WD-40’s third quarter results were met with a positive market reaction, reflecting the company's ability to deliver growth despite operational complexities. Management highlighted that sales momentum was largely underpinned by strong performance in core maintenance products and effective execution of its premiumization strategy, particularly through product innovations like Smart Straw and Easy Reach. CEO Steven Brass pointed to the company’s ability to “seize opportunities and continue to build on the strong foundation” despite challenges such as geopolitical tensions and macroeconomic volatility. Additionally, robust sales growth in the Asia Pacific region and margin expansion contributed to the quarter’s outperformance.
Is now the time to buy WDFC? Find out in our full research report (it’s free for active Edge members).
WD-40 (WDFC) Q3 CY2025 Highlights:
- Revenue: $163.5 million vs analyst estimates of $153.9 million (4.8% year-on-year growth, 6.2% beat)
- EPS (GAAP): $1.56 vs analyst estimates of $1.26 (24.3% beat)
- Adjusted EBITDA: $30.07 million vs analyst estimates of $26.4 million (18.4% margin, 13.9% beat)
- EPS (GAAP) guidance for the upcoming financial year 2026 is $5.95 at the midpoint, in line with analyst estimates
- Operating Margin: 17.1%, up from 15.4% in the same quarter last year
- Market Capitalization: $2.74 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From WD-40’s Q3 Earnings Call
- Daniel Rizzo (Jefferies) asked for clarification on pro forma versus reported sales, to which CFO Sara Hyzer explained the pro forma adjustments and their impact on reported results and guidance.
- Daniel Rizzo (Jefferies) questioned the nature of sales mix headwinds in gross margin, and Hyzer detailed that both product and market mix—including premiumization and distribution channels—contributed to quarterly margin fluctuations.
- Daniel Rizzo (Jefferies) inquired about applying premiumization to the WD-40 Specialist line, and CEO Steven Brass confirmed that specialist products already operate at higher margins and that premium features like Easy Reach are being rolled out across product lines.
- Keegan Cox (D.A. Davidson) sought insight into gross margin headwinds and tailwinds for 2026, with Hyzer highlighting supply chain cost reductions and stable input costs, while noting ongoing uncertainties in oil pricing and tariffs.
- Keegan Cox (D.A. Davidson) asked about Asia Pacific distributor growth potential, and Brass described the region’s long growth runway, particularly in markets like Indonesia, while cautioning about short-term distributor order variability.
Catalysts in Upcoming Quarters
As we look to the next few quarters, our team will closely monitor (1) the progress of WD-40’s divestiture of its remaining home care and cleaning brands in the Americas, (2) the initial market response to the upcoming bio-based WD-40 Specialist product launch in Europe, and (3) ongoing gains in digital commerce and supply chain efficiencies that underpin management’s margin targets. Execution against these milestones will be crucial for sustaining the company’s strategic shift toward higher-margin, core maintenance categories.
WD-40 currently trades at $201.70, in line with $201.32 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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