WD-40 2026 Q1 Earnings Net Income Drops 7.8% Despite Revenue Growth

WD-40 (WDFC) reported mixed first-quarter 2026 results, with revenue rising 0.6% to $154.42 million but GAAP EPS declining 7.2% to $1.28. The company reaffirmed its full-year guidance, projecting revenue growth of 5-9% and EPS of $5.75-$6.15.

Revenue

Total revenue increased to $154.42 million, driven by growth in direct markets and e-commerce. Maintenance products accounted for 96% of sales, with the WD-40 Multi-Use Product contributing $117.80 million. The WD-40 Specialist segment grew 18% to $22.54 million, while e-commerce sales surged 22%. The Americas segment rose 4%, and OMEA grew 5%, though Asia-Pacific declined 10% due to distributor market timing issues.

Earnings/Net Income

Net income fell 7.8% to $17.45 million, with EPS dropping to $1.28. The decline reflects higher SG&A expenses (+10%) and softer distributor sales. Despite this, the company has maintained profitability for over 20 years, underscoring operational resilience. The EPS performance indicates a negative trend compared to the prior year.

Post-Earnings Price Action Review

The strategy of buying WDFC after revenue misses and holding for 30 days underperformed significantly, returning -17.82% versus the benchmark’s 80.61%. The -98.43% excess return highlights the strategy’s failure to generate positive outcomes and its substantial underperformance.

CEO Commentary

CEO Steve Brass emphasized confidence in a "strong rebound later this fiscal year," citing Q2 momentum and initiatives like premiumization and geographic expansion. He highlighted a 150-basis-point gross margin improvement to 56.2% and 97.6% on-time supply chain performance. Brass also noted accelerated buybacks and a 48% dividend increase to $1.02 per share, reflecting long-term fundamentals.

Guidance

WD-40 reaffirmed FY26 guidance: $630M–$655M revenue (5–9% growth), 55.5%–56.5% gross margin, and $5.75–$6.15 diluted EPS (5–12% growth). Management expressed confidence in achieving the mid-to-high end of ranges, driven by Q2 strength and Asia-Pacific recovery.

Additional News

1. Dividend and Buybacks: The board raised the quarterly dividend by 8.5% to $1.02 per share and accelerated buybacks, with $21.8 million remaining under the $22M authorization.

2. Divestiture Update: The company plans to sell its home care and cleaning business in the Americas, with active discussions ongoing.

3. Strategic Initiatives: Focus on premiumization, digital commerce, and supply chain efficiency is expected to drive margin expansion.