million share repurchase program. On guidance, she explained the narrower FY26 range and said the held-for-use home care brands add roughly $12 million of sales and about $2.9 million of operating income into the outlook.

Analysts focused on whether gross margins above 55% are sustainable, how much pricing is needed to offset higher input costs, and whether the strong Q3 created tougher comparisons for Q4 and next year. Management said the Q3 margin held because of inventory on hand, but Q4 should feel more cost pressure before pricing benefits begin to show more fully in FY27. They also said recent price increases were mid- to high-single-digit in Europe and Asia Pacific, with roughly $3 million of global demand pulled forward, and noted that the Home Depot/Disney promotion was about 75% incremental after one month.