WD-40 Posts Solid Earnings and Guidance
WD-40 Co. (NASDAQ: WDFC) reported its fiscal third-quarter financial results after the markets closed on Thursday. The company said that it had $0.88 in earnings per share (EPS) on $96.4 million in revenue. In the same period of last year, it posted EPS of $0.75 and $92.5 million in revenue.
Earlier in June the board of directors declared a quarterly dividend of $0.42 per share payable on July 29, for shareholders on record as of July 15. At the same time, the board approved a new share repurchase plan to acquire up to $75 million worth of its outstanding shares through August 2018.
Separately, the company said that its gross margin was 56.8% in the third quarter, compared to 53.3% last year. Year to date, gross margin was 55.9%, compared to 52.5% in the same period last year.
Advertising and sales promotion expenses were up 13% in the third quarter to $6.2 million, compared to prior year fiscal quarter. Year to date, advertising and sales promotion expenses remained constant at $16.9 million, compared to the prior year fiscal period.
In terms of the outlook for the year, the company expects EPS to be in the range of $3.40 to $3.47 and net sales to be in the range of $378 million to $383 million. The consensus estimates call for $3.46 in EPS on $385.9 million in revenue for the year.
Garry Ridge, president and CEO of WD-40, commented:
We had a good quarter and are pleased we have seen solid year-over-year sales growth in maintenance products throughout all three of our trading blocs during the third quarter, despite the foreign currency exchange rate fluctuations which continue to impact our reported results. Our gross margin this quarter reflects the lowest oil costs we’ve seen in well over a decade. Our long-term target for gross margin is 55 percent however, as the cost of crude oil continues to increase from the extremely low levels that flowed through our cost of goods in the third quarter, we expect to see pressure on gross margin in the coming quarters. Overall, we believe the tribe has positioned us for a strong finish to fiscal year 2016 and we are pleased that we will be able to reward them for their hard work across the globe.
Shares of WD-40 were last seen up 1.2% at $117.28, with a consensus analyst price target of $103.00 and a 52-week trading range of $80.86 to $120.50.