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WD-40 Company (WDFC) Q3 Earnings Top, Maintenance Sales Rise 10%
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Shares of WD-40 Company (WDFC - Free Report) rose 4% in the trading session on Jul 11, following the company’s better-than-expected third-quarter fiscal 2024 results.
WDFC has been witnessing robust growth with record sales fueled by strong volume growth across all three trade regions. Total maintenance product sales saw remarkable growth aligning perfectly with the company’s established long-term growth targets. Additionally, the company made a successful entry in the latest direct market of Brazil.
Q3 Details
WD-40, a global marketing organization, posted earnings of $1.46 per share, exceeding the Zacks Consensus Estimate of $1.27 per share. This performance also marked an increase from the $1.38 per share posted in the year-ago quarter.
Net sales of $155.1 million rose 9% year over year due to increased sales of WD-40 Multi-Use Product in EIMEA, Latin America and China. Total maintenance product sales of $147.2 million, which comprises 95% of total sales, increased 10% from the year-ago period.
Gross profit of $82.4 million increased from $71.8 million in the year-ago period. The gross margin expanded 250 basis points to 53.1%.
SG&A expenses escalated 19% year over year to $45.6 million. As a percentage of net sales, SG&A expenses climbed 2.4 percentage points to 29.4%.
Americas: Net sales came in at $75.1 million, up 6% year over year. The uptick was driven by a 7% increase in net sales of WD-40 Multi-Use Product. The product saw significant growth in Latin America, rising by $5.4 million. This increase was partially offset by lower sales in the United States and Canada, which declined by $1 million and $0.3 million, respectively.
EIMEA: Net sales of $59.4 million increased 13% in the third quarter compared to the prior-year fiscal quarter. This robust increase was attributable to 17% growth in sales of WD-40 Multi-Use Product. The most significant sales growth for this product occurred in France and Italy, up by $1.4 million and $1.2 million, respectively. Moreover, sales also rose in Benelux and Poland, each up by $1.1 million from the year-ago period. Additionally, net sales of WD-40 Specialist increased 11%, driven by higher sales volume and favorable price increases across the regions.
Asia-Pacific: Net sales came in at $20.5 million, up 14% year over year. The growth was primarily driven by an 11% increase in net sales of WD-40 Multi-Use Product. This product notably expanded in China and Asia’s distributor markets, up by $1 million and $0.4 million, respectively. Net Sales of WD-40 Specialist also soared 30%, driven by strong brand building in certain regions and the timing of customer orders.
Sales of homecare and cleaning products, a key focus area of the company, surged 28%, largely fueled by higher sales volume in Australia. This growth was bolstered by effective promotional efforts and improvements in packaging.
Other Updates
WD-40 ended the quarter with cash and cash equivalents of $45.3 million, long-term borrowings of $85.5 million and stockholders’ equity of $222.2 million.
From Sep 1, 2023, through the conclusion of the third quarter of fiscal 2024, the company bought back 34,250 shares, amounting to a total expenditure of $8.1 million as part of its $50 million repurchase program.
Outlook
For fiscal 2024, management continues to anticipate net sales growth in the range of 6-12%, with net sales between $570 million and $600 million on a non-GAAP constant currency basis. The company envisions a gross margin in the range of 51.5-53%.
Earnings per share are forecast to range between $5 and $5.30, based on an estimated 13.6 million weighted average shares outstanding.
This Zacks Rank #4 (Sell) company’s shares have lost 2.7% in the past three months against the industry’s growth 6.5%.
Image Source: Zacks Investment Research
Stocks to Consider
Here, we have highlighted three better-ranked stocks, namely, Vital Farms (VITL - Free Report) , Vita Coco Company (COCO - Free Report) and Ollie's Bargain Outlet (OLLI - Free Report) .
Vital Farms offers a range of produced pasture-raised foods. VITL has a trailing four-quarter average earnings surprise of 102.1%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 22.6% and 62.7%, respectively, from the year-ago numbers.
Vita Coco, which develops, markets and distributes coconut water products, currently flaunts a Zacks Rank #2 (Buy). COCO has a trailing four-quarter earnings surprise of 25.3%, on average.
The Zacks Consensus Estimate for Vita Coco’s current financial-year sales and earnings implies an improvement of 3.5% and 40.5%, respectively, from the prior-year actuals.
Ollie's Bargain, the extreme-value retailer of brand-name merchandise, currently carries a Zacks Rank #2. OLLI has a trailing four-quarter earnings surprise of 10.4%, on average.
The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year sales and earnings indicates a rise of 7.9% and 12%, respectively, from the year-earlier levels.
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WD-40 Company (WDFC) Q3 Earnings Top, Maintenance Sales Rise 10%
Shares of WD-40 Company (WDFC - Free Report) rose 4% in the trading session on Jul 11, following the company’s better-than-expected third-quarter fiscal 2024 results.
WDFC has been witnessing robust growth with record sales fueled by strong volume growth across all three trade regions. Total maintenance product sales saw remarkable growth aligning perfectly with the company’s established long-term growth targets. Additionally, the company made a successful entry in the latest direct market of Brazil.
Q3 Details
WD-40, a global marketing organization, posted earnings of $1.46 per share, exceeding the Zacks Consensus Estimate of $1.27 per share. This performance also marked an increase from the $1.38 per share posted in the year-ago quarter.
Net sales of $155.1 million rose 9% year over year due to increased sales of WD-40 Multi-Use Product in EIMEA, Latin America and China. Total maintenance product sales of $147.2 million, which comprises 95% of total sales, increased 10% from the year-ago period.
Gross profit of $82.4 million increased from $71.8 million in the year-ago period. The gross margin expanded 250 basis points to 53.1%.
SG&A expenses escalated 19% year over year to $45.6 million. As a percentage of net sales, SG&A expenses climbed 2.4 percentage points to 29.4%.
WD-40 Company Price, Consensus and EPS Surprise
WD-40 Company price-consensus-eps-surprise-chart | WD-40 Company Quote
Segment Details
Americas: Net sales came in at $75.1 million, up 6% year over year. The uptick was driven by a 7% increase in net sales of WD-40 Multi-Use Product. The product saw significant growth in Latin America, rising by $5.4 million. This increase was partially offset by lower sales in the United States and Canada, which declined by $1 million and $0.3 million, respectively.
EIMEA: Net sales of $59.4 million increased 13% in the third quarter compared to the prior-year fiscal quarter. This robust increase was attributable to 17% growth in sales of WD-40 Multi-Use Product. The most significant sales growth for this product occurred in France and Italy, up by $1.4 million and $1.2 million, respectively. Moreover, sales also rose in Benelux and Poland, each up by $1.1 million from the year-ago period. Additionally, net sales of WD-40 Specialist increased 11%, driven by higher sales volume and favorable price increases across the regions.
Asia-Pacific: Net sales came in at $20.5 million, up 14% year over year. The growth was primarily driven by an 11% increase in net sales of WD-40 Multi-Use Product. This product notably expanded in China and Asia’s distributor markets, up by $1 million and $0.4 million, respectively. Net Sales of WD-40 Specialist also soared 30%, driven by strong brand building in certain regions and the timing of customer orders.
Sales of homecare and cleaning products, a key focus area of the company, surged 28%, largely fueled by higher sales volume in Australia. This growth was bolstered by effective promotional efforts and improvements in packaging.
Other Updates
WD-40 ended the quarter with cash and cash equivalents of $45.3 million, long-term borrowings of $85.5 million and stockholders’ equity of $222.2 million.
From Sep 1, 2023, through the conclusion of the third quarter of fiscal 2024, the company bought back 34,250 shares, amounting to a total expenditure of $8.1 million as part of its $50 million repurchase program.
Outlook
For fiscal 2024, management continues to anticipate net sales growth in the range of 6-12%, with net sales between $570 million and $600 million on a non-GAAP constant currency basis. The company envisions a gross margin in the range of 51.5-53%.
Earnings per share are forecast to range between $5 and $5.30, based on an estimated 13.6 million weighted average shares outstanding.
This Zacks Rank #4 (Sell) company’s shares have lost 2.7% in the past three months against the industry’s growth 6.5%.
Image Source: Zacks Investment Research
Stocks to Consider
Here, we have highlighted three better-ranked stocks, namely, Vital Farms (VITL - Free Report) , Vita Coco Company (COCO - Free Report) and Ollie's Bargain Outlet (OLLI - Free Report) .
Vital Farms offers a range of produced pasture-raised foods. VITL has a trailing four-quarter average earnings surprise of 102.1%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 22.6% and 62.7%, respectively, from the year-ago numbers.
Vita Coco, which develops, markets and distributes coconut water products, currently flaunts a Zacks Rank #2 (Buy). COCO has a trailing four-quarter earnings surprise of 25.3%, on average.
The Zacks Consensus Estimate for Vita Coco’s current financial-year sales and earnings implies an improvement of 3.5% and 40.5%, respectively, from the prior-year actuals.
Ollie's Bargain, the extreme-value retailer of brand-name merchandise, currently carries a Zacks Rank #2. OLLI has a trailing four-quarter earnings surprise of 10.4%, on average.
The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year sales and earnings indicates a rise of 7.9% and 12%, respectively, from the year-earlier levels.