Why WD-40 Stock Popped Today
Key Points
The company that makes WD-40 doesn't do many flashy things.
But the products it sells work, which creates loyal, repeat customers.
Shares of WD-40 (NASDAQ: WDFC) spiked on Friday after the household and industrial products maker delivered profits that handily exceeded investors' expectations.
Image source: Getty Images.
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Strong revenue and earnings growth
WD-40's net sales jumped 24% to $195 million in its fiscal 2026 third quarter, which ended on May 31.
The gains were broad-based. Sales in the company's Americas, Asia-Pacific, and EIMEA (Europe, India, Middle East, and Africa) segments rose 29%, 24%, and 17%, respectively.
Management credited expanded distribution, e-commerce growth, and a strong customer response to its promotions as key drivers of sales.
Higher sales of premium versions of its WD-40 products also helped to boost the company's profit margins.
Gross margin improved to 56.6% from 56.2% in the year-ago quarter. That, combined with other scale benefits, contributed to a 47% surge in WD-40's operating income to $40.3 million.
All told, WD-40's adjusted net income soared 50% to $31.5 million, or $2.33 per share. That was well above Wall Street's estimates, which had called for per-share profits of $1.56.
Raised outlook
These solid results, along with the company's decision to no longer pursue a sale of its Americas home care and cleaning brands, prompted management to raise its full-year guidance.
Management now sees net sales growing by 10%-12% to between $675 million and $690 million, with adjusted earnings per share rising by 6%-11% to $6.05-$6.35.
Looking further ahead, WD-40's impressive profitability, global growth, and well-covered 1.5% dividend should all support additional long-term gains for investors.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends WD-40. The Motley Fool has a disclosure policy.