WD-40 proves old economy can win as stock jumps on Q3 earnings

WD-40 Company WDFC shares surged on Friday after the lubricant and household products maker reported stronger-than-expected fiscal third-quarter results, driven by robust global demand for its flagship WD-40 Multi-Use product.

The stock climbed more than 12% during the session and was on track for its highest level in nearly 20 months.

The rally followed quarterly revenue and earnings that topped Wall Street estimates, alongside higher full-year profit guidance and positive commentary from analysts at DA Davidson and Jefferies.

Friday's rally also saw the company outperform many AI-linked names as investors rewarded its earnings beat and improved profit outlook.

Strong global sales drive earnings beat

WD-40 reported fiscal third-quarter revenue of $195.1 million, up 24% year over year and well ahead of analysts' expectations of $172.8 million, according to FactSet data.

Adjusted earnings per share came in at $2.33, comfortably exceeding Wall Street estimates of $1.56.

Growth was broad-based across regions. Revenue increased 29% in the Americas, 24% in Asia-Pacific, and 17% across Europe, India, the Middle East and Africa (EIMEA).

The company also raised its full-year adjusted earnings guidance to a range of $6.05 to $6.35 per share, compared with its previous outlook of $5.75 to $6.15.

The revised forecast also exceeded analysts' consensus estimate of $6.01.

Chief Executive Officer Steven Brass attributed the strong performance in the Americas to expanded distribution, robust e-commerce sales and promotional campaigns, including the company's limited-edition "King of the Hill" can created in collaboration with Disney and Home Depot.

While WD-40 has adopted artificial intelligence across its supply chain and business operations, the company's latest results reflected continued strength in its core product portfolio and traditional sales execution.

Analysts raise price targets after results

DA Davidson described the quarter as a significant earnings beat.

"As a result, we do not expect the same level of top line growth in 4Q," the firm's analysts wrote, noting that part of the strong sales growth reflected customers placing orders ahead of planned price increases in Europe and Asia later this summer.

Despite expecting slower fourth-quarter revenue growth, DA Davidson maintained its Buy rating and raised its price target to $305 from $270.

The brokerage said stronger revenue growth and higher gross margins flowed through to profits while the company's cost structure remained relatively stable.

Jefferies also raised its price target to $245 from $229 while maintaining its Hold rating.

"While sales are set to move higher, higher input costs should squeeze margins through the first half of FY27 despite the recently announced price hikes," the firm said.

Outlook supported by pricing and demand

For the full fiscal year, WD-40 expects revenue between $652 million and $667 million, excluding foreign exchange fluctuations.

Analysts had been expecting approximately $668.9 million in revenue.

The company has benefited from consistent demand for its flagship products, following an 11% sales increase in the previous quarter.

Although analysts cautioned that higher input costs could pressure margins in the coming quarters, both DA Davidson and Jefferies acknowledged the strength of the third-quarter performance.

The results underscore continued consumer demand for WD-40's core products despite a market environment increasingly focused on artificial intelligence and technology-related stocks.