WD-40 (WDFC) Q1 2025 Earnings Call Transcript

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WD-40 (WDFC 0.89%)
Q1 2025 Earnings Call
Jan 10, 2025, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. Good day, and welcome to the WD-40 Company first quarter fiscal year 2025 earnings conference call. Today’s call is being recorded. At this time, all participants are in a listen-only mode.

At the end of the prepared remarks, we will conduct a question-and-answer session. [Operator instructions] I would now like to turn the presentation over to the host for today’s call, Wendy Kelley, vice president, stakeholder and investor engagement. Please proceed.

Wendy Kelley — Vice President, Stakeholder and Investor Engagement

Thank you. Good afternoon, and thanks to thanks to everyone for joining us today. On our call today are WD-40 Company’s president and chief executive officer, Steve Brass; and vice president and chief financial officer, Sara Hyzer. In addition to the financial information presented on today’s call, we encourage investors to review our earnings presentation, earnings press release, and Form 10-Q for the period ending November 30th, 2024.

These documents will be made available on our investor relations website at investors.wd40company.com. A replay and transcript of today’s call will also be made available shortly after this call. On today’s call, we will discuss certain non-GAAP measures. The descriptions and reconciliations of these non-GAAP measures are available in our SEC filings, as well as our earnings documents that are posted on our investor relations website.

As a reminder, today’s call includes forward-looking statements about our expectations for the company’s future performance. Actual results could differ materially. The company’s expectations, beliefs, and projections are expressed in good faith, but there can be no assurance that they will be achieved or accomplished. Please refer to the risk factors detailed in our SEC filings for further discussion.

Finally, for anyone listening to our webcast replay or reviewing a written transcript of this call, please note that all information presented is current only as of today’s date, January 10th, 2025. The company disclaims any duty or obligation to update any forward-looking information as a result of new information, future events, or otherwise. With that, I’d now like to turn the call over to Steve.

Steven A. Brass — President, Chief Executive Officer, and Director

Thanks, Wendy, and thanks to all of you for joining us this afternoon. Today, I’ll begin by discussing our sales results for the first fiscal quarter of 2025. I will also provide you with an update on our must-win battles and one of our strategic enablers. Following that, Sara will share additional details on our first quarter results, provide updates on the anticipated divestiture of our homecare and cleaning business, and our 55-30-25 business model and review our outlook for fiscal year 2025.

We will then take your questions. I’m happy to share with you that, today, we reported net sales of 153.5 million for the first quarter, which was an increase of 9% from the first quarter of last fiscal year. Furthermore, we reported net sales of maintenance products, our core strategic focus, of 145.5 million for the first quarter, which was an increase of 10% from the first quarter of last fiscal year, marking the third consecutive quarter of double-digit growth in this category. Gross margin continues to improve and is moving closer to our target of 55%.

In the first quarter, we reported gross margin of 54.8%, which is an improvement of 70 basis points sequentially from the fourth quarter and 100 basis points compared to the first quarter of last fiscal year. Gross margin, excluding the impacts of the assets we currently have held for sale, was 55.4%. This improvement of our gross margin is driving increased profitability at the bottom line. Net income for the first quarter was 18.9 million, an increase of 8% over prior year.

We are pleased with the strong volume performance the business is currently experiencing. In the first quarter, excluding the impact of currency, nearly 90% of our growth was driven by increased sales volume. Global sales volumes showed a strong progress in two of our larger trading blocks, driving 10% sales growth over prior year within the Americas and 13% within EIMEA. Asia-Pacific is lapping a strong prior-year quarter and was down 8% in the first quarter.