WD-40 CEO: ‘operating environment will remain volatile’

Shares of WD-40 Co (NASDAQ: WDFC) fell more than 2.0% in extended trading after the company blamed supply chain constraints for a YoY decline in its first-quarter profit.

Q1 financial performance

WD-40 reported $18.6 million in profit for Q1 versus the year-ago figure of $23.6 million. On a per-share basis, its profit came in at $1.34. The California-based company, however, still noted an annualised increase of 8.0% in quarterly sales, thanks to strong demand for maintenance products.

The manufacturer of household and multi-use products said costs related to advertising and sales promotion were up 2.0% in the first quarter. Operating expenses stood at $44.4 million – an increase from $41.9 million in the same quarter last year.

Gross margin contracted to 50.8% from 56.4% in Q1 of fiscal 2021. In the earnings press release, CEO Garry Ridge said:

Future outlook

For the full financial year, WD-40 now forecasts up to $547 million in net sales. Its previous estimate was capped at $542 million. The U.S. firm expects gross margin to print at 52% to 54% this year.

The Nasdaq-listed company left its full-year profit forecast unchanged at $5.24 to $5.38 per share. Advertising and sales promotion expenses, it said, will print at up to 6.0% of net sales. According to CEO Ridge: