WD-40 Company Q1 2026 Financial Results: A Steady Performance Amid Challenges
WD-40 Company, a renowned player in the global maintenance and cleaning products market, released its financial results for the first quarter of fiscal year 2026, ending November 30, 2025. The report highlights a blend of modest growth alongside some challenges, particularly in sales volume and segment performance.
1. Overview of Financial Performance
For the quarter, WD-40 reported consolidated net sales of $154.4 million, marking a slight increase of $0.9 million or 1% compared to the same period last year. However, despite this nominal growth, the company faced headwinds from declining sales volumes, which negatively impacted net sales by approximately $4.2 million. The divestiture of its homecare and cleaning business, completed in the previous fiscal year, accounted for a $1.6 million decrease in sales.
Key Financial Metrics
- Gross Profit Margin: Improved to 56.2%, up from 54.8% in the prior year.
- Net Income: Decreased by $1.5 million (or 8%) to $17.45 million, leading to diluted earnings per share of $1.28, down from $1.39 in the previous year.
- Shareholder Returns: Approximately $20.6 million returned to shareholders through dividends and share repurchases.
| Jan 2025 | Jan 2026 | |
|---|---|---|
Net Income | 71.08M | 89.52M |
Profit | 71.08M | 89.52M |
Net Income Continuing | 71.08M | 89.52M |
Income Tax Expense | 21.60M | 10.44M |
Pretax Income | 92.69M | 99.96M |
Non-operating Income | -4.59M | -1.96M |
Operating Income | 97.28M | 101.9M |
Revenue | 603.6M | 620.9M |
Costs and Expenses | 506.3M | 518.9M |
Cost of Revenue | 279.8M | 276.8M |
Operating Expenses | 226.4M | 242.1M |
Depreciation, Depletion & Amortization | 902K | 185K |
Selling, General & Administrative | 190.2M | 204.7M |
Other Operating Expenses | 35.32M | 37.22M |
2. Segment Performance Analysis
Americas Segment
The Americas segment enjoyed a $1.7 million increase in net sales, largely attributed to the flagship WD-40 Multi-Use Product, which saw a boost primarily in the U.S. and Latin American markets. The sales of WD-40 Specialist products also increased by $1.2 million, supported by enhanced online retail penetration and new distribution channels. However, the decline in homecare and cleaning products led to an overall mixed performance in this segment.
- Sales Distribution: 72% from the U.S., 28% from Canada and Latin America.
EIMEA Segment
In the EIMEA (Europe, India, the Middle East, and Africa) segment, net sales remained stable, despite challenges in distributor markets, particularly in Saudi Arabia and the UAE. The segment benefitted from favorable foreign currency exchange rates, contributing an additional $3.4 million to consolidated net sales, thus mitigating losses from volume declines.
Asia-Pacific Segment
Conversely, the Asia-Pacific segment reported a downturn, primarily due to a $2.5 million decline in WD-40 Multi-Use Product sales. However, a notable increase in sales in China was attributed to successful promotional programs, providing a silver lining in an otherwise challenging quarter.
3. Operating Expenses and Profitability
The company's selling, general, and administrative (SG&A) expenses rose, primarily driven by increased employee-related costs, which rose by $2.8 million due to annual compensation increases and a broader workforce. Research and development expenses remained steady, focused on sustainability and product innovation.
Income from Operations
- Americas Segment: Operating income rose to $15.0 million, a 19% increase driven by higher sales and improved gross margins.
- EIMEA Segment: Operating income fell to $12.5 million due to rising operational expenses.
- Asia-Pacific Segment: Operating income decreased to $8.0 million, down 22% from the previous year.
| Jan 2025 | Jan 2026 | |
|---|---|---|
Total Assets | 447.3M | 459.6M |
Total Current Assets | 262.8M | 270.6M |
Cash and Equivalents | 54.91M | 48.58M |
Net Inventories | 74.88M | 84.00M |
Accounts Receivable | 111.4M | 112.4M |
Other Current Assets | 21.56M | 25.64M |
Total Non-current Assets | 184.5M | 188.9M |
Intangible Assets | 98.87M | 99.51M |
Non-current Deferred Tax Assets | 948K | 1.21M |
Net PP&E | 59.38M | 58.67M |
Lease Assets | 10.58M | 13.08M |
Other Non-current Assets | 14.73M | 16.49M |
Total Liabilities and Equity | 447.3M | 459.6M |
Total Liabilities | 221.0M | 195.5M |
Total Current Liabilities | 107.5M | 91.27M |
Accounts Payable and Accrued Liabilities | 84.07M | 85.93M |
Current Debt | 23.42M | 5.34M |
Total Non-current Liabilities | 113.5M | 104.3M |
Long-term Debt | 84.55M | 85.65M |
Non-current Deferred Tax Liabilities | 9.22M | 9.54M |
Other Non-current Liabilities | 19.74M | 9.11M |
Total Equity and Non-controlling Interests | 226.2M | 264.0M |
Total Equity | 226.2M | 264.0M |
4. Liquidity and Capital Resources
WD-40 Company maintains a robust financial position, with $48.6 million in cash and cash equivalents as of November 30, 2025. The company is in compliance with all material debt covenants and benefits from an unsecured revolving credit facility.
The Board of Directors has approved an extension of the share repurchase plan, allowing for the repurchase of up to $50 million of outstanding shares until August 31, 2026. Furthermore, on December 10, 2025, a cash dividend of $1.02 per share was declared, payable on January 30, 2026.
| Jan 2025 | Jan 2026 | |
|---|---|---|
Net Change in Cash | 4.59M | -6.33M |
Effect of Exchange Rate Changes | -2.28M | 1.96M |
Net Cash from Operating Activities | 80.04M | 82.98M |
Operating Profit | 71.08M | 89.52M |
Adjustment to Operating Profit | 8.96M | -6.54M |
Net Cash from Investing Activities | -9.63M | -2.56M |
Business & Interest in Affiliates | 6.20M | -1.73M |
Productive Assets | 3.43M | 4.29M |
Net Cash from Financing Activities | -63.53M | -88.71M |
Debt | -1.71M | -18.88M |
Dividends | 47.86M | 51.05M |
Equity Issuance/Repurchase | -9.3M | -16.5M |
Other Financing Activities | -4.65M | -2.26M |
5. Conclusion
In summary, while WD-40 Company experienced minor growth in net sales during Q1 2026, challenges such as declining sales volumes and increased operational expenses have tempered its financial performance. Nevertheless, the company’s strong liquidity position and commitment to returning value to shareholders through dividends and share repurchases signal a steady commitment to maintaining its market presence and supporting its long-term growth strategy. Investors will be keen to monitor how WD-40 navigates these challenges in the coming quarters.
